Editor’s Note
LVMH’s latest results show a sharper-than-expected sales decline in its core fashion division, highlighting persistent pressure from weaker consumer demand.
Sales at LVMH’s crucial fashion business declined during the holiday season, indicating that the parent company of Louis Vuitton continues to face pressure from weak demand.
LVMH stated in a release on Tuesday that organic sales in its Fashion & Leather Goods division fell by 3% in the fourth quarter. Analysts had previously expected a decline of 2.94%.
Following the announcement, LVMH’s American Depositary Receipts traded in New York fell by 1%. CEO Bernard Arnault stated that the group is facing a difficult operating environment and warned that 2026 is unlikely to be smooth sailing. He told investors that LVMH would therefore limit spending this year.
Luxury companies have been struggling to rebound from the post-pandemic boom slump as cost-of-living pressures and geopolitical uncertainty are weighing on spending. Furthermore, significant price increases have sparked strong consumer dissatisfaction.
Some companies in the industry have shown more resilience, such as Richemont, the owner of Cartier. During uncertain times, consumers perceive gold necklaces, bracelets, and similar items as better stores of value than trendy handbags.
Although LVMH has a smaller presence in the Watches & Jewelry segment, this business performed better than expected in the latest quarter, helping the company achieve a slight overall sales increase despite weakness in Fashion & Leather Goods.
In the fourth quarter, organic sales in the United States and the region including China both grew by 1%, exceeding analyst estimates. Declines in Europe (-2%) and Japan (-5%) were larger than expected.
LVMH stated that full-year recurring operating profit was €17.8 billion, a year-on-year decrease of 9.3%, but better than analyst expectations.