LVMH Sees Tough Year Ahead as Fashion Sales Struggle

PARIS — LVMH’s fourth-quarter sales rose 1 percent, slightly ahead of analyst estimates.

Fashion and leather goods sales fell 3 percent on an organic basis. UBS analysts had predicted a 2 percent drop for the key division, whose brands include Louis Vuitton and Dior.

Investors had been expecting the relatively muted performance as the sector struggles to reignite demand, in addition to facing a high comparison basis due to last year’s post-election bump.

Chairman Bernard Arnault presented the group’s annual results after markets closed on Tuesday.

LVMH finished the year with revenues of €80.8 billion ($96.7 billion), down 1 percent on an organic basis. Group operating profits fell 9 percent to €17.8 billion.

Arnault called the performance “solid” in light of “a fast-changing, agitated and at times unpredictable economic context.”

“2026 will not be easy either,” Arnault said. “We continue to look ahead calmly. I am optimistic mid-term, but short-term it’s very hard to make a serious forecast. Change is accelerating across several countries, and it’s very hard to measure how all of these geopolitical changes will impact our companies.”

Fashion Reboot

Arnault nonetheless voiced cautious optimism for LVMH’s second-biggest brand, Dior, which has been hard hit by a global slowdown in luxury demand since 2024. Last year, the brand onboarded new creative director Jonathan Anderson, overseeing women’s, men’s and couture.

“Dior is benefitting from its creative renewal,” Arnault said. “[Anderson’s] products are in high demand since the start of the year. We should never be too optimistic but it’s off to a good start.”

Guests were “deeply moved by the creativity and craftsmanship” on display at Anderson’s debut couture show Monday, he added.

Arnault also flagged his satisfaction with forthcoming designs by Pharrell Williams — menswear creative director at Louis Vuitton — who staged his latest show in Paris last week. “It’s particularly wearable, and desirable,” he said of the brand’s new aesthetic direction.

Vuitton, the group’s largest and most profitable brand, has been relatively resilient in the face of luxury’s slowdown, but has hardly been spared: Its customers have been slow to grow into higher prices, while many shoppers are also turning away from logo-heavy styles. The brand has brought in a new deputy CEO, Damien Bertrand (formerly Loro Piana’s chief), who is increasingly taking the lead as CEO Pietro Beccari shifts to a new role overseeing LVMH’s Fashion Group — the division that houses the company’s smaller fashion brands including Celine, Loewe and Givenchy — in addition to Vuitton.

Ambitions for a Louis Vuitton hotel, which was reportedly planned to be included in its new mega-store on the Champs-Elysées, seem to have been scrapped. “There won’t be a Vuitton hotel. Vuitton is focusing, not diversifying,” Arnault said.

Fashion and leather goods sales fell 5 percent for the full year.

From Dom Perignon to Tiffany

Sales also dropped in LVMH’s wine and spirits division, down 9 percent during the holiday quarter (-5 percent for the full year). Longtime chief financial officer Jean-Jacques Guiony stepped in alongside Arnault’s son Alexandre as co-CEOs last February, with a mandate to overhaul the ailing unit whose brands include Hennessy cognac, Moët Chandon and Dom Pérignon champagne.

Perfume and beauty sales slid 1 percent in the fourth quarter, and were flat for the full year.

Watch and jewellery sales accelerated, rising 8 percent as strength at Tiffany and Bulgari outweighed sluggishness elsewhere in the division.

Jewellery “is a dynamic category,” Arnault said.

The company also sounded a positive note on its watches business, which recently lost the CEO of TAG Heuer, its biggest brand, saying sales had improved despite the headwinds buffeting the Swiss industry.

“We remain confident and continue to invest,” said LVMH managing director Stephane Bianchi.

The group’s retail unit, anchored by Sephora, also accelerated during the holidays, with sales up by 7 percent in the fourth quarter and 4 percent for the full year.

The group, which sold duty-free retailer DFS’ Greater China operation earlier this month, will continue to “exit slowly but surely” from the business, Arnault said, adding that “we’ve sold most of it.”

Family Control

Arnault, age 76, has heavily involved his five children in the group but details on his succession plan remain scarce. The group did not acknowledge demands from some investors for more clarity on the crucial matter.

The family is taking advantage of a lower share price (currently down 22 percent year on year) to increase its holding in the company, investing over €1.4 billion last year to lift its stake to 49 percent. “We’re going to get [our stake] above 50 percent this year — you see we believe in what we’re doing.”

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.