After a period of robust growth, LVMH has encountered significant headwinds that have pressured its performance over the past year. A slowdown in China amid economic uncertainty, broader luxury sector “fatigue,” and geopolitical tensions have weighed on key segments like Fashion & Leather Goods and Wines & Spirits. At the same time, pricing pressures and selective retailing challenges have impacted profitability, leading to a year-to-date stock decline of 28%.
Yet, LVMH’s world-class management is proving resilient in navigating these challenges. The Q4 2025 results beat expectations on the bottom line, with early signs of stabilization in China and strong US demand providing tailwinds. Fashion & Leather remains the powerhouse, while Watches & Jewelry and Selective Retailing (led by Sephora) show resilience. With “cautious confidence,” management emphasizes long-term brand investments and expects a modest rebound in 2026, aligning with consensus organic growth of 1–4%.
This blend of sector headwinds and enduring strengths creates a compelling opportunity for investors. The recent sell-off has compressed multiples to 14.6x EV/EBITDA—below historic averages—prompting the question: is the market overly pessimistic about LVMH’s ability to reclaim its growth trajectory? That brings us to the core of this update. Let’s reassess LVMH’s true worth today.
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