LVMH posts modest Q2 growth amid Iran impact

LVMH reported a 3% increase in second-quarter organic sales, reaching €19.5 billion. The group highlighted a 6% rise in sales in the United States, which helped counterbalance softer demand in other regions. This performance represents a modest recovery in a challenging environment for global luxury spending.

Weaker consumer spending and tourism in Europe and Gulf markets weighed on results. LVMH linked the pressure in those regions to the impact of the war in Iran, which affected demand patterns and travel flows. Despite these headwinds, overall group sales still advanced on an organic basis.

The Fashion and Leather Goods division, which generates a significant share of LVMH’s operating profit, posted 1% organic growth in the second quarter. This marked the unit’s first quarterly increase in two years, signaling a stabilization after a period of slower performance.

LVMH stated that the war in Iran reduced growth in Fashion and Leather Goods by one percentage point. Without this drag, the division’s growth would have been stronger, underscoring the sensitivity of high-end fashion and leather products to geopolitical and regional disruptions.

Strong demand in the United States was a key support for the group’s overall performance. LVMH indicated that U.S. strength helped offset weaker spending in Europe and Gulf markets that were more directly affected by the Iran-related conflict. This geographic mix helped sustain group-level growth despite localized softness.

The contrast between resilient U.S. demand and pressure in other regions highlights the uneven recovery in the global luxury market. While some markets continue to purchase high-end goods at a solid pace, others are adjusting to geopolitical risks and more cautious consumer sentiment.

For the first half of the year, LVMH reported organic sales growth of 2%. Reported sales declined 3% to €38.6 billion, reflecting currency and other non-organic factors. Profits from current operations fell 4% to €8.7 billion over the same period.

Despite the decline in profit, LVMH’s operating margin remained broadly stable at about 22.5%. This indicates that the group maintained a relatively steady level of profitability, even as reported sales and operating profit came under pressure. The combination of modest growth and stable margins points to cautious but resilient performance in a complex environment.