Disappointing full-year results from LVMH suggest that the global luxury sector is facing more than a short-term slowdown, with challenges likely to persist into 2026, according to new analysis.
Commenting on the figures for the year ending 31 December 2025, Sharon Iles, senior apparel analyst at GlobalData, said the performance underlined “persistent struggles within the overall luxury market”.
LVMH reported a 4.6% fall in full-year revenue to €80.8bn, while fourth-quarter sales declined by 5.1%, marking a deterioration compared with the third quarter. Investor concerns over the outlook sent the group’s share price down by around 7% in early trading.
Chief executive Bernard Arnault struck a cautious tone, warning that 2026 would be challenging and signalling tighter controls on costs and expenses.
Regional performance remained uneven. Asia excluding Japan saw organic sales fall 4%, underperforming the group average as consumer spending in China remained subdued amid ongoing economic headwinds. Despite this, LVMH continued to invest heavily in the region, including the opening of a ship-shaped Louis Vuitton flagship in Shanghai in June 2025 and a new Dior store in Beijing in December, both of which have begun to gain traction.
Japan was the weakest-performing market, with organic revenue down 12%, reflecting tough year-on-year comparisons and volatility in the yen. By contrast, the US held up relatively well, with flat organic growth driven by resilient spending from ultra-high-net-worth consumers. Europe’s organic sales fell by just 1%, but Iles noted that momentum weakened as the year progressed, partly due to reduced US tourism and softer consumer confidence.
By division, the Fashion and Leather Goods segment, LVMH’s largest, saw revenue fall 8%, although the rate of decline eased over the course of the year. Creative initiatives have helped restore cultural momentum, with high-profile collaborations under Pharrell Williams at Louis Vuitton menswear and Jonathan Anderson’s first Dior collection generating strong buzz and positive critical reception. According to GlobalData, these creative successes are now beginning to translate into commercial gains, albeit gradually.
Selective Retailing was the group’s strongest-performing division, with sales flat year on year. Growth was supported by Sephora, which has continued to attract younger consumers and strengthen its position as a leading prestige beauty destination.
The Wines & Spirits division faced the most acute challenges, with sales down 9.4%. Weak demand in China and the US, combined with tariff-related operational issues, weighed heavily on performance.
Iles concluded that while pockets of resilience remain, LVMH’s results highlight broader structural pressures on the luxury sector. Slowing demand in key markets, shifting consumer behaviour and geopolitical uncertainty suggest that the industry’s recovery is likely to be uneven and prolonged, rather than a rapid rebound.
