Dior's 'Reboot' Could Boost LVMH's 2026 Recovery: HSBC Insights
A recent HSBC report predicts a significant turnaround for Dior, suggesting a 'V-shaped recovery' with a 10% sales growth in 2026, thanks to strategic management changes and the appointment of Jonathan Anderson as the new creative director. This 'reboot' at Dior is expected to positively impact the overall performance of LVMH Moët Hennessy Louis Vuitton's fashion and leather goods division.
The report highlights Dior as the 'key bull case' and Louis Vuitton as the 'key bear case,' with Vuitton still projected to achieve around 2.5% growth this year. Despite representing only 47% of group sales, Dior's earnings contribute a substantial 72% of the division's earnings before interest and taxes. HSBC's Erwan Rambourg emphasizes Dior's potential to accelerate growth as the year progresses, attributing its recent struggles to 'greedflation' and a lack of creativity.
HSBC's optimism is further supported by J.P. Morgan's separate report, which acknowledges Dior's efforts to enhance accessible price points. The report notes that 43% of the women's spring 2026 collection's 108 new stock-keeping units are priced below 1,000 euros, across fashion jewelry, charms, and accessories. This shift towards more affordable options is expected to attract customers.
Rambourg expresses confidence in Jonathan Anderson's leadership, anticipating increased store traffic and a positive impact on Dior's performance. The 'wave one' of Anderson-designed products is set to launch in March, following an initial product drop in January. HSBC forecasts Dior's sales to turn positive in the first quarter of 2026, after experiencing high-single-digit declines in the previous year.
In contrast, Vuitton, the group's flagship brand, is predicted to grow at a slower pace compared to the rest of the fashion and leather division. However, HSBC commends Vuitton's recent focus on travel, icons, and elevated media assets, along with successful retail initiatives and launches. The report suggests that Vuitton has the potential to reach a value of 30 billion euros, but notes challenges in expanding its physical presence and product categories.
HSBC's overall outlook for LVMH's fashion and leather goods division is positive, with optimism expressed for Rimowa, Loewe, Loro Piana, Fendi, and Celine. The analysts are less optimistic about Marc Jacobs, Givenchy, Pucci, Kenzo, and Berluti. Rambourg highlights Fendi's potential growth under the leadership of Maria Grazia Chiuri and Celine's 'more commercial approach' under Michael Rider.
For the full year 2026, HSBC forecasts a 4.6% organic growth at LVMH, maintaining a 'buy' rating on the stock.
