LVMH Q1 sales drop amid Trump tariffs, sluggish luxury demand in key markets
LVMH faces declining sales in Q1 2025 as tariffs and falling demand impact key markets and product categories.
FRANCE – LVMH reported a two percent decline in first-quarter sales for 2025, amounting to €20.3 billion (US$23 billion), citing the economic impact of US President Donald Trump’s tariff policies.
The global luxury group attributed the downturn to reduced demand in major markets, particularly the United States and China.
Sales in the US dropped three percent compared to the previous year, while Asia—excluding Japan—experienced an 11 percent decrease.
The company’s wine and spirits segment was the most affected, falling by 8 percent globally on an organic basis. The division’s champagne sales reflected what LVMH described as the “ongoing normalisation of demand.”
Cognac performance, in particular, was hindered by weakened consumer demand in China and the US.
Cognac’s decline significantly impacted the company’s overall wine and spirits category, which generated €5.86 billion in 2024, with the US accounting for 34 percent of this figure. However, the group reported a strong start to the year for its Provencal rosé wines.
LVMH’s fashion and leather goods division, which contributes nearly half of total revenue and over 75 percent of profits, also recorded a five percent drop in sales, underperforming market expectations of flat growth.
The combined sales contraction confirmed analysts’ concerns that luxury brands might face a challenging year due to global trade tensions.
The economic uncertainty follows recent tariff announcements by President Trump, which have raised fears of a possible recession.
LVMH Chief Financial Officer Cecile Cabanis noted that the unstable global environment was complicating business planning and financial forecasting. “These days, parameters are changing every hour,” she said.
Although the US and EU have temporarily paused additional retaliatory tariffs—previously set to affect products such as Cognac and American bourbon—current US imports remain subject to a 10 percent surcharge. Meanwhile, China has held off on imposing a 35 percent tariff on Cognac but continues to enforce a deposit scheme.
In an effort to reassure investors, LVMH reaffirmed its long-term commitment to brand development, innovation, and product quality.
Cabanis also indicated the company is evaluating increased production within the United States to mitigate tariff exposure, though the timeline remains uncertain.
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