LVMH (EU:MC) reported a decline in annual revenue, highlighting how ongoing global economic headwinds and geopolitical tensions continue to weigh on the luxury sector.
The update triggered a market sell-off. LVMH’s ADRs slipped 1.6% on Tuesday, while the group’s shares in Paris fell around 8% shortly after the market opened on Wednesday.
During the analyst call, chairman and chief executive Bernard Arnault struck a cautious tone on the outlook for 2026.
“With the continuing geopolitical crises, with economic uncertainty and the policies of certain states, including ours, to tax us to the maximum and create unemployment – I think there is reason to be a little cautious,” he told analysts.
For 2025, the group reported revenue of €80.8 billion, down 5% year on year, while organic revenue declined by 1%. Trading conditions weakened notably in Europe during the second half of the year. In contrast, the United States returned to growth, supported by stronger domestic demand. Japan fell back from an exceptionally strong prior year boosted by tourism, while performance across the rest of Asia showed clear improvement.
Results in the final quarter pointed to signs of stabilisation. Fourth-quarter organic revenue increased 1% to €22.7 billion, and the second half of the year also delivered 1% organic growth, reflecting improving trends across all business divisions.
Kepler Cheuvreux analyst Charles-Louis Scotti described the figures as “a reassuring set of 2025 results, with unchanged like-for-like (LFL) sales trends in Q4 despite c.400bps tougher YOY comparisons.”
“We continue to see LVMH as a good proxy on the expected sector recovery and reiterate our Buy rating,” he added.
Profit from recurring operations declined 9% to €17.8 billion in 2025, partly due to adverse currency movements. Net profit amounted to €10.9 billion, while operating free cash flow increased 8% to €11.3 billion.
Fashion and Leather Goods, the group’s largest division, posted an 8% fall in reported revenue, although LVMH said underlying local demand remained resilient. Wines and Spirits was affected by softer cognac demand, while Selective Retailing delivered a strong performance.
Arnault said the group demonstrated “solidity” despite a disrupted environment and stressed its continued focus on investing in brand desirability and innovation. While acknowledging uncertainty heading into 2026, LVMH said it remains committed to strengthening its leadership position in global luxury.
Bernstein analyst Luca Solca noted that “the upside from cost and capital controls will be more limited” in 2026, given that “a lot of work has been done already.”
“What would push the business and the share price forward is a global demand recovery and a return to top-line growth. This started in 2H25, albeit incrementally,” he added.
“If so, and if our base case scenario is correct, LVMH can be a compelling investment,” Solca continued.
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