Bernard Arnault, Chairman and CEO of LVMH Moët Hennessy Louis Vuitton, speaks at a press conference to announce LVMH’s 2023 annual financial results on January 25, 2024 in Paris, France.
Benoît Tessier | Reuters
LVMH Shares plunged 7.9% on Wednesday after the French luxury conglomerate reported slightly higher fourth-quarter sales late Tuesday, but failed to impress investors who had set the bar high following strong earnings from rivals.
The move by the world’s largest luxury conglomerate and industry poster child, parent of Louis Vuitton, Moët & Chandon and Tiffany & Co., also weighed on rival stocks.
owner of gucci kering It ended Wednesday down more than 3%. moncler 2.9% decrease, hermes fell 3.8%, while Prada closed 4.7% lower.
The report was mixed overall, but investors had hoped for better numbers. “With the following friends, Richemont, burberryand cucinelli “The benchmark rose slightly as strong quarter-on-quarter improvement was reported, beating expectations,” Citi analysts said in a note.
LVMH’s organic revenue rose 1% in the fourth quarter to a total of 22.7 billion euros ($27.2 billion), similar to the previous quarter, but down 1% for the year.
The luxury goods industry is showing signs of emerging from years of stagnation, driven by weak demand from Chinese consumers, which was once one of the sector’s main growth drivers, with China’s recovery at the forefront of investors’ attention.
Luxury stocks rose in October after LVMH’s third-quarter results as the market grew hopeful that the China crisis had eased. Analysts are now warning that the recovery is likely to take time.
Morningstar analyst Elena Sokolova said: “Given the company’s cautious comments and mixed macroeconomic data, demand recovery may be delayed somewhat, but significant marketing investments and new creative direction, especially by the Dior brand, should support relative performance.”
“We continue to view the fundamental long-term drivers for LVMH and luxury goods as intact, supported by rising incomes and wealth creation in two major buying countries: China and the United States.”
geopolitical risk
“2026 is not simple,” Chief Executive Bernard Arnault told investors, warning that geopolitical factors could weigh on the luxury brand’s outlook.
“I always say that I’m optimistic about our business in the medium term, but in the short term it’s very difficult to make serious predictions,” Arnault said at a company briefing on Tuesday. “It is very difficult to control all these geo-economic influences on our company because so many events and decisions are being paced in different countries.”
LVMH shares have fallen about 15% since the start of the year, dragged down by market turmoil over President Donald Trump’s threat to impose tariffs on European countries that don’t support his efforts to take control of Greenland. President Trump has repeatedly said the United States needs Denmark’s vast, sparsely populated territory for national security reasons, but last week said he had no intention of using military force for it.
mixed bag
Barclays analyst Carol Maggio said the earnings report was “mixed across the board.” Trends in Asia excluding Japan are improving compared to the previous year, but analysts are keeping an eye on not only fluctuations in demand but also the negative impact of exchange rates.
“We think LVMH’s results may bring a little more caution to the industry, especially after the Richemont and Burberry trading updates delivered a surprise upside to Chinese consumer performance,” Maglot said.
According to Jefferies’ James Gruzinich, it was “not a great luxury moment.” “The overall uncertainty about consumer willingness to spend at higher price points in the U.S. and Europe, as well as the extent to which less affluent Chinese consumers recover, will be critical.”
Full-year profit fell 13%, with LVMH’s wine and spirits division holding back, partially offset by strong performance from its select retail businesses, including beauty brand Sephora. However, Citi analysts said profits for the second half of the year were 7% higher than expected, margins were maintained and cost discipline remained strong across the division.
LVMH’s main fashion and leather goods division, which accounts for most of the group’s profits, remained negative in 2025 after organic sales fell 3% in the fourth quarter, roughly in line with expectations.
LVMH stock lags its peers
LVMH stock has lagged its peers on concerns that LVMH’s most important brands and revenue sources are no longer generating strong growth. Tuesday’s full-year results should allay those concerns and provide a clearer path to a return to growth and higher profits in the fashion and leather goods sector, Citi said.
“The stabilization of earnings since Q3 2025 sales, together with the modest consensus hike expected today, supports our view that LVMH is at an inflection point in both sales momentum and profitability,” the analyst added.
