LVMH Shares Slide: Luxury Giant Faces Market Challenges

PARIS, France — LVMH Moët Hennessy Louis Vuitton saw its shares decline by 3 percent on Thursday, marking a total loss of 25 percent this year. This represents the company’s most significant drop since the financial crisis of 2008, pushing its market value to approximately €239 billion ($270 billion) and below that of Swiss competitor Nestlé SA.

The downturn reflects growing concerns over demand from China and the potential impact of U.S. tariffs under former President Donald Trump, which may affect consumer spending in the U.S. Analysts have noted that LVMH, similar to other luxury brands, faces challenges in navigating these issues.

Morningstar analyst Jelena Sokolova remarked, “For shares to reprice, we’d need to return to some growth in the industry and/or some relative outperformance versus peers.” She expressed uncertainty about the likelihood of this happening in the current year.

In its recent outlook, LVMH has issued cautious signals regarding second-quarter performance, indicating weak demand trends. Barclays analyst Carole Madjo has downgraded the stock to equal-weight, citing that she does not expect the company’s key fashion and leather-goods division to rebound soon.

Moreover, the continuing tensions in the luxury goods sector, especially in the U.S., are leading to investor anxiety about a sluggish recovery in the market. A report has indicated that over recent months, LVMH’s stock has gradually lost its standing as one of the top ten globally, an impressive position held as recently as 2023.

This year’s challenges prompt industry analysts to ask if the luxury sector can redefine its growth strategies amidst shifting consumer confidence and market dynamics. As LVMH navigates this critical juncture, it remains to be seen how the brand will adapt to restore stability and confidence in its offerings.