Louis Vuitton store window display in Mitsukoshi department store in Tokyo, Japan, on Friday, April 4, 2025.
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Shares of LVMH plunged 8% on Tuesday morning after the world’s largest luxury group posted an unexpected decline in first-quarter sales.
The company reported a 3% year-on-year fall in first-quarter sales in a trading update published shortly after the market close on Monday, missing consensus analyst expectations for slight growth.
Wines and spirits saw the sharpest revenue decline, down 9%, as it flagged weaker demand in the U.S. and China for cognac — the popular brandy variety that has been caught up in geopolitical tensions.
The key fashion and leather goods division, which accounted for 78% of profit in 2024, slid 5%. Sales of watches were flat.
Europe was the only region to record growth, up 2% on an organic basis. Asia excluding Japan plunged 11%, U.S. sales were 3% lower, while Japan was down 1%.
The results pulled down the wider sector in early deals amid broader market gains. Kering shares dipped 2.5%, Burberry fell 4.2% while Richemont traded 2.26% lower.
Citi analysts Thomas Chauvet and Mahesh Mohankumar said in a Monday evening note that there was “not much to cheer for at the luxury bellwether,” with sales “overall below the most conservative buyside expectations.”
They added that it was difficult to foresee sequential revenue improvement in the second and third quarters for either LVMH or the luxury sector while U.S. and global economic uncertainty remained elevated.
Analysts at Jefferies meanwhile cut their target price on the stock to 510 euros ($578.62) from 670 euros.
The luxury sector, reliant on global supply chains and U.S. consumer demand, is facing a host of headwinds from U.S. President Donald Trump’s volatile trade policy.
LVMH, which owns brands including Louis Vuitton, Moët & Chandon and Hennessy, is the first major European luxury firm to report first-quarter earnings since Trump announced — and then delayed — reciprocal tariffs on its global trading partners.
As such, investors are seeking an indication of the firms’ forward guidance on the potential impact of tariffs on input costs and consumer demand.
LVMH Chief Financial Officer Cecile Cabanis told analysts in a Monday call that trade tensions were complicating the group’s ability to do business, with parameters “changing every hour,” Reuters reported.
Luxury brands are expected to be more sheltered than other retailers from the immediate impact of tariffs, with high-end labels typically better able to pass on added costs to wealthy consumers.
Still, analysts have warned that the potential for a tariff-induced economic downturn could weigh heavily on demand —particularly in the key U.S. and China markets — further delaying the sector’s recovery from a period of prolonged weakness.
