Is It Time to Buy LVMH Shares?

LVMH, the French luxury powerhouse behind Louis Vuitton, Dior, and Moët & Chandon, stands as a global benchmark for the high-end goods industry. As Europe’s second-largest company after semiconductor leader ASML, the group’s performance often sets the tone for the entire luxury sector. Following the release of its latest financial results, investors might be wondering: does LVMH’s recent rebound signal a new phase of growth? And what challenges could still weigh on its momentum? Here’s a closer look.

LVMH Reported Its First Quarter of Growth in 2025

After two consecutive quarters of contraction, LVMH finally returned to growth in the third quarter of 2025, posting a 1% increase in sales to €18.28 billion ($21.17 billion). The rebound comes after a 4% decline in the previous quarter and offers a much-needed sign of stabilization for the world’s largest luxury goods group — and, by extension, for a sector that has faced persistent headwinds since early 2024.

The turnaround was largely driven by a gradual recovery in China, where sales turned positive again for the first time this year. According to Chief Financial Officer Cécile Cabanis, mainland Chinese consumers showed renewed appetite for high-end fashion and experiences, such as Louis Vuitton’s flagship ship-shaped boutique in Shanghai. While spending by travelling Chinese shoppers remained below last year’s levels, the domestic momentum helped offset earlier weakness and restored confidence in Asia’s contribution to growth.

Elsewhere, demand in Europe and the United States remained “solid,” reflecting resilient local consumption despite a more cautious global backdrop. LVMH noted a “noticeable” improvement in overall trends across Asia excluding Japan, underscoring a broader regional stabilization after months of uneven demand.

This modest yet symbolic growth marks LVMH’s first positive quarter of 2025 and a potential inflection point for the luxury industry. The group’s diverse portfolio — spanning fashion, wines and spirits, perfumes, watches, and retail — continues to act as a barometer for global luxury trends. After a challenging start to the year marked by fading demand in China and uncertainty around U.S. tariffs, the third-quarter uptick suggests that the worst of the slowdown may be behind the sector, even if the path to sustained recovery remains gradual.

But LVMH Still Faces Several Headwinds

After returning to modest growth in the third quarter of 2025, LVMH remains under pressure from several structural and cyclical challenges that could weigh on its performance into 2026. While demand has stabilized in some key regions, the group continues to navigate weaker appetite for high-end products, volatile economic conditions, and rising operational costs.

1. The Aftermath of Price Increases

Luxury brands thrived during the pandemic by sharply raising prices, but that strategy is now showing its limits. Between 2020 and 2023, luxury brands increased prices by an average of 36% according to Bernstein—well above inflation—with Dior’s prices surging 51%, Louis Vuitton’s 32%, Bulgari’s 39%, and Tiffany’s 40%. These hikes, which once fueled record profits, are now dampening demand, particularly among aspirational buyers who were key to growth in recent years.

Yet lowering prices isn’t an option. Doing so would erode brand prestige and signal weakened desirability—something luxury houses carefully avoid after spending billions on image and exclusivity. For now, LVMH and its peers are likely to maintain current pricing, waiting for income growth and easing inflation to make their goods feel more affordable. Some may also introduce more accessible product lines to reignite demand without diluting brand value.

2. Tariffs and Trade Uncertainty

The reemergence of tariff tensions is adding new risks. Since August, European exports to the U.S.—which “accounts for around €80 billion of the €363 billion in global luxury goods revenue” according to the French Union of Fashion and Clothing Industries (UFIMH)—have faced a 15% import duty. For LVMH, the challenge lies in finding a balance between preserving margins and maintaining competitiveness. Passing the full tariff cost onto consumers could deter buyers, but absorbing it would compress profits.

As LVMH’s finance chief Cécile Cabanis noted, the impact varies by brand and category. The U.S. remains a crucial market, accounting for a significant share of global luxury sales and serving as a counterbalance to China’s slowdown. Wealthier American consumers, supported by strong stock market gains, continue to spend according to Bank of American, but higher tariffs threaten to test their resilience over the coming quarters.

