LVMH's crucial fashion and leather goods division, which includes major brands like Louis Vuitton and Christian Dior, has returned to growth. This recovery was significantly fueled by a strong rebound in Dior's performance. The improved sales figures suggest an easing in the luxury goods slump, providing a positive outlook for the sector.
The division's revenue for the first quarter was €9.2 billion, which was down 2% organically and 9% on a reported basis after currency movements. However, it improved sequentially from the previous quarter, indicating a positive trend. This growth comes after the division experienced four quarters of decline last year.
The recovery was supported by stronger demand in key markets, particularly China and the US. Local Chinese customers returned to growth in Q1, while US consumers shifted from slightly negative demand in Q4 to low- to mid-single-digit growth. Additionally, the first products from Dior's new artistic director, Jonathan Anderson, have made a "very good start," contributing to the brand's improved performance. Other brands like Loewe, Berluti, and Rimowa also outperformed the wider division.
Analysts from HSBC anticipate Dior to achieve 10% growth in the upcoming year, partly due to a favorable comparison effect after two years of declining sales. The fashion and leather goods segment, while less than half of total sales, accounts for over 70% of the group's EBIT, with Louis Vuitton and Dior alone representing about two-thirds of the operating profit. Overall, LVMH's first-quarter revenue was €19.1 billion, up 1% organically, or 2% excluding the impact of the Middle East conflict.
