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LVMH Sales Decline 3%, Losing Market Leadership to Hermès

Weak demand in the US and China, compounded by tariff uncertainties, triggers a sharp drop in LVMH shares and a temporary market cap reversal with Hermès.

A logo of Louis Vuitton is displayed on a Louis Vuitton store on the Champs-Elysees avenue in Paris, France, March 30, 2024. REUTERS/Gonzalo Fuentes/File Photo
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Women walk past the logo of LVMH Moet Hennessy Louis Vuitton in front of the LVMH luxury group headquarters in Paris, France, April 14, 2025. REUTERS/Sarah Meyssonnier
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Overview

  • LVMH reported a 3% decline in Q1 2025 sales, generating €20.3 billion in revenue, falling short of analyst expectations for 2% growth.
  • The Fashion & Leather Goods division saw a 5% sales drop, while Wines & Spirits declined by 9%, reflecting weaker demand in key markets like the US and China.
  • Aggressive US tariff policies under President Trump have heightened economic uncertainty, dampened consumer spending, and contributed to the luxury sector's struggles.
  • LVMH shares fell 7-8%, temporarily losing its market cap leadership to Hermès, which has been less affected by industry-wide challenges.
  • Analysts warn of prolonged headwinds for the luxury sector, with potential for further earnings cuts and delayed recovery due to global trade tensions and economic instability.