LVMH reported first-half 2026 sales of €38.6 billion, with growth accelerating to 3% in the second quarter. Inside that, the number the industry had been waiting two years for: the fashion and leather goods division posted positive growth for the first time in seven quarters, up 1% in Q2.
The same division was still down 5% at current prices across the half, to €18.146 billion.
Both figures are true and they need to be read together, because taken separately each one supports a story the other contradicts.
What grew and where
Geography did most of the work. A clear slowdown was visible in Europe, with the United States and Asia lifting group sales overall. That is close to a reversal of the pattern of the previous two years, when European demand and tourist spending held up better than the American and Chinese consumer.
LVMH attributed part of the fashion improvement to Jonathan Anderson's impact at Dior and to new Louis Vuitton boutiques. We looked at the first of those claims in detail in Anderson's first year, because it is the most consequential thing a listed group has said about a creative appointment in this cycle: it is a €18 billion division crediting one designer, in public, in a results statement.
Kering's turn
Kering posted its first positive quarter in three years, up 2%, and took a 10% gain on its share price on the Paris exchange.
Gucci, the group's engine and its problem, remained negative at -2%. That is the number to hold onto, because of what it follows: -8% in the first quarter, and -19% across 2025.
A house going from -19% to -2% is not recovering. It is stopping falling. The distinction matters for how Demna's first year gets judged, because arresting a nineteen-point decline inside a year is a substantial achievement that will nonetheless be reported as a negative number for at least another two quarters.
The forecast everyone is quoting
A BCG report released this July put expected sector growth for FY26 at 2 to 5% CAGR, moving to 4 to 7% by 2029.
Two to five percent is a modest number that the industry has received warmly, which tells you where expectations now sit. For most of the last decade luxury grew at high single or double digits and treated anything less as a crisis. A sector applauding 2 to 5% has recalibrated what normal means.
Why one percent is the honest headline
There is a temptation, in a half like this one, to lead with €38.6 billion and a 3% quarter and call it a rebound. The Business of Fashion put it more carefully, calling the rebound a story that keeps getting a reality check, and LVMH's own share price fell on the print because fashion growth missed what the market had priced in.
The sequence that matters is this. Seven quarters of decline in the division that defines the industry. Then one quarter at +1%. Against a half still down 5%.
That is a floor, found. It is not a recovery, and the difference will be settled in the September shows, where the houses that spent eighteen months changing designers have to convert statements of intent into wholesale orders. We looked at the two-speed shape of the market underneath these results in the two-tier recovery.
Figures as reported by LVMH and Kering in their first-half 2026 results, with additional reporting from Forbes, NSS Magazine and Modaes. Group-reported growth figures are at current or constant currency depending on the line; the divisional half-year figure quoted here is at current prices.
