LVMH shares fall after Q4, FY results fail to impress

LVMH shares plummeted 7.9% on Wednesday after the French luxury conglomerate reported a slight fourth-quarter sales beat late Tuesday, but failed to impress investors who had set the bar higher following strong earnings from competitors.

The move for the world’s biggest luxury conglomerate — the parent company of Louis Vuitton, Moët & Chandon and Tiffany — and industry bellwether also weighed on shares of rivals.

Gucci-owner Kering finished Wednesday down more than 3%, as Moncler lost 2.9%, Hermes fell 3.8% and Prada finished the session 4.7% lower.

While the report was overall a mixed bag, investors had expected stronger numbers. “With peers such as Richemont, Burberry, and Cucinelli reporting solid QoQ improvements and beating expectations, the bar had moved slightly higher,” Citi analysts said in a note.

LVMH’s organic revenue grew 1% to a total of 22.7 billion euros ($27.2 billion) in the fourth quarter, a similar rate as in the prior quarter, but declined 1% over the full year.

The recovery in China has been at the forefront of investors’ minds as the luxury industry is showing signs of coming out of a years-long slump prompted by soft demand from Chinese consumers, formerly one of the sector’s main growth drivers.

In October, luxury shares rallied on the back of LVMH’s third-quarter results as the market grew hopeful that China woes had eased. Now, analysts are cautioning that recovery is likely to take time.

“Given the cautious commentary from the company and mixed macroeconomic data, the recovery in the demand may be somewhat delayed, although significant marketing investments and new creative direction, notably with the Dior brand, should support relative performance,” noted Morningstar analyst Jelena Sokolova.

“We continue viewing underlying long-term drivers for LVMH and luxury as intact, supported by growing incomes and wealth creation in the two main purchasing nations – China and the US.”

Geopolitical risks

Talking to investors, CEO Bernard Arnault warned that “2026 won’t be simple,” and that geopolitical factors may weigh on luxury players’ outlook.

“I always say that in our businesses, I am optimistic in the medium-term but short term it is very difficult to provide a serious forecast,” Arnault said during a company presentation on Tuesday. “So many events and the pace of decisions taken left and right in the various countries, it is extremely difficult to control all these geo-economic impacts on our companies.”

LVMH shares are down about 15% year-to-date, dragged lower by market jitters around U.S. President Donald Trump’s threats of imposing tariffs on European countries not supporting his quest to take control over Greenland. Trump has repeatedly said the U.S. needs the vast and sparsely populated self-governing Danish territory for national security reasons, but he said last week that he would not use military force to do so.

A mixed bag

The earnings report was “overall a mixed bag,” said Barclays analyst Carole Madjo. While Asia trends, excluding Japan, saw improving trends compared to the previous year, analysts note the negative impact of currency exchange rates as well as demand volatility.

“After the trading updates from Richemont and Burberry that surprised to the upside, notably on the performance of the Chinese consumer, we think that LVMH’s results could bring a bit more prudence to the sector,” Madjo said.

It was “no eureka moment for luxury,” according to Jefferies’ James Grzinic. “The overall uncertainty about consumers’ willingness to spend at the higher price points in the US and Europe and the extent to which the less affluent Chinese consumer will rebound, will be critical.”

Full-year profits declined by 13%, dragged down by LVMH’s wine and spirits division and partially offset by strong performance in its selective retailing business which includes beauty brand Sephora. Yet, in the second half of the year, profits beat expectations by 7%, with margins holding up and cost discipline remaining strong across divisions, Citi analysts noted.

LVMH’s key fashion and leather goods division, accounting for the bulk of the group’s profits, stayed negative in 2025 as organic sales declined 3% in the fourth quarter, largely in line with expectations.

LVMH shares have lagged those of peers amid concerns that its most important brands and profit makers were no longer delivering strong growth. Tuesday’s full-year results should help alleviate those fears and provide a clearer path toward a return to growth and margin expansion in the fashion and leather goods division, Citi said.

“The stabilisation in earnings since the 3Q25 sales print, together with today’s expected modest consensus upgrades, supports our view that LVMH is at an inflection point in both sales momentum and profitability,” the analysts added.