LVMH Fashion Sales Fall 5% While Sephora Still Grows

LVMH fashion and leather goods sales fell 5% to €8.245 billion in the third quarter, even as group sales still rose. Organic group revenue, which strips out currency and deal effects, increased 1% to €18.504 billion ($20.7 billion).

The miss sat almost entirely in the largest house. Sephora-led retail, jewelry, and wines grew, so the group print stayed positive while Louis Vuitton took a China hit that Q2’s small rebound had not prepared anyone for.

Fashion Was the Only Division That Fell

Among the five main business groups, fashion was the only one that went backwards. Visible Alpha had modeled a 1.8% fashion decline and 1.3% group growth. Fashion came in much weaker. The group figure was only a hair light.

Cécile Cabanis, the chief financial officer, told analysts on October 12 that Chinese demand fell by the mid-teens and that the drop was “obviously largely driven by the Chinese clientele.” A tax crackdown on wealthy individuals had already pushed desks to cut forecasts before the print. The United States, Europe, and Japan still grew.

HOW Q3 SPLIT INSIDE LVMH

The division recorded Fashion & Leather Goods sales of €8.245 billion, against €8.497 billion a year earlier. Selective retailing’s 8% organic rise was led by Sephora, which kept taking share and added stores in Belgium and Croatia, plus a Marks & Spencer tie-up in the United Kingdom. Most of DFS has been sold, so that 8% is a Sephora story more than a duty-free story.

Jewelry did the other heavy lift. Tiffany kept pushing HardWear, Knot, and Sixteen Stone, and Bvlgari’s Eclettica high-jewelry line posted what the house called record revenue. Wines and spirits rose 6% as well, with champagne firmer in Europe and Hennessy still finding buyers in Asia. The group’s revenue of €57.1 billion for nine months was up 2% organically and down 2% as reported, after a 3% currency drag and a 1% scope effect.

Handbags are where the mood shows first. Jewelry and beauty held up because they read as lasting, or private, when a logo bag does not. That is why a 1% group rise can sit next to a 5% fashion drop without the two numbers cancelling in the way a pure leather house would feel.

The €1.5 Million Win That Hit China Sales

Louis Vuitton’s quarter was a little worse than the division’s 5% decline, Cabanis said. Part of that was operational. Part of it was a flower.

In May 2025 the house sued Shenzhen Molly Tea Catering Management over a four-petal mark it said copied seven registered Louis Vuitton graphics. The tea chain, which runs more than 2,000 stores, had already had similar filings rejected by China’s trademark office. Louis Vuitton first registered the pattern in China in 1986.

THE MOLLY TEA CASE

1. May 2025: Louis Vuitton files a trademark case against Molly Tea over the four-petal emblem.
2. June 29, 2026: The Suzhou Intermediate People’s Court orders the chain to stop using the mark and to pay RMB 10.3 million in first-instance damages and costs, about $1.5 million.
3. July 2, 2026: News of the ruling spreads. Critics say the four-petal flower echoes Tang-era motifs and that a bag house should not chase a drinks chain.
4. July 7, 2026: The Weibo tag on the 10.3 million yuan claim reaches 400 million views, and boycott tags start to travel.
5. Early Q3 2026: Cabanis says the episode had a negative sales effect, at least at the start of the quarter, on top of a weaker China mood.

Molly Tea’s founder said the company would appeal and changed the color and design of its WeChat mini-program logo. The court found “significant malicious intent” because the chain kept using a pattern it had failed to register. That legal point did not travel. What traveled was the picture of a French house with bags priced in the tens of thousands of yuan taking a drinks brand that sells cups for about a dozen yuan.

Cabanis would not put a number on it. “It’s very difficult to quantify the precise impact, but, net-net, it’s probably fair to say that it had a negative impact, at least at the beginning of the quarter,” she said. The award is small beside a division that sells €8.245 billion in three months. The cost sat in sentiment, in a market that was already losing its feel-good factor, and in a brand that still needs China more than Sephora does.

Where Celine and Loro Piana Outran Vuitton

The company does not publish brand sales. Cabanis still gave a ranking that maps onto the division’s 5% decline. Louis Vuitton sat just below that line. Dior was flat. The smaller houses, and the US, did the work the flagship could not do in China.

She also pointed to a one-off logistic problem in the third quarter at Louis Vuitton, now resolved, that weighed on growth by just over one percentage point. Strip that out and the house was still negative. Nicolas Ghesquière’s ready-to-wear and Pharrell Williams’s men’s line had “good momentum,” the group said, and the house marked 130 years of the Monogram with a new Emblème jacquard. Momentum in the studio did not offset the China till.

WHAT CABANIS SAID ON THE HOUSES

• Louis Vuitton: Sales just below the division’s 5% drop, with the shipping snag and the tea-chain fight both on the year-on-year rate.
• Dior: Flat in the quarter, positive in the year to date, and up by double digits with US clients as Jonathan Anderson’s designs landed in stores.
• Loro Piana: Still in very strong growth, with a new knitwear centre in Ghemme and a Solutions collection staged in Milan.
• Rimowa: An outperformer, lifted by the Classic Titanium and Grid cases.
• Celine: US sales up by double digits, with the Soft Triomphe bag and Michael Rider’s collections named as the drivers.
• Fendi and Loewe: A softer Baguette is selling; Maria Grazia Chiuri’s first mix still needs a season. Loewe is getting traction from the Amazona 180 and the new Whisker bag.