3. Currency Headwinds

Exchange rate fluctuations have also become a drag on performance. LVMH reported that currency movements reduced revenue by 2% over the first nine months of 2025, and by as much as 5% in the third quarter alone. The appreciation of the euro against major currencies has particularly affected tourist spending—a key driver of luxury sales in Europe—and could continue to weigh on profitability if volatility persists.

4. Rising Gold and Silver Prices

Soaring precious metal prices are another pressure point for LVMH’s jewellery and watch divisions. Gold has more than doubled in two years, surpassing $4,000 an ounce, while silver has climbed above $50. This surge, mostly driven by investor demand for safe havens amid geopolitical and economic uncertainty, as well as higher expectations of rate cuts in the U.S., threatens to squeeze margins at brands like Tiffany and Bulgari, which are among LVMH’s top five profit contributors.

With watches and jewelry making up more than 12% of its revenue, the French group may eventually have to raise prices to offset higher input costs—risking further strain on demand in an already price-sensitive environment.

5. Sluggish Chinese Demand

China’s once-reliable luxury boom has slowed markedly. Weighed down by a property crisis, weak consumer confidence, and the lingering impact of trade tensions, China’s luxury market shrank by between 18 and 20% in 2024 according to Bain & Company, which expects 2025 to remain flat, with only a gradual recovery in the second half as stimulus measures take effect.

Mainland China, which represents roughly a third of LVMH’s global luxury sales, is therefore unlikely to deliver meaningful growth in the short term. Today, the country’s GDP growth figures are likely to show a deceleration to around 4.8% this year and could ease further to 4.3% in 2026 according to Reuters—well below pre-pandemic levels. Until confidence and household wealth recover, Chinese spending on luxury goods will likely remain muted.

6. The Rise of the Secondhand Luxury Market

Finally, the rapid growth of the resale market represents a long-term structural challenge. According to a BCG–Vestiaire Collective report, the secondhand luxury market is expanding three times faster than the primary market, growing 10% annually and projected to reach up to $360 billion by 2030.

While secondhand platforms introduce younger consumers to luxury brands, they also threaten to cannibalize new product sales and weaken the aura of exclusivity that underpins the sector. For LVMH, which has traditionally resisted engaging directly in resale, adapting to this shift will require a careful balance between preserving brand prestige and embracing evolving consumer habits.

What Should Investors Expect from LVMH’s Shares?

LVMH’s latest results have reignited optimism around both the company and the broader luxury sector. The group’s stock surged as much as 14% after reporting its first quarterly sales increase of 2025, marking its strongest single-day gain since 2001. Investors welcomed the rebound as a sign that demand may be stabilizing after a difficult year for global luxury brands. Despite being down around 4.7% since January—trading near €605 per share and still well below its 2023 record high above €900—LVMH is once again drawing attention as a long-term value story rather than a short-term trade.

Analysts are increasingly confident that the worst of the sector’s downturn is behind it. Morgan Stanley recently upgraded its outlook for LVMH, pointing to a “burst of creativity” across the group’s fashion houses and a growing emphasis on more accessible product lines. Kepler Cheuvreux echoed this sentiment, noting that investor enthusiasm at recent Fashion Weeks reflected a strong response to the new collections—an encouraging shift after what many had described as a “creativity crisis” in 2024.

The industry is also adapting to changing consumer behavior. Many luxury brands, including those within the LVMH portfolio, are introducing more affordable items and refreshing their designs to reconnect with younger and more price-sensitive clients. These strategic moves could help balance slower demand in China and offset the effects of past price hikes.

Still, recovery is expected to unfold gradually. UBS forecasts 4% organic growth for the luxury sector in 2026, with meaningful acceleration likely in the second half of next year as new creative directions translate into fresh products on store shelves.

For long-term investors, LVMH remains one of the most resilient and diversified players in global luxury. Its unmatched brand portfolio, strong pricing power, and ability to adapt to shifting trends position it well to regain momentum over time. While short-term volatility may persist, the group’s renewed creative energy and strategic focus suggest that the foundations for its next growth cycle are already being laid.

Sources: LVMH, Wall Street Journal, Reuters, CNBC, Le Monde, Investopedia, Bain & Company, BCG