👉 Background: LVMH is the French luxury conglomerate that stands for Louis Vuitton Moet Hennessy, which manages more than 70 luxury brands or “maisons”, including Louis Vuitton, Dior, Givenchy, Fendi, Celine, Kenzo, TAG Heuer, and also luxury drinks like Moet, Veuve Clicquot and Hennessy.

👉 What happened: LVMH just warned that its first quarter earnings fell 22% mostly due to declining sales of their wine and spirits. It suffered a 9% drop because of weakening cognac demand. And their fashion and leather goods also fell by 5%.  

👉 What else: Next minute, investors are hitting the sell button and LVMH’s share price fell more than 8%. But LVMH’s CEO seems to think that its brands are actually still performing well… relative to the poor economy.

What's the key learning?

💡Luxury brands like LVMH don’t live quarter to quarter... they play the long game. While this latest earnings dip spooked investors, LVMH think this isn’t a sign of collapse, more of a global pause.

💡Luxury consumers aren’t abandoning luxury, they’re just being more selective. For example, during the 2008/9 GFC, the personal luxury goods market declined by 8%. But then between 2010 and 2019, the luxury market sector grew at a compound annual growth rate of about 7%.

💡In a luxury market, the smart move isn’t to chase every dip like a typical retailer... it’s to stay aspirational and wait for your customers to return when the economy comes back.