LVMH’s fashion and leather goods division has returned to growth for the first time in two years, boosted by improving sales at Dior.

The luxury conglomerate’s largest division, which includes Louis Vuitton, Dior, Celine and Loewe, posted organic sales growth of one per cent during its second quarter to €8.9bn.

The improvement ended seven consecutive quarters of falling sales, although growth came in slightly below analysts’ expectations.

Dior delivered an accelerating performance following the launch of Jonathan Anderson’s first collections for the fashion house.

LVMH finance chief Cécile Cabanis said Dior grew slightly faster than the wider fashion and leather goods division, with double-digit growth among American and Japanese customers during the quarter.

Leather goods and women’s ready-to-wear were among the strongest-performing categories, while LVMH said Anderson’s new Cigale handbag had been particularly well received.

Louis Vuitton’s performance was broadly in line with the division, supported by its recently opened flagship stores in Beijing and Seoul. Loro Piana and luggage brand Rimowa continued to outperform.

Group sales rose three per cent organically to €19.5bn during the second quarter, accelerating from one per cent growth in the previous three months.

The US was a key driver, with revenue rising six per cent as wealthy shoppers continued to spend on luxury goods. Sales in Japan jumped 14 per cent, while Europe was flat and Asia excluding Japan grew four per cent.

Watches and jewellery was LVMH’s fastest-growing division, with second-quarter sales up 11 per cent following strong trading at Tiffany & Co and Bvlgari.

Selective retailing, which includes Sephora, grew six per cent, while wines and spirits increased five per cent. Perfumes and cosmetics sales declined one per cent.

LVMH said disruption caused by conflict in the Middle East reduced its quarterly growth by around one percentage point, affecting tourism and luxury spending in Europe and the Gulf.

Across the first half, group revenue fell three per cent on a reported basis to €38.6bn, although it increased two per cent organically.

Recurring operating profit declined four per cent to €8.7bn as adverse currency movements weighed on earnings, while net profit remained flat at €5.7bn. Its operating margin stood at 22.5 per cent.

LVMH chairman and chief executive Bernard Arnault said the group entered the second half with “renewed confidence” as several of its brands continued their creative transformations.

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