LVMH’s Bumpy Quarter: What War Impact Signals About Luxury Travel

LVMH saw sales fall 6% to €19.1 billion in the first quarter, with the Middle East conflict alone shaving roughly 1 percentage point off its organic growth.

LVMH is overwhelmingly a retail business, but CFO Cécile Cabanis’s commentary on Monday’s earnings call offered some tea leaves on trends affecting luxury travel.

The financial impact of the Middle East was notable. The region accounts for roughly 6% of LVMH revenue. “When the conflict hit in March, demand fell 30% to 70% depending on the mall,” Cabanis said. At shopping malls heavily visited by tourists, LVMH has some brands whose stores “used to be in the top 10 or top 20” in performance but have seen a sales falloff during the war and “are still very strongly impacted.”

Tourist spending took the hit, not locals. There were shortfalls from tourists disrupted by the conflict, Cabanis said. But locals in the U.S. and China bought more year over year. European