LVMH Q2 Sales Rise on U.S. Demand and Jewelry Strength
LVMH Q2 sales rose as U.S. luxury demand and watches & jewelry gains offset weaker Europe and Gulf, leaving investors cautious about a durable recovery.
KEY TAKEAWAYS
- Q2 organic sales rose 3% to roughly $22.2 billion, showing sequential acceleration in momentum.
- Watches & Jewelry led growth with about 11% organic expansion, driven by Tiffany and Bvlgari.
- U.S. comparable sales rose about 6%, offsetting weaker Europe and Gulf that weighed on FLG.
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LVMH reported on July 27, 2026, that its Q2 sales accelerated as strength across its portfolio offset regional weakness, suggesting tentative signs of a luxury recovery while investor skepticism kept shares under pressure.
Group Results and Cash Flow
LVMH said Q2 organic sales rose 3% to about €19.5 billion, with first-half revenue totaling €38.6 billion, up 2% on an organic basis but down 3% reported. Management described the half as "solid" with "sequential acceleration," reporting an operating margin above 22% (around 22.5%) and free cash flow of €4.1 billion.
Executives noted significant currency headwinds and said that excluding perimeter effects from DFS disposals, Q2 organic growth would have been closer to 4%. The DFS asset sales subtracted one percentage point from group organic growth in the quarter. Greater China travel-retail assets were sold to China Tourism Group Duty Free in Q1 2026.
Divisions and Regional Drivers
The watches and jewelry division led with 11% organic growth in Q2, driven by mid-teens gains at Tiffany and Bvlgari on iconic and high-jewelry lines. The division reported first-half revenue of €5.2 billion, up 9% organically and 3% reported. Profit from recurring operations rose 9% to €831 million, and the operating margin improved 90 basis points to 15.9%. The company described the division’s results as showing "very strong organic revenue growth and improvement in operating margin."
Fashion & leather goods returned to modest comparable growth with about €9.0 billion in sales and 1% organic growth, its first quarterly increase in roughly two years. This performance modestly missed an analyst consensus near 1.7%. Management estimated the Iran war reduced growth by about one percentage point. Dior’s new collections under Jonathan Anderson, Louis Vuitton flagships in Beijing and Seoul, and stabilization in handbags supported the division.
Selective retailing posted 6% organic growth in Q2, following 4% in Q1. The division reported first-half revenue of €8.4 billion with 5% organic growth. Operating margin improved to 10.6% from 10.2%, driven by Sephora’s expansion—including new stores in Belgium and Croatia—and continued growth at Le Bon Marché.
Wines and spirits showed signs of recovery with 5% organic growth in Q2, supported by stronger demand for champagne and cognac, notably Hennessy in China and firmer champagne sales in Europe. Perfumes and cosmetics were broadly flat for the half but slipped 1% organically in the quarter, with strength in flagship fragrances such as Dior Sauvage and J’adore.
Regionally, U.S. luxury demand powered a 6% comparable sales rise in Q2, following 3% in Q1. Asia (excluding Japan) also posted a 6% increase. By contrast, Europe and the Gulf showed weaker spending and softer tourism, trends the company linked to the Iran war. Management framed watches and jewelry and selective retailing as growth engines supporting margin resilience. The durability of the fashion and leather goods recovery will be a key test for whether the broader luxury sector reaccelerates.
