Published by Global Banking & Finance Review®
Posted on January 28, 2026
4 min readLast updated: January 28, 2026
Add as preferred source on GoogleLVMH shares are expected to decline by 3-4% after Q4 results showed weaker margins and a cautious economic outlook, despite growth in China.
By Helen Reid
PARIS, Jan 28 (Reuters) - LVMH shares plunged on Wednesday as its fourth-quarter results dashed investor hopes of a speedy recovery in luxury demand, with the market unsettled by slow sales in the critical Chinese market and a cautious outlook from CEO Bernard Arnault.
The group's shares fell as much as 8.2%, wiping 24 billion euros ($28.76 billion) from its market capitalisation at one point. The stock was trading down 6.4% by 1100 GMT.
The world's biggest luxury conglomerate - owner of brands from Louis Vuitton to Tiffany and Moet & Chandon champagne - is a bellwether for the industry, and the move also dragged down shares in Gucci owner Kering, Moncler and Hermes by between 2% and 5%.
"If the key leader in the market is a bit more cautious for the year ahead, of course it casts a shadow for the luxury space overall," said Barclays analyst Carole Madjo.
WEAK CHINA GROWTH RAISES PROSPECT OF CONTINUED LUXURY SLUMP
The French group said sales in China - a major market for LVMH and a primary driver of growth for the broader luxury sector - were up in the quarter. But investors had expected more after upbeat comments on China from Richemont and Burberry earlier this month.
While LVMH does not provide data on China as an individual market, Asia, excluding Japan, accounted for 26% of its revenues last year. But sales in the region were up just 1% in the fourth quarter in currency-adjusted terms.
LVMH's return to growth in the region in the third quarter had spurred hopes that a lengthy luxury downturn was coming to an end, driving a massive rally in luxury stocks in October.
Morningstar analyst Jelena Sokolova, however, said the optimism that fuelled that rally is now coming up against a more complex reality.
"Investors are just getting concerned that to support the valuations where they have got to since mid-2025, there would need to be a recovery. And it doesn't seem like it's imminent," she said.
Christopher Rossbach, portfolio manager at J. Stern & Co, which holds LVMH shares, said he viewed the share drop as an overreaction.
"We remain confident that LVMH's recovery will continue through 2026, supported by creative renewals, new retail initiatives and increasing consumer demand, particularly from China," he said.
GEOPOLITICS, ECONOMIC UNCERTAINTY WARRANT CAUTION, CEO SAYS
CEO Arnault struck a cautious tone in a press conference following Tuesday's results release and said LVMH would continue to limit its costs this year.
"With the continuing geopolitical crises, economic uncertainty, and policies of certain states including our own, which are pretty anti-business ... there is reason to be prudent," he said.
Sales in LVMH's key fashion and leather goods division, which generates the bulk of profits, fell 3% in currency-adjusted terms in the fourth quarter, an important shopping period.
Barclays' Madjo said investors had been hoping for the division to beat expectations.
Chinese shoppers, including its tourists abroad, account for almost a third of LVMH's fashion and leather sales, UBS estimates.
"We are all hoping to see the entry-price consumer coming back more this year, but there are no clear guarantees at this stage. It could still take longer than what we are all hoping for," Madjo said.
The company's operating margin for the year slipped to 22%, from 23.1% in 2024, dented by a combination of U.S. tariffs, a weak dollar, and slowing demand.
Finance boss Cécile Cabanis said further sales growth will be needed for margins to rebound.
"We need growth, so we are going to focus on getting growth going again, and continuing to manage our costs," she said at the press conference.
Analysts also said a sharp 9% revenue decline at LVMH's wine and spirits group was worrying, even though the business accounts for only 6.6% of total revenue.
($1 = 0.8346 euros)
(Reporting by Helen Reid, Tassilo Hummel and Dominique Patton in Paris; Additional reporting by Danilo Masoni in Milan; Editing by Louise Heavens and Joe Bavier)
Corporate profit refers to the amount of money a company earns after all expenses, taxes, and costs have been deducted from total revenue.
Economic growth is the increase in the production of goods and services in an economy over a specific period, typically measured by GDP.
A fourth-quarter result refers to the financial performance of a company during the last quarter of its fiscal year, often indicating annual performance.
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