Louis Vuitton Store Window Display in the Mitsukoshi department store in Tokyo, Japan, Friday April 4, 2025.
Bloomberg | Getty images
Actions of Lvmh Immersed up to 8% Tuesday, sometimes losing its position as the world’s larger luxury business to compete with Hermès after an unexpected drop in sales in the first quarter.
LVMH declared a decrease of 3% in annual shift First trimester sales In a commercial update published shortly after closing the market on Monday, the expectations of missing consensus analysts for slight growth.
The results lowered the wider sector in morning transactions in the midst of wider market gains. Kering Shares decreased by 2.5%, Burberry fell 4.4% while Richemont exchanged 1.6% lower.
LVMH shares have dropped from 7.55% to 12:28 p.m. in London, in progress for the worst session since March 2020. A drop by 0.26% of the action of Hermès saw the market capitalization of the Birkin Bag-Maker exceed that of LVMH.
The measures in early afternoon put LVMH market capitalization at 244.7 billion euros ($ 277 billion) against 245.4 billion euros in Hermès, according to a CNBC calculation of LSEG data.
LVMH has spent several years as the most precious business in Europe from 2021, because luxury actions were supported by hopes of a post-19th pandemic boom. It has lost more than 45% of its value since its record fence in 2023.
It was overwhelmed by the Danish drug manufacturer Novo Nordisk At the end of 2023 – Before the manufacturer of weight loss drugs, Ozempic and Wegovy was itself usurped by the German software company SAP in March 2025.
Drop-trimester
LVMH wines and spirits saw the drop in the strongest income in the first quarter, down 9%, because it reported lower demand in the United States and China for Cognac – the variety of popular Brandy that has been taken in geopolitical tensions.
The main fashion and leather items division, which represented 78% of the profit in 2024, slipped 5%. Watch sales were stable.
Europe was the only region to record growth, up 2% on an organic basis. Asia excluding Japan plunged 11%, American sales was less than 3%, while Japan was down 1%.
Citi Thomas Chauvet and Mahesh Mohankumar analysts said in a note on Monday evening that there was “not much to encourage the Luxury Bellwether”, with sales “in all the most conservative purchasing expectations”.
They added that it was difficult to predict the improvement of sequential income during the second and third quarters for the LVMH or the luxury sector while American and global economic uncertainty has remained high.
“While structural growth engines remain in place, short -term visibility is very limited, in particular in the light of tensions and commercial prices … The next positive catalyst for LVMH / The sector will probably have to come from a macro surprise, because the fundamentals will probably remain difficult in the short term,” said Bank of America Global Research analysts in a note.
Pricing
The luxury sector, depending on the world supply chains and the demand of American consumers, is Facing a multitude of opposite winds in the volatile trade policy of American president Donald Trump.
LVMH, which has brands such as Louis Vuitton, Moët & Chandon and Hennessy, is the first major European luxury enterprise to publish profits from the first quarter since Trump announced – then delayed – reciprocal prices on its global trade partners.
As such, investors are impatient of an indication of the directives of companies on the potential impact of prices on input costs and consumer demand.
LVMH financial director, Cecile Cabanis, told analysts during a Monday call that the group had not seen a “major trend change” in the first quarter and that it continued to see solid growth in the last six months.
“It is true that the ambitious customers are always more vulnerable in economic cycles and less positive uncertainties, and this could have had a certain impact in recent weeks, but rather on categories such as wines and minds and beauty,” said Cabanis, according to a transcript Factst.
Cabanis refused to specifically comment on prices in the second quarter, but said that he was considering using the repair of goods as a level to moderately compensate inflation or foreign exchange oscillations.
Luxury brands should be more sheltered than other retailers in the immediate impact of prices, with high -end labels better capable of passing on additional costs to rich consumers.
However, analysts have warned that the potential of an economic slowdown induced by the prices could weigh heavily on demand – especially on the main American and Chinese markets – further delaying the resumption of the sector of a period of prolonged weakness.
