LVMH predicts ‘gradual’ luxury recovery as sales rise
Owner of Louis Vuitton and Dior reports another quarter of sales growth as luxury industry emerges from downturn
LVMH reported an increase in sales during the fourth quarter and signalled that its performance would ‘gradually improve’ in 2026, as the leading luxury group ended a tumultuous year for the industry on a positive note.
Organic sales at the group, which is controlled by billionaire Bernard Arnault and his family, grew by 1 per cent in the fourth quarter to €22.7bn, compared to the same period a year earlier.
The growth was slightly ahead of expectations and maintained momentum from the preceding quarter, which raised hopes that the luxury industry was beginning to emerge from a painful multiyear downturn.
LVMH chief financial officer Cécile Cabanis told the FT that the group’s “creative renewal” and other initiatives that had been put in place during a lean period gave it confidence that there “should be gradual improvement” in 2026.
However “the environment remains quite unsettled and uncertain, and personally, I can’t see it clearly. So we may have to react and things won’t go as planned,” she added.
Operating profit at the owner of Louis Vuitton and Dior fell by 9 per cent in 2025 to €17.8bn, although the outcome was ahead of analyst expectations compiled by Visible Alpha, for a 12.4 per cent drop.
Cabanis said that around 5 percentage points of the hit to profits was down to negative currency effects and the other 4 percentage points due to weaker performance.
The Paris-listed luxury group’s results come after a disruptive year in which trade tensions between the US and China — luxury’s two biggest markets — cast a shadow over the industry.
Sales at virtually all high-end brands have suffered during a period of suppressed consumer spending which came after several years of steep price rises.
Analysts are expecting that US consumers will drive a recovery in luxury sales in 2026.
A new wave of designer debuts, including Jonathan Anderson at Dior, is also expected to reinvigorate the product ranges of luxury’s big brands though Cabanis noted that the impact on performance would be “gradual”.
Operating income at LVMH’s struggling wine and spirits division took the biggest hit in 2025, falling by 25 per cent to €1bn, as health-conscious consumers across the world reduced their alcohol intake.
Meanwhile profits at the group’s crucial fashion and leather goods division fell by 13 per cent to €13.2bn. Sales of fashion and handbags fell by 3 per cent in the fourth quarter.
LVMH’s watch and jewellery brands, which include US jeweller Tiffany, were a bright spot. Sales grew by 8 per cent organically in the fourth quarter, though operating profit at the division declined by 2 per cent to €1.5bn in the year.