The Middle East war has hurt the sales of some of the world's largest luxury groups, while also denting the sales at air hubs in the region, financial data shows.

From Hermes to Gucci and duty-free stores, the impact of conflict is seen on the sheets of the sector, which has already been facing a slower demand in recent quarters.

French luxury group Hermes reported weaker-than-expected first-quarter sales on Wednesday as the Iran war hit spending in the Middle East as well ⁠as in France, with fewer ⁠tourists visiting Paris and buying designer items.

Sales of products including Birkin and Kelly bags, silk scarves and perfume rose by ​5.6% in currency-adjusted terms, but lower than a Visible Alpha ​analyst ⁠consensus of 7.1% growth.

Currency fluctuations took 290 million euros ($342 million) off Hermes' revenue, leading to a 1% drop in reported sales to 4.07 billion euros, from 4.13 billion euros a year ago.

Hermes, which caters to the ultra-wealthy with handbags starting at $13,000, said weaker tourist flows had hit sales in concession stores at airports and in the Middle East, as well as in France, Britain, Italy and Switzerland, where Gulf shoppers are a key driver.

Investors' hopes for luxury demand to recover ⁠this ⁠year have been dashed by the Iran war, which has dented Dubai mall sales and sent energy prices soaring, hitting consumer confidence.

Gucci sales also down

Similarly, sales at Kering's Italian flagship brand Gucci ⁠dropped by 8% in the first quarter from ⁠the previous year, the fashion group said on Tuesday, with the decline also tied to the curtailed shopping due to the conflict in the Middle East and disruptions in international travel.

Gucci's 1.35 billion euro sales from January to ​March were slightly below analyst forecasts, with the drop marking the 11th ​straight ⁠quarterly decline.

A Visible Alpha analyst consensus for revenues had projected around 1.37 billion euros.

The result, days before Kering CEO Luca de Meo is due to unveil his strategic plan to turn around the group's fortunes, serves as a reminder of the steep challenge ahead for the storied fashion house and its controlling shareholder, the French Pinault family. Kering called the quarterly outcome a "first step" in its recovery.

Investors are pinning hopes on de Meo's ability to find a recipe for success amid a jittery market and rapidly shifting trends, though most analysts expect Gucci to only return to growth in the second half of the year.

Still, Kering's shares are down about 8% this year.

Impact seen at duty-free stores

From DFS ​to Avolta, duty-free stores selling premium perfumes and spirits to big spenders are also feeling the pinch as conflict in the Middle East shuts airports and curbs travel to the ⁠region – a setback likely to become more acute if ⁠the war drags on.

The disruption, now in its sixth week, exposes a vulnerability for luxury and beauty groups that have relied on airport shopping and Gulf hubs – among their highest-margin channels – to offset weaker demand ​in China and Europe, making even short-term airport closure a potential drag on ​quarterly ⁠profit.

Analysts have said a prolonged slump in Middle East air traffic could compound pressure on a travel-retail industry still recovering from the COVID-19 pandemic, squeezing underperforming businesses such as LVMH's DFS and weighing on prestige beauty and luxury firms including Estee Lauder, Puig and L'Oreal.

International flights to and from the Middle East plummeted in the first half of March. While some airlines in the United Arab Emirates are slowly restarting, flights remain well below normal levels.

Flight cancellations from the Middle East, excluding Türkiye, decreased from their peak of 65% on March 3 to 13% on March 27, according to data from Cirium, but the number of flights scheduled has also fallen.

DFS "is costing two (percentage) points of growth" for its selective retailing division, which includes beauty brand Sephora, LVMH Chief Financial Officer Cecile Cabanis told analysts this week.

The conflict shaved at least 1% off ⁠group ⁠sales in the latest quarter due to lower spending in the Gulf region, LVMH said.

"What we see today is still that demand is very much down," Cabanis said.

Gulf hubs suffer

Companies that operate in the $74 billion travel-retail industry have been shifting inventories and temporarily closing airport stores in the region. Normalcy for luxury airport shops may take time, analysts said.

Dubai International Airport, whose retail outlets include L'Oreal's Aesop, Kering's Gucci and Estee's Jo Malone, is operating a reduced number of terminals after a drone attack forced the hub to temporarily close.

Kuwait International Airport has been shut due to repeated drone strikes, halting sales for airport outlets owned by Avolta and Boots.

Avolta, which earns ⁠3% of revenue from the Middle East, is moving inventory from locations with slower sales to those with more foot traffic, CFO Yves Gerster told Reuters. Still, partly shuttered airports in some instances were leading to strong sales of food and other items for stranded travelers, for instance, ​at Dubai airport, Gerster said.

Kering CFO Armelle Poulou told Reuters after the company's first-quarter earnings report that travel retail ​was slightly down compared with last year, and that "performance with local customers has been more resilient than tourism-related demand."

The conflict shaved 3% off overall Kering sales in March, or 1% for the quarter, with a similar ⁠effect at Gucci ‌in particular, Poulou ‌said.

Investors will keenly watch out for Estee's quarterly results on May 1, as the ⁠firm explores a $40 billion acquisition of Spanish competitor Puig, which derives ‌a tenth of sales from travel retail. That makes it one of the more exposed beauty companies to swings in airport shopping and international travel, analysts ​said.

L'Oreal, whose travel-retail business in Asia accounted ⁠for less than 4% of the company's $44 billion in 2025 sales, is scheduled to report ⁠quarterly results on April 22. The company does not provide total travel-retail sales, although analysts said Asia accounts for the ⁠largest share.

Estee Lauder and ​L'Oreal declined to comment to Reuters. Puig was not immediately available for comment.