Asked if Anderson’s Dior had disappointed, Cabanis said no. “We are seeing great traction on women’s ready-to-wear, which is the clearest read on consumer appetite for Jonathan Anderson’s designs.” Men’s ready-to-wear is “less advanced.” Bags are in a holding pattern of tweaked icons, with more new ones still to come. Celine is the house she is willing to call a future growth driver. “We are very confident that Celine is now getting the right level of traction to become a growth driver for us,” she said. Footwear across the division rose by double digits, a separate fact from Celine’s US bags.

That split is the quarter. The logo engine stalled in China. The houses that sell quieter cloth, travel cases, and a newer US customer kept going. A group that used to be read as Louis Vuitton plus extras is, for this three-month window, extras plus a damaged Louis Vuitton.

Asia Ex-Japan Gave Back Its Summer Rebound

Group sales in Asia excluding Japan fell 5% in the third quarter, after a 4% rise in the second. That is the reversal that took fashion with it. Chinese shoppers at home and abroad are the core of that line, and Cabanis put their demand down by the mid-teens.

ORGANIC SALES BY REGION

The United States stayed the floor, at 5% organic growth after 6% in the second quarter. Japan cooled from a 14% spring bounce to 6%, which is still growth. Europe improved from a flat second quarter to 4%. Over nine months Asia excluding Japan is still 27% of group sales, the largest regional slice, just ahead of the United States at 25%. A bad China quarter still moves the whole machine.

Cabanis also kept the Middle East on the caution list. “The third quarter brought a more challenging Chinese consumer backdrop with a ‘feel-good’ factor deteriorating at the very beginning of the quarter, and this added to a Middle East situation that is still a headwind,” she said. US credit-card spend on luxury tracked by Citi fell for a third month in September, a reminder that the one large market still growing is not a blank check.

Q2’s 1% Fashion Gain Did Not Hold

Fashion and leather goods had gone through seven straight quarters of organic decline before the second quarter of 2026. That quarter finally printed +1%, on sales of €8.899 billion, and it was treated as a turn. The first quarter had still been -2%. The first half as a whole was -1%.

The third quarter put the division back below zero, at 5% down, and at €8.245 billion. Nine-month fashion sales are €26.391 billion, against €27.611 billion a year earlier, down 2% organically and 4% as reported. The group’s own nine-month rate is still +2% organic only because watches and jewelry are up 8% over that stretch, selective retailing 6%, and wines 5%. Perfumes are flat for the nine months and barely positive in the quarter.

Cabanis called the China break a delay, not a structural block. “Self-help is a priority for performance to improve,” she said, pointing to brand work already in stores. The Q2 gain now reads as one three-month pause in a two-year slide, not as a base the third quarter could build on. Anyone who used that +1% as proof the cycle had turned has to throw the proof out.

Kering Faces the Same China Print on Oct. 22

Paris had closed at €384.50 before the after-hours release. US-listed shares then fell more than 3%. The stock is down 40% in 2026, a slide that has already let L’Oréal pass LVMH as France’s most valuable company, and that has pushed Bernard Arnault out of the top 10 on the Bloomberg Billionaires Index. HSBC had cut the shares to Hold from Buy last month, with a €490 target, citing the weight of fashion and a slower pickup at Dior.

We hope these situations will subside, but in the meantime, self-help is a priority for performance to improve. And on that front, we are seeing progress across our brands.

Cécile Cabanis, LVMH chief financial officer, on the Q3 2026 earnings call

Bank of America called the print a likely negative catalyst for the sector. That is the handoff. Hermès and Kering both report on October 22. HSBC models 5.3% organic growth at Hermès, down from 6.7% in the second quarter, and a 1.6% decline at Kering. Hermès still sells scarcity leather to a richer slice of the same customer. Kering’s Gucci is in the same handbag weather that just knocked Louis Vuitton, without Sephora or Tiffany sitting next door to cover the hole.

LVMH could print +1% because the rest of the house paid for fashion’s 5% drop. Kering does not have that mix. The next two weeks will show whether this was a Louis Vuitton-and-China quarter, or the quarter the whole leather trade has to own.

Disclaimer: This article is news reporting and analysis of LVMH’s third-quarter sales update and related market figures, and it is for information only. It is not investment advice, a recommendation to buy or sell LVMH, Kering, Hermès, or any other security, and it is not a forecast of future earnings or share prices. Readers should consult a qualified financial adviser or licensed broker before making any investment decision based on luxury-sector results or estimates. Sales figures, organic rates, consensus numbers, and share prices reflect the company statements, research notes, and market data cited here as of the dates given in the piece and may change as later filings and peer reports are published.