At a glance
- LVMH’s fashion and leather goods division grew 1% organically in the second quarter, its first increase after seven consecutive quarters of decline.
- Group first-half revenue reached EUR 38.6 billion, up 2% organically, with second-quarter growth accelerating to 3%.
- Dior outperformed the division, with Jonathan Anderson’s first pieces landing in stores and double-digit growth among American and Japanese clients.
- The recovery is real and uneven. Watches and jewellery grew 11% in the same quarter, eleven times the rate of the group’s core business.
LVMH’s fashion and leather goods division has returned to growth. After seven consecutive quarters of decline, the division that contains Louis Vuitton and Dior posted a 1% organic increase in the second quarter of 2026. That number is small, and it is the most consequential figure the sector has produced this year, because it marks the end of the longest contraction the world’s largest luxury business has recorded. Here is what the results actually show, which house is carrying the recovery, and the gap the headline conceals.
What LVMH Actually Reported
The group posted first-half revenue of EUR 38.6 billion, up 2% on an organic basis, with second-quarter growth accelerating to 3%. Inside that, the fashion and leather goods division turned positive at 1% organic after nearly two years of falling sales.
Two details give the figure more weight than its size suggests.
- The trend is sequential. Group growth accelerated between the first and second quarter rather than holding flat, which is the pattern a genuine inflection produces.
- The comparative was not flattering. This is not a rebound against a collapsed base. It is a return to growth against a period that was already weak.
Jelena Sokolova, senior equity analyst at Morningstar, described a recovery that continued through the second quarter with some acceleration, while noting that results remain mixed from brand to brand. That caveat is the whole story, and it is examined below.
Why Is Dior Carrying the Division?
Because the creative reset is starting to reach the shop floor. Chief financial officer Cecile Cabanis said Dior outperformed the division over the first half, with every client segment up and double-digit sales growth among American and Japanese customers. The house is seeing particular traction in women’s ready-to-wear and leather goods.
The timing matters. Jonathan Anderson’s first products have only recently begun landing in stores, which means the improvement reflects the earliest commercial evidence of the appointment rather than its full effect. A creative director change takes roughly four quarters to show up properly in numbers, so the current figures are the leading edge rather than the verdict.
It also validates a decision the group made under pressure. We covered the leadership reshuffle that put Anderson at Dior in LVMH’s leadership reset at Givenchy and Dior, at a point when the commercial case was entirely theoretical.
Key figureSeven quarters. The length of the decline that just ended in LVMH’s fashion and leather goods division. Nearly two years of falling sales in the single largest profit pool in luxury.
The Recovery Is K-Shaped, Not Broad
Here is the number that reframes the headline. In the same quarter that fashion and leather goods grew 1%, LVMH’s watches and jewellery division grew 11%. The group said Tiffany’s HardWear and Knot lines delivered exceptional growth, while Bulgari recorded broad demand across jewellery, high jewellery and watches.
The same split appears across the sector. Kering’s jewellery business grew 18% while its fashion division was flat, and Richemont’s jewellery maisons have been expanding faster still. Three groups, three portfolios, one identical divergence, which is the pattern we set out in jewellery as the engine of the industry.
Bernstein analyst Luca Solca has attributed part of that gap to value perception: entry-price jewellery now offers a material advantage over handbags whose prices have risen steeply since 2019. A bracelet containing precious metal reads as rational in a way a leather bag at the same price no longer does.
Good to knowOrganic growth strips out currency movements and changes in the group’s perimeter, such as acquisitions and disposals. It is the figure that shows whether the existing business actually sold more, which is why it is the number analysts watch and the number that differs from the headline revenue line. A group can report rising revenue and falling organic growth in the same period.
What Still Has to Be Proven
Three conditions sit between this quarter and a sustained turnaround.
- China. The United States held up across the sector, and China remains the market with the most work outstanding. Nothing structural resolves for European luxury until Chinese demand stabilises, a recalibration we tracked in China’s market recalibration.
- The full product cycle. New creative directions reach stores in stages. The collections that will genuinely test the Dior appointment arrive over the coming year, not this quarter.
- Whether growth survives without price increases. A 1% rise driven by pricing is a different asset from a 1% rise driven by volume, and the sector is discovering that clients have stopped accepting the former.
Key takeawayThe end of a seven-quarter decline is worth recording, but the more useful number in these results is the eleven-point gap between jewellery and leather goods inside the same group. Luxury is not recovering as one market. It is separating into categories that hold their pricing credibility and categories that spent it.
Bottom Line
LVMH has ended its longest contraction, with fashion and leather goods up 1% organically in the second quarter and group revenue of EUR 38.6 billion over the half. Dior is doing the heavy lifting, on the earliest evidence of a creative reset rather than its full effect, and American and Japanese clients are leading. But the same quarter saw watches and jewellery grow eleven times faster, which is the finding that matters for anyone allocating capital or attention across a portfolio. Treat this as a floor rather than a recovery, and watch the next two quarters for whether Dior’s momentum survives contact with a full collection cycle. The structural question underneath sits in where luxury fashion brands stand in 2026, and the house that never had the problem is examined in Hermes and creative discipline.
FAQ
What is in LVMH’s fashion and leather goods division?
It is the group’s largest and most profitable division, containing Louis Vuitton, Dior, Fendi, Celine, Loewe, Loro Piana and Marc Jacobs among others. Because it generates the majority of group profit, its direction tends to set sentiment for the entire European luxury sector, which is why a 1% move in it carries more weight than larger percentage moves elsewhere in the portfolio.
Why did the division decline for seven quarters?
A combination of factors converged: a sharp slowdown in Chinese demand after the post-pandemic surge, aspirational customers priced out by several years of steep increases, and a normalisation of the exceptional volumes recorded in 2021 and 2022. The pricing element is the one the sector is still working through, because it affects perceived value rather than purchasing power.
Is the luxury slowdown over?
Not uniformly. Results across the sector show a recovery that continued into the second quarter with some acceleration, but performance remains mixed between brands and between categories. Jewellery is growing at double digits while leather goods has only just stabilised, so a single figure for the industry now describes an average that no individual business is experiencing.
How long does a new creative director take to affect sales?
Roughly four quarters before the effect is properly measurable, because collections are designed months ahead and reach stores in stages. Early indicators such as press response and initial sell-through appear sooner, but they measure attention rather than durable demand. Judging an appointment on its first quarter of product is premature in either direction.
