Investors reading the tea leaves in LVMH Moët Hennessy Louis Vuitton’s fourth-quarter report took a step back from the luxury giant on Wednesday — and the world of high-end fashion in general.
Shares of LVMH fell 7.9 percent to 542.80 euros, cutting the company’s market capitalization to 269 billion euros.
Bernard Arnault, chairman and chief executive officer of LVMH, told analysts and reporters on Tuesday that, “The group delivered solid results despite a very challenging, turbulent and volatile economic and geopolitical environment.”
Net sales fell 5 percent in the fourth quarter and profits decreased 13 percent to 10.9 billion euros.
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“We made it through this period, and 2026 won’t be easy either, but [we’ll take it] one step at a time,” Arnault said.
That proved to be more bracing than encouraging.
Other prominent decliners on Wednesday included Salvatore Ferragamo, which also reported sales declines on Tuesday and on Wednesday saw its shares fall by 5.8 percent to 6.31 euros; Burberry Group, 4.6 percent to 11.17 pounds; Hermès International, 3.8 percent to 2,050 euros; Kering, 3 percent to 266.20 euros; Moncler, 3 percent to 48.18 euros; Compagnie Financiere Richemont, 2.3 percent to 149.35 Swiss francs; Brunello Cucinelli, 2.2 percent to 78.34 euros, and Prada, 2.2 percent to 40.28 Hong Kong dollars.
The fallout is all the more significant given that LVMH’s results were, according to Morningstar analyst Jelena Sokolova, “broadly in line” with expectations.
It’s the immediate future of LVMH that remains a question mark.
“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,” Sokolova said.
Luca Solca, an analyst at Bernstein, praised the company for delivering on its core.
“Louis Vuitton and Dior have upped the ante and one could hardly ask for more, in terms of creativity, retail execution, events,” he said.
But the consumer is not there.
Solca said LVMH’s results showed “that global demand was weak — especially in the aspirational cohort, and not just in cognac and spirits.”
“Contrary to last year — when Bernard Arnault provided a reassuring message on current trading — nobody dared to offer an indication this time,” Solca said. “Even if the impression was that the year has so far started on the right foot. And that despite unfavorable Lunar New Year timing and a tough year-on-year comp. LVMH remains on guard. Investors will likely be so too.”
Oliver Chen, analyst at TD Cowen, saw plenty of green shoots in LVMH’s business — from sequential improvement in the offshore spending of Chinese shoppers to more “experiential retail traffic at Louis Vuitton and Dior” — but is also staying cautious.
“We remain on the sidelines and would prefer to see durable positive trends in China and greater visibility into the timing and magnitude of fashion and leather goods newness before turning more constructive,” Chen said.
As LVMH enters into what looks to be a tough year for luxury, it will have a new pair of eyes in its boardroom to help chart a course forward.
Marie-Laure Sauty de Chalon decided to step down from the company’s board after 12 years and the directors have proposed that Expedia CEO Ariane Gorin fill the vacancy at the next annual meeting on April 23.
“I warmly thank Marie-Laure Sauty de Chalon for her valuable contributions to the group over the past 12 years,” Arnault said in a statement. “Her recognized expertise in digital and on topics of governance and sustainability, her strategic vision, and her deep knowledge of the group have been assets, enriching the discussions within the board as well as the various committees in which she participated.
“I am delighted that Ariane Gorin has agreed to join our board,” he said. “Ariane Gorin is an experienced and visionary leader, whose ability to tackle complex challenges is widely recognized. Her remarkable international career, enriched by her dual French-American nationality, as well as her sharp expertise in the technology and travel sectors, will be of undeniable value in the coming years.”
