The news: LVMH Moët Hennessy Louis Vuitton’s Q4 results exceeded analysts’ top-line forecasts, but its modest growth suggests that the luxury sector may take some time to bounce back from last year’s sluggish results.

The numbers:

• Q4 revenues of €23.93 billion ($25.89 billion), up 1% YoY organically, surpassed analysts’ expectations of €23.50 billion ($25.42 billion).
• Q4 revenues for fashion & leather goods, which includes Louis Vuitton and Dior, fell nearly 1% YoY organically to €11.14 billion ($12.05 billion) but beat forecasts of €10.92 billion ($11.81 billion).
• Q4 selective retailing revenues grew 7% YoY organically to €5.70 billion ($6.17 billion). Sephora delivered “remarkable performance” with double-digit growth in both revenue and profit.

Full-year performance:

• Revenues rose 1% organically to €84.68 billion ($91.62 billion), just ahead of expectations (€84.36 billion/$91.27 billion).
• Net profit fell 17% YoY to €12.55 billion ($13.58 billion), missing forecasts of €13.45 billion ($14.55 billion).

The context: The better-than-expected results dovetail with similar positive results from other luxury companies.

• Cartier owner Richemont’s sales soared 10% during the three months through December at constant exchange rates, well ahead of the less than 1% gain that analysts expected.
• Burberry’s global comparable store sales fell 4% YoY, easily outpacing the consensus estimate for a 12% decline.

LVMH, like other luxury retailers, saw gains in the US—an encouraging sign for an industry grappling with a global slowdown in demand.

Our take: While we expect US luxury sales to accelerate to 3.5% YoY this year, much remains uncertain due to the Trump administration’s ambiguous economic policies that include widespread tariff threats but few specific details.

Given the challenges in China and elsewhere, the road to sustained growth in the global luxury market may still face speed bumps ahead.

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