By Sabrina Escobar
LVMH Moet Hennessy Louis Vuitton's 2025 and fiscal fourth quarter topped analysts' expectations, but the company's weak sales growth for the year suggests the luxury market's recovery still has a way to go.
LVMH's revenue full-year revenue of EUR80.8 billion ($96.7 billion) was better than the EUR80.5 billion ($96.3 billion) analysts had expected, but declined 5% from the prior year, or 1% when stripping out currency fluctuations, also known as organic growth.
Organic revenue for the quarter ended in December rose by 1% from the prior year to EUR22.7 billion. Analysts polled by FactSet were expecting EUR22.37 billion.
The company's profit also took a hit, although the company said this was largely because of currency fluctuations. Operating profit from recurring operations fell 9% year over year to EUR17.8 billion in 2025 from EUR19.6 billion in 2024. Full year earnings of EUR21.85 ($26.14) a share beat estimates for EUR21.40 ($25.60) a share.
LVMH's U.S.-listed depositary shares were down 1.1% Tuesday afternoon.
Luxury brands have struggled to drive consumer demand in the past two years. Global consumers have chafed at price increases, while customers in the industry's top markets -- China and the U. S. -- have been grappling with economic strains that have weighed on luxury shoppers' budgets.
"The results of the group are solid in a rather challenging, disrupted climate, economically, from the geopolitical standpoint, but we've managed to get through this period," said CEO Bernard Arnault on a call with investors Tuesday. "2026 won't be simple either, but one thing at a time."
He added that it was hard to provide a "serious forecast" in the short term given the ever-changing nature of geopolitics and global economics, and that there were sufficient reasons to be "somewhat reserved" this year.
"One thing I'm sure of is that the desire for high quality products goes hand in hand with growing living standards in the world," Arnault said.
Indeed, while LVMH's results suggest the sector may continue to struggle this year, there were promising signs of sequential improvement.
Sales improved in the second half of the year, with the U.S. and Asia excluding Japan turning to modest growth in the third and fourth quarters. On a yearly basis, however, organic revenue declined 4% in Asia and was unchanged in the U.S. Europe, which accounts for a little over a quarter of the company's total revenue, turned negative in the second half of the year, LVMH said.
Within LVMH's business groups, watches and jewelry, and selective retailing -- such as Sephora -- were the only segments to notch growth throughout the year, up 3% and 4%, respectively. Sales of fashion and leather goods, and wines and spirits, both fell 5% this year. The spirits category was particularly affected by trade tensions with the U.S. and China, LVMH said, with cognac demand coming under pressure.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 27, 2026 13:27 ET (18:27 GMT)
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