ion: The conflict in the Middle East. LVMH said the conflict knocked approximately one percentage point off group organic growth for the quarter.  The Middle East represents around 6 per cent of group revenues, though the exposure is uneven by division: Smaller for wines and spirits, considerably larger for watches and jewellery and Sephora. When the conflict began, the deterioration in demand at key tourist malls was not incremental. CFO Cécile Cabanis disclosed during the analyst call that in March, demand shortfalls ranged from 30 per cent to 70 per cent, depending on location and category. “Overall, if you take a 50 per cent deterioration, then you can have the overall impact, which would indeed be three points in March and one point on the quarter,” she said. According to Reuters, luxury brands reported sales drops between 30 and 50 per cent at the Mall of the Emirates in March. Management offered no expectation of a rapid bounce-back at affected malls. What the company did emphasise, however, is that the underlying wealth has not disappeared. “There will be a time where we’ll see that coming, probably elsewhere,” Cabanis said, referring to potential repatriation spending in other geographies.  Asia rising, again  Stripping out the Middle East noise, LVMH has seen recovery in its key market, Asia, where sales jumped 7 per cent organically, excluding Japan, marking its strongest quarterly performance since the end of 2023. According to the company, the tourist Chinese cluster remains slightly negative, but the trajectory is improving. American clients shifted from slightly negative in Q4 2025 to low-to-mid single-digit positive in Q1 2026. Tourists in Europe remain under pressure from the strong euro.  The opening of LV The Place Seoul also delivered results beyond expectations. “In Asia, you know that we’ve opened in Seoul, the Place, which is the new flagship from Vuitton. This has reconnected the Korean and rebounded the growth for Vuitton in Korea, which is an important market,” Cabanis noted. Vuitton holds, Dior recovers Fashion and leather division’s sales were down 2 per cent to €9.2 billion in quarterly revenue. At Christian Dior, Jonathan Anderson’s first products arrived in stores during Q1, primarily as ready-to-wear and representing only an early portion of what will eventually be a full collection rollout. The reception, across regions and categories, was described as excellent. More drops are expected through Q2 and beyond, with bags and shoes to follow. Cabanis was direct when asked about Louis Vuitton’s ability to sustain growth in a softer middle-income environment. “We really need not to enter into a collective anxiety about Vuitton,” she said. “It has unparalleled competitive advantage on all matters, and it has always been able to nourish clientele.”  Louis Vuitton has consistently outperformed the divisional average. If there was a straightforward win in the quarter, it was watches and jewellery, which grew 7 per cent organically to €2.4 billion. Fine jewellery now accounts for roughly 60 per cent of the business, growing at strong double digits, anchored by the HardWear, Knot, and Sixteen Stone lines that have matured from launches into genuine franchises.  Meanwhile, the watch segment within the division remains under pressure, though TAG Heuer posted positive growth in the US, driven by its Formula 1 marketing exposure. Selective Retailing saw revenue jump 4 per cent during the quarter, with Sephora continuing to post solid sales growth in all regions. During the quarter, DFS signed an agreement with China Tourism Group Duty Free to sell businesses in Greater China and sell the Los Angeles and San Francisco airport concessions to Duty Free Americas. LVMH enters the second quarter without the clarity it would prefer. The Middle East remains unresolved, and currency headwinds show no sign of abating. While the group still has to navigate volatility, early signals of demand resilience are emerging. Chinese consumption is showing early signs of recovery, particularly across Asia, while the American customer has quietly returned to growth. At Christian Dior, the creative reset is only beginning to take shape, with further product drops expected to build momentum through the year. Further reading: How LVMH’s results expose pressure on fashion as growth slows.