Shares in luxury conglomerate LVMH were down in early trade on Wednesday, after the company’s end-of-year report disappointed investors hoping for stronger signs of rebound from the sector bellwether.

LVMH late Tuesday reported a 1% rise in fourth-quarter sales, beating expectations, but its margin was weighed down by several non-recurring events, increased staff costs linked to LVMH’s role in the Paris 2024 Olympics and an employee share scheme.

In morning trading, LVMH shares were down 5.5% while Gucci-owner Kering was down 7.2%. Hermes, which is seen as best-placed to weather downturns thanks to a wealthier customer base, was down only slightly, by 1%.

While fourth-quarter sales from LVMH’s key fashion and leather division, home to its top earners Louis Vuitton and Dior labels, were around 2% higher than expectations, the beat was likely “not enough to call this an inflection point,” said Thomas Chauvet of Citi.

The luxury goods sector has been grappling with its slowest sales in years, falling by 2% last year, according to Bain & Company estimates, hit by a property crisis in China.

But recent expectation-beating results from firms including Cartier owner Richemont and Burberry have fuelled hopes the sector is starting the year on firmer ground.

While LVMH’s results “challenge the sector narrative that all luxury companies have seen the acceleration” seen at Richemont and Burberry, it reinforces the idea of a quicker recovery this year than expected in October, analysts at Deutsche Bank said in a note to clients.

Luxury shares, which have been volatile since the winding down of a post-pandemic boom, have risen since the start of 2025, with Richemont up 25%, LVMH up 18% and Hermes up 15%.