LVMUY - Exit now or Be trapped forever ?
As of 10 Mar 2026, the "luxury-as-a-safe-haven" narrative is being eroded by a 2-pronged assault:
Structural fatigue in its core business.
A macroeconomic "black swan" in the Middle East.
Inflation Invasion.
The surge in Brent crude toward $120/barrel (with analysts warning of $215 if the Strait of Hormuz remains contested) is not just a pump-price issue.
It is a direct hit at the luxury supply chain. How so ?
Cost of Goods Sold (COGS) Escalation:
Luxury manufacturing is energy-intensive. From the heating of glass furnaces for Perfumes & Cosmetics to the high-frequency air-freight logistics required for LV’s weekly inventory drops, energy accounts for a significant portion of variable costs.
In my 09 Mar 2026 post, I have already explained how Energy will be the star performer in US market in 2026. Click here ! for details.
Production Rattle:
If energy prices persist at these levels, LVMUY faces a "margin squeeze" where its 22% operating margin (already down from historical highs) could contract further as production costs are filtered down the chain.
Aspirational Retreat:
Both US and Chinese "aspirational" shoppers (the $100k–$150k income bracket) are the first to drop off when the "cost of living" rises.
In 2025, US sales grew a meager 3%, while Asia (ex-Japan) slipped -2%.
This segment is the "volume" that keeps the factories running.
Without them or less of them, LVMH is left only with the ultra-rich, who cannot sustain the group's €80.8 billion revenue alone.
LVMUY 2025/2026 Financial Matrix Analysis.
Below is a surface skim of $LVMH-Moet Hennessy Louis Vuitton(LVMUY)$ latest Q4 2025 quarterly earnings, released on Tue, 27 Jan 2026.
I have to say, it is not a fairy tale ending.
Quarterly Financial overview.
Revenue: came in at EUR$ 22.7 billion (US$ 27.1 billion); beating LSEG estimates of EUR$ 22.2 billion. It is a +1.0% YoY gain vs market consensus of a -0.3% decline. QoQ, the numbers remain status quo.
Net Profit: was €10.9 billion, that’s a -13% YoY decline.
Operating Margin: Remained solid at 22%, despite being squeezed by unfavorable currency exchange rates.
Free Cash Flow: Grew by +8% to €11.3 billion, clearly showing strong cash generation.
Dividend: Proposed a stable dividend of €13 per share.
Earnings Perf. by Business Group
Based on the luxury conglomerate business structure, below is how each Business Group fared:
Watches & Jewelry: Grew by +8.0%. It was the standout performer, driven by strong demand for high jewelry at Tiffany & Co. and Bvlgari.
Selective Retailing: Grew by +7.0%. Continued momentum from Sephora, that gained market share globally, while DFS reached a break-even point. (see above)
Fashion & Leather Goods: Fell by -3.0% vs analysts’ expectations of -2.94%.; reflecting a cooling luxury market, even though Louis Vuitton and Dior maintained high profitability.
Wines & Spirits: Fell by -9.0%, heavily impacted by trade tensions & tariffs affecting Hennessy Cognac sales in China and US.
Perfumes & Cosmetics: Dipped marginally by -1.0% YoY, a ‘surprise’ dip during the peak year-end season despite steady innovation.
Full Year 2025.
Revenue: About €80 billion, roughly flat to slightly down organically vs 2024 but around double the level of a decade ago
Organic growth: Around ‑1% for the full year 2025, with +1% organic growth in H2 2025, offsetting a weaker H1 2025.
Operating profit: was EUR$ 17.8 billion, that’s a -9.3% YoY decline. It came in “better” than analysts’ forecast although margin was impacted by FX and softer demand.
Net profit (group share): About €10.9 billion, down around -13% YoY versus 2024.
Full-year profit from recurring operations was EUR $17.8 billion,
Overall Assessment.
Although LVMH reported a record €80.8 billion for the full year 2025, it is the Net Profit (Group Share) that told the real story.
Its decline of -13% decline to €10.9 billion reveals the overall health of the world’s luxury group, specifically.
Earnings per share Miss:
Forecasts expected an EPS of €15.14, but the actual came in at €10.42.
That is a massive 31.18% miss for a $291.27 billion market cap stock.
FX Parasite:
Unfavorable exchange rates (strong Euro vs weak USD & Yen) wiped out nearly €1.0 billion in profit.
Now, with the Middle East war that is causing a flight to the USD, this currency mismatch is expected to worsen throughout H1 2026.
What CEO said during earnings press conference - RECAP:
To think that this speech was made even before the world has any inkling that US attack on Iran was imminent.
CEO Bernard Arnault said that the group faced a difficult operating environment and warned 2026 is unlikely to be straightforward, telling investors LVMH would limit spending this year as a result.
Global Luxury Market.
On the whole, global luxury companies have been struggling to bounce back from a slump that followed a post-pandemic boom, with (a) cost-of-living pressures and (b) geopolitical uncertainty weighing on spending.
Brands have also suffered from a consumer backlash after steep price increases.
Like other sectors, some companies in this luxury sector have been more resilient, eg. Cartier owner $Compagnie Financiere Richemont AG(CFRUY)$ is a salient example that has bucked the trend.
In uncertain times, consumers see gold necklaces, bracelets and the like as better stores of value than trendy handbags.
Lost in Value.
Since the start of the US-Iran attack on Sat, 28 Feb 2026, LVMUY has lost -8.27% in its stock price in a mere 10 days. (see below)
Disconnect between solid execution and fading investor confidence has become the central question for LVMH.
It’s not about what’s wrong with the company.
