Published by Global Banking & Finance Review®
Posted on April 14, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleLVMH's Q1 sales declined 3%, missing expectations due to weak US and China markets. Trade tensions and recession fears impact luxury sector.
By Mimosa Spencer, Tassilo Hummel
PARIS (Reuters) -LVMH's first-quarter revenue undershot expectations, as shoppers in the United States pulled back on beauty products and drinks while sales in China stayed weak, the world's largest luxury group said on Monday.
The 3% decline in first-quarter sales - well below analyst expectations for 2% growth in January to March - were a first sign that luxury companies could face another tough year following President Donald Trump's recent tariff announcements, which sparked fears of a recession.
LVMH's New York-listed depositary receipts fell by as much as 7.5% after the results were released.
Speaking to analysts, LVMH's finance chief, Cecile Cabanis, said the group's high-end leather goods and fashion brands were still "well-oriented" in the United States, but that the performance of its mass-market retail chain Sephora, along with cognac and beauty products, weakened.
"The U.S. deceleration was essentially driven by Sephora," Cabanis said, adding that Amazon.com was "very aggressive" on prices.
Cabanis said trade tensions, which have sent global markets on a rollercoaster ride, were making it complicated to conduct business. "These days, parameters are changing every hour."
The French company behind Louis Vuitton and Dior, jewellery brand Bulgari and Hennessy cognac, has had a difficult start to the year, said a Bernstein note.
Globally, the fashion and leather goods division, accounting for nearly half of group sales and over 75% of its profit, posted a 5% fall in sales, below expectations for a flat performance.
"Investor concerns around underlying demand recovery are likely to be amplified based on these results," said analysts at RBC, adding that further earnings cuts are likely due to tariff-related risks.
Louis Vuitton, its biggest brand, still outperformed the division while Dior continued to lag, Cabanis said. Bernstein noted that changes in creative direction at Dior were "slow to appear."
RECESSION FEARS
Europe's luxury players, also including Hermes, Kering and Prada, were counting on wealthy Americans to reignite growth for the sector as the outlook for China remained bleak.
But with fears of a U.S. recession, the sector is bracing for what could be its longest slump in years.
Sales in the U.S. market fell 3% in the first quarter, while in the Asia region excluding Japan they were down 11%. Total group sales for the three months to the end of March came to 20.3 billion euros ($23.08 billion).
The luxury sector, selling prized items to rich shoppers at high margins, is better positioned than other industries to use its pricing power to shield profits against Trump's tariffs, which would include a 20% charge on European fashion and leather goods and 31% for Swiss-produced watches if fully applied.
Last week, Trump paused most of his tariffs for 90 days, setting a general 10% duty rate instead.
Finance chief Cabanis said the company was still looking at producing more in the United States, "but we'll see at what pace and how much we want that to evolve."
The group has three Louis Vuitton factories and some Tiffany workshops in the country, making it the only major European luxury group to produce locally.
LVMH has faced a host of problems limiting production at its high-profile Texas facility, with the site consistently ranked among the worst-performing for Louis Vuitton globally, Reuters reported.
Sales at LVMH's wines and spirits division, home to Krug champagne and Hennessy cognac, were down 9%.
($1 = 0.8797 euro)
(Reporting by Mimosa Spencer and Tassilo Hummel; Editing by Susan Fenton and Matthew Lewis)
The article discusses LVMH's first-quarter sales decline and its impact on the luxury sector amid US and China market weaknesses.
Sales declined due to reduced consumer spending in the US on beauty products and drinks, and weak sales in China.
Trade tensions have created a challenging business environment, contributing to market volatility and complicating operations.
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