LVMH's fourth-quarter fashion and leather goods business sales show weakness, indicating continued pressure on luxury goods companies.

Sales of key fashion businesses under LVMH declined during the holiday season, indicating that the parent company of Louis Vuitton is still facing pressure from weak demand. LVMH said in a statement on Tuesday that organic sales in the fashion and leather goods division fell by 3% in the fourth quarter. Analysts had previously forecast a decrease of 2.94%. Following the statement, LVMH's American depositary receipts traded in New York fell by 1%. CEO Bernard Arnault said the group is facing a challenging operating environment and warned that 2026 is unlikely to be smooth sailing. He told investors that LVMH will therefore limit spending this year. Luxury companies have struggled to rebound from the slump following the post-pandemic boom, as cost of living pressures and geopolitical uncertainties weigh on expenditures. Additionally, significant price increases have sparked consumer discontent. In the fourth quarter, organic sales in the US and regions including China grew by 1%, exceeding analysts' expectations. The declines of 2% in Europe and 5% in Japan were larger than expected. LVMH reported annual recurring operating profits of 17.8 billion euros, a 9.3% decrease year-on-year but better than analysts' expectations.