LVMH shares have fallen to their lowest level since 2020, with three factors helping explain the slide. In April 2023, the French luxury giant became the first European company to reach a market value of US$500 billion. Today, that figure has shrunk to US$213 billion, with the share price (down more than 10% over the past month) now close to its January 2020 level. The decline has come despite LVMH reporting profits of €17.8 billion in 2025, more than 50% higher than in 2019. The Financial Times has examined what’s behind the fall in LVMH’s stock.
LVMH shares at their lowest
The luxury slowdown began about three years ago, as aspirational consumers were squeezed between the rising cost of living and higher luxury prices. The downturn was then compounded by geopolitical tensions, including trade disputes and the war in the Middle East. Demand in China also weakened, even though the market had powered the sector’s growth over the previous decade. Flavio Cereda, an analyst at GAM, links the luxury downturn to the absence of the “feel-good factor” seen during the post-pandemic boom, when aspirational consumers were more willing to spend. “As soon as people feel they have money… they spend”, Cereda noted. So far, however, that hasn’t happened: “there’ve only been false starts”, the analyst concluded.
Several reasons combined
Cereda points to one reason for the fall in LVMH’s value: the luxury giant has become the benchmark stock for investors betting on aspirational consumer spending. Two other industry investors, contacted by the Financial Times, said hedge funds use LVMH shares to express views on sentiment across the luxury sector as a whole, amplifying swings in both directions. A third factor, according to Christopher Rossbach of J Stern & Co., an LVMH shareholder, is corporate succession, an issue that has become increasingly important to investors but that remains unresolved by the group.
Not a bad thing in the long term
Beyond improving the company’s performance, LVMH hopes its current share level, the lowest since 2020, could prove attractive to long-term investors. Short-term investors, meanwhile, are waiting for stronger results from both the group and the luxury sector as a whole, which has for some time lagged behind energy, healthcare, financial and banking stocks in terms of profitability.
Photo from the Louis Vuitton website
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