LVMH sales miss growth forecasts as China luxury demand slows

LVMH’s sales edged higher in the third quarter, reaching €18.5 billion for the three months to the end of September. Reported revenue rose 1.2% from a year earlier. That was an improvement from the 0.1% increase recorded in the second quarter and the 5.9% fall in the first quarter.

The more revealing figure was organic sales growth. It rose only 1% in the third quarter, down from 3% in the second. Organic growth removes the effects of currency movements and changes to LVMH’s business portfolio. It therefore gives a clearer view of underlying demand across existing activities.

The slowdown mattered because organic growth missed expectations. China was the main pressure point, especially for fashion and leather goods. Other divisions performed better, including selective retailing, watches and jewellery, and wines and spirits. Across the first nine months, LVMH generated €57.1 billion in sales, with organic growth of 2%.

Organic sales growth shows how much revenue changes from the underlying business itself. LVMH calculates it without currency movements and changes to the group’s business portfolio. This helps investors judge whether customers are buying more, fewer, or similarly priced products from the activities already in place.

Total revenue growth is the headline change in reported sales. It can be influenced by exchange rates, acquisitions, disposals, or other shifts in what the group owns. For example, a currency movement could lift reported revenue when translated into euros even if customer demand had not improved.

That distinction mattered in LVMH’s third quarter. Reported revenue increased 1.2% year on year to €18.5 billion, while organic growth was only 1%. Organic growth also fell from 3% in the second quarter. It revealed weaker underlying momentum than the total figure alone suggested.

LVMH remains an enormous business, with sales of €57.1 billion in the first nine months of the year. Its brands include Louis Vuitton, Dior, Celine, and Hennessy. The group operates across fashion and leather goods, cosmetics retail, watches and jewellery, and wines and spirits.

In the third quarter, covering the three months to the end of September, LVMH reported revenue of €18.5 billion. That represented a 1.2% increase compared with the same period a year earlier. The result followed a 0.1% rise in the second quarter and a 5.9% fall in the first.

The headline increase did not mean every business was expanding. Organic sales growth was 1%, below the 3% achieved in the second quarter. Fashion and leather goods fell 5% organically, while selective retailing grew 8%. Watches and jewellery and wines and spirits each grew 6% organically.

Organic sales in LVMH’s fashion and leather goods division fell 5% because demand in China weakened. The article identifies China as a less favourable market while describing sales growth as good in the United States, Europe, and Japan. This made Chinese weakness an important drag on the division’s global performance.

The mechanism is direct. When consumers in China buy fewer luxury fashion and leather products, sales from brands such as Louis Vuitton, Dior, and Celine decline. Because the organic measure removes currency and portfolio effects, the 5% drop points to weaker underlying demand rather than an accounting change or exchange-rate movement.

The fall was sharper than analysts expected. Deutsche Bank had anticipated roughly a 2% decline. The result also reversed the division’s first organic sales gain in two years, recorded in the previous quarter. Louis Vuitton faced an additional image problem in China after its legal dispute with Molly Tea triggered boycott calls.

Slower Chinese luxury spending reduces sales in an important market, especially for LVMH’s fashion and leather goods division. If that weakness continues, the group may generate less revenue and profit than previously expected. The article does not give a specific profit decline, but analysts linked the sales result to possible cuts in earnings forecasts.

Deutsche Bank said the results could prompt further reductions to earnings forecasts for the second half of 2026 and 2027. Investors may also react negatively when growth misses expectations. LVMH’s shares were down more than 1.6% at around 10am CEST in Paris after the update.

The broader share-price damage is already substantial. LVMH’s stock has dropped nearly 40% since the start of the year, and L’Oréal overtook it as France’s most valuable listed company in September. Deutsche Bank said recovery was taking longer, though it viewed the weakness as cyclical rather than structural.

LVMH’s diverse portfolio reduces reliance on one product category or market. Its businesses include fashion and leather goods, Sephora’s cosmetics retail, watches and jewellery, and wines and spirits. When one area weakens, stronger results elsewhere can support the group’s overall sales.

The third-quarter figures show that mechanism clearly. Fashion and leather goods sales fell 5% organically as Chinese demand weakened. In contrast, selective retailing, which includes Sephora, grew 8% organically. Watches and jewellery and wines and spirits each posted 6% organic growth.

This variety provided resilience in an uncertain geopolitical and economic environment, according to LVMH. It did not eliminate the effect of China’s slowdown: overall organic growth still fell to 1% from 3%. However, gains in cosmetics, jewellery, watches, and drinks softened the impact of the fashion division’s decline and made the group less dependent on one business.

A cyclical slowdown means demand is weak for a period but may recover as economic or market conditions improve. A structural problem is deeper and longer-lasting, suggesting that customers, brands, or business models have fundamentally changed. The article reports Deutsche Bank’s view that LVMH’s weakness was cyclical rather than structural.

That assessment matters because it changes how investors interpret falling sales. If the problem is cyclical, weaker Chinese demand may eventually ease, and brand initiatives may support a gradual recovery. If it is structural, investors might expect lasting pressure and permanently lower earnings potential.

For now, the recovery is taking longer because Chinese demand is weaker. Deutsche Bank said it was hard to see what could change investor sentiment in the short term. LVMH said brand initiatives were producing results, but the analysts expected these bottom-up measures to work more gradually. The distinction therefore affects forecasts, valuation, and patience.