Hermès continues to thrive, benefiting from its ultra-luxury positioning and a strict production strategy that limits annual increases to 6-7%, which has contributed to its stability in fluctuating markets.

In 2024, LVMH reported impressive sales of €85 billion and an operating profit of €20 billion, while Hermès achieved over €15 billion in sales with operating profits exceeding €6 billion.

As the luxury sector faces uncertainty in 2025, analysts are closely monitoring how brands like LVMH and Hermès adjust to ongoing market challenges.

LVMH shares experienced a significant decline of 7.8% on April 15, 2025, following a surprising 3% drop in first-quarter sales, resulting in the company losing its title as the world's most valuable luxury brand to Hermès.

Analysts attribute LVMH's recent decline to weakening demand in key markets such as China and the U.S., compounded by uncertainties surrounding trade tariffs.

Cécile Cabanis, LVMH's CFO, acknowledged the ongoing macroeconomic uncertainties and the potential impact of tariffs on their aspirational clientele during a call with analysts.

Analyst Jelena Sokolova highlighted Hermès' resilience in uncertain market conditions, noting that the brand appeals to consumers seeking quality and security, contrasting sharply with LVMH's more cyclical nature.

Bernard Arnault, LVMH's CEO, has not secured special exemptions from U.S. tariffs, despite his long-standing relationship with former President Donald Trump.

Despite luxury brands typically being more resilient to tariff impacts, analysts warn that economic downturns could suppress demand, particularly in the U.S. and China.

This shift in market leadership underscores the contrasting fortunes of LVMH and Hermès amid a challenging economic landscape, reflecting evolving consumer behavior and investor sentiment.

In contrast, LVMH's broader exposure to lower-end luxury products may hinder its ability to navigate current market challenges effectively.

This historic moment marks a significant change from LVMH's attempted acquisition of Hermès in 2010, highlighting the evolving dynamics within the luxury market.