In the face of war adversity, what Market and investors need to ask of luxury is, will there be - (1) faster growth, (2) new stories, or (3) is it time to cool off ?
Technical Analysis.
To foretell if LVMUY is going to trend lower in the near term, a look at its technical indicators of (a) Simple Moving Averages, (b) MACD and (c) RSI, will hopefully shed some light. (see below)
On 9 Mar 2026, LVMUY gained a marginal +0.34% to end the day at $117.14 /share, rising in tandem with all 3 major US indexes that started low but managed to close on a marginal “high” across the board.
Overall, where is LVMUY heading ?
Simple Moving Average (SMA).
In the short term LVMUY is expected to remain volatile as stock price is still below its 20-day SMA ($124.75), 50-day SMA ($134.58) and 200-day SMA ($126.48).
The readings reveals a stock that has not only lost its upward momentum but is now undergoing a violent structural breakdown.
Based on Mon, 9 Mar 2026 closing price, the stock is trading 6% below its 20-day SMA ($124.75) and a staggering 13% below its 50-day SMA ($134.58), confirming selling pressure is accelerating; every time the stock tries to rally, it hits a "ceiling" of investors looking to exit.
With stock price collapsed below its 200-day SMA - the "line in the sand" for institutional investors.
This means trading below this level transitions the stock from a "buy-the-dip" candidate to a "sell-the-rally" trap.
Warning - if the 50-day crosses below the 200-day in the coming days / weeks, it will trigger a "Death Cross", a classic technical signal that often precedes a multi-month bear market.
MACD.
Its MACD is exhibiting the same consistent short-term volatility:
The MACD (12, 26) is at -4.25, remaining in negative territory below the signal line ( -3.58).
Both lines are below the Zero line.
The negative divergence (-0.67) indicates that downward momentum is still active.
RSI.
TSLA’s 14-day RSI is currently at 30.28, inching toward “oversold” reading of 30 or below.
It suggests that the stock has been sold aggressively recently and is still looking for a bounce or a period of stability.
The Right Strategy - Exit Now !
The current geopolitical disaster in the Middle East, framed as a fight for "freedom" but effectively a battle over oil transit, has created a world where luxury is the furthest thing from a rational consumer's mind.
Valuation Re-Rating:
The market is no longer willing to pay a 28x P/E for a company whose net profit is shrinking by -13% and definitely more when it next report its 2026 first quarter earnings.
A move toward a "value" multiple of 18x–20x would put LVMUY share price in the $95–$100 range.
Spending Limits:
Group CEO, Bernard Arnault himself warned that LVMH will "limit spending" in 2026.
When the most aggressive acquirer in luxury starts hoarding cash, it is a signal to investors to do the same.
End of Hypergrowth:
LVMUY’s golden period of 2021-2022 post-pandemic boom was an anomaly.
The company has entered the "digestion" phase, which is now being violently interrupted by war-induced inflation.
My viewpoints: (mine only)
I think it will be ‘unwise’ for LVMUY to continue to pin its hope on China’s consumers return in 2026.
This is because the Chinese economy is not doing that well. (see above)
Weak (?) Chinese Economy.
Despite the 2025 trade obstacles by the Trump administration, China managed to grow its economy with a trade surplus of $213.6 billion, that far exceeded the $169.21 billion recorded in the same period last year.
However, for 2026 revised downwards growth target to a range of 4.5%-5% for 2026, down from last year's 5%, that was met largely through a +20% surge in its trade surplus.
It is also the first time, in a long time (since 1991) that China has forecasted an ‘around or below” 5% growth rate. All is not well with the Chinese economy.
Russian Oil - Trump govt U-turn.
As a precaution over a protracted fight with Iran that is already wrecking havoc in world’s economies, the Trump administration has “suddenly” made a U-turn and permitted India to buy oil “conditionally” from Russia for a month. (see below)
This, after kicking up such a fuss over India when the latter, continued to purchase large quantities of Russian oil in 2025.
US Shipping Assurance.
In an attempt to contain oil price from spiking further, the Trump government has introduced a $20 billion government-backed reinsurance facility for vessels to transit the Strait of Hormuz.
The program was announced by US International Development Finance Corporation (DFC), that said the facility will insure losses of up to $20 billion “on a rolling basis”. Coverage will apply only to vessels “that meet the criteria” and as usual, did not provide the criteria (in details).
None of the world’s major container lines (eg. Maersk, CMA CGM, and Hapag-Lloyd) has taken up the offer because the reinsurance only covers the cost of a lost ship or cargo.
It does not mitigate the threat of Iranian drone swarms or precision missiles.
Looks like another failed attempt to stem out fears & uncertainty in the ongoing unnecessary conflict.
LVMUY finds itself in a technical "No Man’s Land" currently, having breached key support levels without a clear floor in sight.
Investors should expect continued volatility from LVMUY, with a high probability of the price testing the $105–$110 range before any meaningful consolidation or price discovery occurs.
In these trying times, the most prudent strategy for investors with paper gains is a tactical exit to preserve capital.
Intensifying "inflation invasion", fueled by the Middle East energy crisis, is expected to act as a persistent headwind, keeping the global luxury market under significant pressure for the remainder of 2026.
The risk-to-reward ratio for LVMUY remains skewed to the downside, until the geopolitical climate stabilizes and oil-driven production costs subside. Agree ?
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Do you think US-Iran war will end soon or will it worsen & continue to spillover more & more, into neighbouring countries ’?
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Will it be the same when trading resumes on US Exchange ? Investors with paper gain in LVMUY, do consider if its time to dollar cost average or exit ?
Will CPI for Jan 2026 helps to lift or drag LVMUY ?
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