Shares in luxury goods giant LVMH hit a 3-month low after the group posted weak Q4 sales. The firm blamed a ‘disrupted global economic and geopolitical environment’ for its performance and issued a cautious 2026 outlook.
| Share price: €550 (-6.6%) | PE: 24.8x |
| Market cap: €272bn | Yield: 2.2% |
LOWER LIKE-FOR-LIKE SALES
For 2025, LVMH reported revenue of €80.8 billion, down 5% on a headline basis and 1% on an organic basis. Demand was mixed with European sales down in H2 and US sales up, while Japanese sales were down on yen weakness.
Sales in the rest of Asia saw a ‘noticeable’ improvement and a return to growth in H2. However, Q4 sales rose just 1% on an organic basis, in line with the previous quarter.
FY sales of fashion and leather goods, which make up around 50% of revenue, dropped 5% on an organic basis. Wines and spirits, which make up around 7% of revenue, also saw organic sales fall 9% on weak cognac demand.
Watches and jewellery, which represent around 13% of revenue, saw a 3% rise in sales, while perfume and cosmetics sales were flat. Selective retailing, which includes duty-free shops, was the best division posting 4% organic growth.
For 2026, the group reiterated its concern over the ‘uncertain’ macro and geopolitical backdrop. Finance director Cecile Cabanis added the group needed to boost sales for margins to rebound this year.
When you’re the world’s number one, there’s nowhere to hide if you disappoint. Considering how upbeat rivals like Burberry (BRBY) and Richemont have been, there was a weight of expectation on LVMH.
The fall in wine and spirit revenue is no surprise as the whole industry is suffering from changing tastes. The fall in LVMH’s core fashion and leather goods business is more concerning, however.
The firm has always been good at publicity, and The Louis together with the partnership with F1 are eye-catching. However, it takes more than gimmicks and tie-ins to keep the wheels turning at the Maison.
Read the press release here: https://www.lvmh.com/en/investors
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