(BFM Stock Exchange) – The number one of luxury delivered sales backwards on Monday evening and significantly lower than expectations in the first quarter, in particular in its fashion and leather goods division. LVMH also suffered from the deterioration of Chinese demand and to a lesser extent American.
Plusted by a pronounced shortness of breath, the luxury sector found itself under pressure in 2024. But the recovery signs observed at the end of the past year increased a better vintage in 2025.
However, the figures published Monday evening by LVMH, the number one in the sector, confirms that the luxury market remains under pressure.
The owner of Louis Vuitton, Céline and Dior has indeed delivered an activity largely in the expectations over the first three months of 2025, marking a new disappointment after having reconnected with growth in the last quarter of 2024.
The market does not hesitate to sanction the copy of the number one of luxury. On the Paris Stock Exchange, its action dropped by 5.5% this Tuesday at the start of the session, after being reserved downwards at the opening. In the wake of the luxury conglomerate, Christian Dior gives 6%; Kering yields 3.4%, Hermès 2.5%.
A degradation of demand
Over the period from January to the end of March, the number one of luxury recorded income of 20.311 billion euros. This reflects a fall in sales of 2% in published data and 3% in comparable data (with a exchange effect of +1% and a zero perimeter effect).
According to a consensus visible Alpha cited by Reuters, analysts tabbed on income up 2% in comparable data. This constitutes a sequential degradation, that is to say from one quarter to the other. The turnover of the luxury group had increased by 1% in data comparable to the fourth quarter.
“LVMH has experienced a less good start to the year, all divisions displaying sales lower than expectations. Performance has notably been assigned by a slowdown in Chinese purchases in Japan, unequal consumption trends in continental China (strong Chinese New Year, followed by slowing down), and lower demand in the United States for Cognac and Beauty products” independent alphavalue.
“Fashion and leather goods” disappoint
The disappointment comes for many from the most important division of society, “fashion and leather goods”. Over the first three months of the year, this activity has seen its revenue fall by 5% in comparable data.
“We assume that the contraction is mainly due to a lower demand in China after the Chinese New Year and a reduction in the expenses of Chinese tourists in Japan,” said Jie Zhang. This division suffered from a deterioration in the demand of Chinese customers, whose expenses have been reduced due to increasing macroeconomic uncertainties.
As for other divisions, “perfumes and cosmetics” also fell, by 1%, in comparable data, the “watch and jewelry” division is stable, however, marking a sequential slowdown after growth of 3% in data comparable to the fourth quarter.
“The group said that performance in the United States, both for fashion and leather goods and for watches and jewelry, were very consistent with the previous year,” said the analyst.
On the side of selective distribution (Sephora, sales at airports), this division saw its sales contract by 1%, where consensus was more optimistic (+5%) for this division, and after an increase of 7%at the end of 2024. Jie Zhang explains that the slight decade of Sephora in the United States is linked to the strong competition from Amazon and its aggressive price strategy.
“Wines and spirits” accuse a 9% drop in comparable data. “Champagne activity is slightly decline in a context of continuous normalization of demand. Moët & Chandon returns to the podium of Formula 1 as an official champagne. The cognac is penalized by a lower demand in China and in the United States. The portfolio of Provence wines of Provence is a good start to the year,” explains the world number one.
By region, the United States has a decrease of 3% in comparable data, against growth of 3% in the previous quarter. “The performance of the group was mainly affected by the unpredictable behavior of consumers in China (Asia outside Japan: -11%), the slowdown in beauty products and cognac in the United States (-3%), and Japan (-1%compared to the previous year), which suffered from a high comparison base”, notes Jie Zhang.
“vigilant and confident”
“In a disturbed geopolitical and economic context, LVMH remains both vigilant and confident at the start of the year,” said the number one of luxury on Monday evening.
However, the risks linked to customs duties announced by the American administration and then suspended for some by Donald Trump will fear a contraction of the luxury market this year.
In the case of LVMH, the United States contributed 24% of the turnover of the luxury group over the first three months. The company says it is ready to overcome American customs duties.
AlphaValue recalls that the group said that it was difficult to assess the impact of customs duties and that it continued to think that negotiations could lead to a favorable result.
The design office also reports that LVMH has three production sites for Louis Vuitton in the United States, which currently provide a third of local demand. “With Tiffany’s production capacities in the United States, this could constitute an additional lever for the group,” he adds.
But overall, the customs policy of the Trump administration will cause uncertainty. Which even led Bernstein to review his prospects for the luxury sector. In a note unveiled last week, the design office had lowered its market forecast for the entire sector, now retaining a 2% contraction against growth of 5%, previously.
“What concerns us are the effects of second and third order: uncertainty, the recent stock market crash, the devaluation of the dollar and the threat of a global recession,” said Bernstein.
Sabrina Sadgui – ©2025 BFM Bourse
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