- LVMH shares dropped 7.8% after Q1 sales missed expectations, marking its worst day since March 2020.
- The decline allowed Hermès to overtake LVMH in market value, with a modest 0.2% gain boosting its market cap to €246.4B.
- LVMH’s sales slump was led by a 9% drop in wines and spirits and a 5% dip in fashion and leather goods, hit hardest in Asia and the US.
- Analysts flagged ongoing global economic uncertainty, weak demand in key markets, and the potential fallout from tariff tensions as concerns for the broader luxury sector.
A Market Shakeup
LVMH, the world’s largest luxury conglomerate, has lost its crown.
On Tuesday, the company’s shares fell nearly 8% following a surprise Q1 revenue decline, handing rival Hermès the title of most valuable luxury stock, as reported by CNBC.
LVMH’s market value now stands at €244.1B, slightly behind Hermès’ €246.4B.
Missed Expectations
Despite hopes for post-pandemic momentum, LVMH reported a 3% year-over-year revenue dip in the first quarter—well below analyst forecasts. According to Citi, sales were “below the most conservative buyside expectations,” sparking sector-wide declines that saw shares of Kering, Burberry, and Richemont fall as well.
By The Numbers
- Wines and spirits: -9%
- Fashion and leather goods (78% of 2024 profits): -5%
- Watches: Flat
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Regional breakdown
- Europe: +2%
- Asia (ex-Japan): -11%
- US: -3%
- Japan: -1%
A Luxury Slowdown
LVMH’s struggles come amid softening demand from aspirational buyers in the US and China, two of its most important markets. Weaker consumer sentiment, potential tariffs, and currency swings have added further pressure.
Cautious Outlook
Executives struck a careful tone, with CFO Cécile Cabanis noting no “major change in trend” but acknowledging vulnerability among aspirational shoppers. She also suggested price increases could be used to counter cost pressures, though no specifics were given.
Big Picture
Luxury stocks soared post-Covid on pent-up demand and aspirational spending, but the tide may be turning. LVMH, which once held the title of Europe’s most valuable company, has now lost 45% of its value since peaking in 2023.
With the sector navigating macroeconomic headwinds and tariff uncertainty, the next catalyst may need to come from a broader economic turnaround—not brand performance alone.
