This story was updated at 5:55 p.m. EST
PARIS — LVMH Moët Hennessy Louis Vuitton is buckling up for another bumpy year.
The French luxury goods giant, which owns brands including Louis Vuitton, Dior, Sephora and Tiffany & Co., said sales fell 5 percent in the fourth quarter, impacted by weak demand and negative currency trends.
Revenues totaled 22.7 billion euros in the three months to Dec. 31, representing a rise of 1 percent at constant exchange.
In 2025 as a whole, LVMH posted revenues of 80.8 billion euros, down 5 percent year-over-year, as brightening prospects in the U.S. and the Asia-Pacific region failed to compensate for weakness in Europe and Japan.
Net profit fell 13 percent to 10.9 billion euros, while profit from recurring operations was down 9 percent to 17.8 billion euros. However, operating free cash flow rose 8 percent to 11.3 billion euros, as the group kept a tight lid on costs.
Bernard Arnault, chairman and chief executive officer of LVMH, noted group revenues had more than doubled in 10 years, but he remained cautious about prospects for the year ahead.
“The group delivered solid results despite a very challenging, turbulent, and volatile economic and geopolitical environment. We made it through this period, and 2026 won’t be easy either, but [we’ll take it] one step at a time,” he told analysts and media at LVMH headquarters.
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Operating margin fell to 22 percent in 2025 from 23.1 percent the prior year, impacted by currency fluctuations that are set to continue weighing on profitability this year.
The fashion and leather goods unit posted a 3 percent decline in revenues on an organic basis in the fourth quarter, broadly in line with consensus estimates. But wines and spirits took another hit, with a 9 percent drop, while perfumes and cosmetics turned negative during the crucial holiday period, registering a 1 percent decline.
The watches and jewelry division was a bright spot, with organic sales up 8 percent, while selective retailing maintained its momentum with a 7 percent increase.
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Betting on the Future
Signaling his confidence in the future, Arnault said his family holding will soon cross the threshold of 50 percent ownership of the group as it continues to take advantage of the market downturn to snap up shares.
“[The family group] thinks and invests for the medium term, builds products for the long run, and isn’t obsessed with what might happen next quarter,” he said.
“I often say that in our business, I’m optimistic over the medium term,” Arnault continued. “The appetite for high-quality products grows in tandem with rising living standards around the world, and I believe that trend will continue.”
In the immediate future, however, LVMH has to deal with hurdles including trade tariffs, which have impacted its exports of cognac to China and the U.S., and an extension of what had been billed as an exceptional and temporary French tax on companies with revenues of more than 1 billion euros.
“Given how quickly decisions are being made in different countries, it’s difficult to fully assess all the impacts on our businesses,” he said.
“We’ll take the same approach we did in 2025: create highly desirable products, sell them around the world, open beautiful stores, and manage the business very carefully. That means continuing to keep a close eye on costs and expenses so that cash flow continues to improve in 2026,” Arnault added.
Speaking a day after Jonathan Anderson showed his first haute couture collection for Dior, the luxury titan said he was confident in the prospects for the brand considered the jewel in LVMH’s crown.
“We attended the show yesterday, and it was absolutely fantastic. Some of the guests were moved to tears by the quality, creativity and craftsmanship of the collection,” he said, noting that former Dior creative director John Galliano was among those who cheered the display.
Arnault reported strong demand for Anderson’s first collections, which landed in stores on Jan. 2. “We’ll see how it develops — one should never be overly optimistic — but overall, it’s a very promising start,” he said.
Vectors for Growth
He also saw good prospects for the jewelry segment, following a quarter of strong acceleration at Bulgari and steady improvements at Tiffany & Co., including a record year for its Landmark store on Fifth Avenue in New York City.
“If we stay on this path — though it may take another five to 10 years — Tiffany has a real chance of becoming the world’s leading jewelry brand,” Arnault predicted.
“It’s a very promising segment. We’re also investing heavily in jewelry at Louis Vuitton, where there’s significant potential, and you’ll see it when the Champs-Élysées boutique opens,” he said, referring to the mammoth site under renovation in Paris.
However, Arnault quashed talk that Vuitton might diversify into hospitality, after opening a series of retailtainment destinations in Asia including high-end cafés and restaurants.
“When it comes to Vuitton, diversification isn’t really the priority. The brand already has a wide range of products,” he said. “To be clear: Vuitton has no plans to build a hotel.”
He also saw global expansion potential for Sephora, after another strong year.
“We only cover a very small part of the world, so there’s still so much to do, even though we’re generating significant revenue today,” he said. “But profitability is very good, growth is very good, and so anything is possible.”
While LVMH has stemmed losses at its duty-free division DFS, Arnault signaled it wants to exit the business, having sold its travel retail division in Greater China to China Tourism Group Duty Free, the nation’s biggest travel retail operator.
“We’ve sold most of our assets, and I expect we’ll continue to divest gradually,” he said.
Turning to Loro Piana, Arnault said the challenge was curbing growth. “We don’t want to move too fast, because maintaining product quality is essential, so when things start accelerating too much, we deliberately slow down,” he said.
He touted LVMH’s acquisition of an additional 9 percent in the Italian company as a good deal for the Loro Piana family.
“When companies join forces with us, two things happen. First, they grow quickly, while fully respecting their heritage. And secondly, it’s a good deal for shareholders, particularly in family-owned businesses. So if you could help spread the word, we would appreciate it,” he said.