French conglomerate LVMH, traditionally among the last to disclose its financials during the reporting season, has delivered results that not only fell short of market expectations but also lagged behind the momentum exhibited by some of its contemporaries.

In contrast, Richemont, the parent company of Cartier, delivered a strong and unexpected surge in sales, while Italian luxury house Brunello Cucinelli posted a 12 percent increase over 2024. British brand Burberry, despite grappling with a steep decline in its share price, exceeded expectations with its third-quarter sales. LVMH, however, struck a more somber note, with its shares sliding 5 percent on Wednesday in response to its results.

Gucci-owner Kering saw its shares tumble 5.9 percent, dragged down by slower recovery and highlighting the ongoing challenges facing certain brands and groups in the luxury sector in 2025. While Richemont’s portfolio of niche maisons—Alaïa, Chloé, and Cartier—continues to thrive, it’s the industry’s biggest players that are struggling to sustain growth momentum and desirability.

Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, iterated to the Financial Times: “Had LVMH been the first to report this earnings season, this set of results would have been digested well. However, peers had already set the bar high.”

China challenges

China remains a challenging market for many luxury businesses, with demand yet to rebound to pre-pandemic shopping levels. Analysts suggest that a return to robust growth could extend until 2027.

Nevertheless, LVMH's fashion segment achieved sales of 41 billion euros in the fourth quarter, a commendable feat by any standard. While investors often demand substantial returns, LVMH has observed growth in its haute jewellery and beauty divisions, even as its spirits and alcohol brands have underperformed.

In the ever-unpredictable world of fashion, where niche collaborations can ignite desire, Louis Vuitton's recent partnership with Taylor Swift has been met with a less-than-enthusiastic response. Swift’s appearance at the AFC Championship game in a heavily branded Louis Vuitton ensemble was widely panned by industry insiders, who deemed the look more forced than fashionable.

As the luxury landscape continues to evolve, the divergent performances of these industry giants underscore the complexities and shifting dynamics of consumer preferences in 2025.