A bottle of champagne has a subtly revealing quality that no one bothers to open. For over ten years, LVMH based its brand on the idea that the pursuit of luxury can only go in one direction: upward. Since 2023, that assumption has been put to the test numerous times, and the company’s most recent findings indicate that the test is still ongoing.
The figures present a clear picture. LVMH’s revenue at the end of 2025 was about €80.8 billion, a 5% decrease from the previous year, while its profit from recurring operations dropped 9% to €17.8 billion. Operating profit fell by a quarter for the group’s smallest revenue-generating division, wines and spirits, which has historically been one of its most profitable. Industry data shows that in just the first half of 2024, champagne shipments had already decreased by over 15%. It’s the kind of decline that develops gradually, like a hangover that no one wants to acknowledge, rather than appearing in a single bad quarter.
It’s not just the decline in sales that is noteworthy. Who stopped purchasing, and why? Executives at LVMH have identified a declining “aspirational customer”—the upper-middle-class consumer who once went above and beyond to purchase a bottle of Dom Pérignon or a Louis Vuitton purse as a little self-indulgence. Due to pressure from US and European inflation, that customer has made significant withdrawals. The real elite, on the other hand, have not disappeared, but they have become more discriminating, more regional, and noticeably less interested in champagne as a celebration symbol.
The champagne slump in particular seems to convey a message that the balance sheet is unable to adequately convey. Last year, CFO Jean-Jacques Guiony acknowledged this, questioning out loud whether economic and geopolitical concerns were merely stifling the desire to rejoice. It’s odd to hear a luxury executive admit that the numbers may be driven more by mood than by money. As this develops, it’s difficult to avoid considering champagne as a sort of emotional gauge for the affluent world, which right now reads somewhere between cautious and depressing.
A similar tale is told by Cognac, which is being pulled down by declining demand in China, where Hennessy is now more difficult to sell due to customs issues and a slower economy. The next ten years of luxury were expected to be driven by China. Rather, it is now one of the more erratic factors in LVMH’s projections, along with tariff disputes and currency fluctuations that reduced reported earnings by billions.
The group’s largest and most lucrative division, fashion and leather goods, fared better thanks to strong local spending in places like the US and Japan. Strangely, Sephora emerged as one of the bright spots, reporting double-digit profit growth while champagne stagnated. It serves as a reminder that there are multiple “luxury” markets, each of which is growing at a different rate and not all of which are slowing down at the same rate.
In response, Arnault has refused to discount, just like old-money empires typically do. Prices for high-end jewelry and Vuitton bags continued to rise despite a decline in sales, suggesting that exclusivity and scarcity are more important than immediate profits. It’s still unclear if that’s prudent discipline or stubbornness disguised as strategy. Once inflation starts to decline, the aspirational customer might return. Alternatively, they may have just learned to live without the bottle of Veuve Clicquot they used to buy mindlessly.
