LVMH Wines & Spirits remains under pressure: global champagne sales fell again in May, while exports saw a slight recovery

Overview

This report evaluates the implications for LVMH of the CIVC's May 2026 champagne industry data. Global champagne sales continued to decline YoY in May, though export markets posted slight growth; domestic demand in France remained weak, with sales down 3% year-to-date. The report argues that champagne consumption is being affected by changing drinking habits, weak consumer confidence, competition from substitutes such as Prosecco, and several years of price increases that have squeezed mid-range consumers. Thanks to its higher share in export markets and premium champagne brands, LVMH benefits from industry premiumization, but its Wines & Spirits division still faces downside earnings risk.

Core views

The core view is that demand in the champagne industry has not yet stabilized, with domestic France particularly weak; modest export growth provides some support for LVMH, but not enough to fully offset overall volume contraction and pressure on mid-range consumption. Morgan Stanley's current forecast for LVMH Wines & Spirits 2026 operating profit is below consensus, and it believes risks are skewed to the downside.

Analysis framework

The report mainly uses CIVC monthly shipment data to compare YoY and year-to-date trends across three dimensions: global, exports, and domestic France; it then combines LVMH's share in champagne exports and premium brands, changes in consumer behavior, substitute competition, price-band shifts, and DCF valuation assumptions to assess business earnings risk.

Methodology notes

• Industry high-frequency dataCIVC champagne sales data

  Track YoY and year-to-date changes in champagne shipments across global, export, and domestic France measures.

  The report uses CIVC's May industry data to judge demand trends, focusing on total sales, export sales, and domestic France sales.

• Valuation methodDCF valuation

  Use discounted cash flow to reflect LVMH's margin potential and cash flow.

  Valuation assumptions include WACC of 8.8% and a terminal growth rate of 2.8%.

• Consensus comparisonVA Consensus comparison

  Compare Morgan Stanley's model with market consensus expectations.

  Morgan Stanley forecasts LVMH Wines & Spirits 2026 operating profit at €943m, below the VA Consensus of €973m.

• Demand structure analysisIWSR and consumer behavior framework

  Analyze the impact of drinking habits, consumer confidence, substitutes, and price-band migration on champagne demand.

  The report argues that reduced drinking among younger consumers, weak confidence among European consumers, competition from lower-priced substitutes such as Prosecco, and sharp price increases by major champagne brands over the past five to six years have together suppressed mid-range demand.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• LVMH Moet Hennessy Louis Vuitton SA (LVMH.PA)

  A dominant player in the champagne export market, with its Wines & Spirits business directly affected by champagne industry sales trends.

  Strengths

  About 35% by volume and about 50% by value in the champagne export market; owns premium brands such as Dom Perignon and Ruinart, benefiting from industry premiumization and overseas sales of premium brands.

  Weaknesses

  Total champagne sales and domestic France sales are still declining, and the 2026 operating profit forecast for the Wines & Spirits division is below consensus expectations.

  Comparison

  Morgan Stanley forecasts the division's 2026 operating profit at €943m, below the VA Consensus of €973m, indicating its model is more cautious than market consensus.

  Risks

  A slowdown in Chinese luxury consumption, contraction in Western demand, consumers shifting to lower-priced sparkling wine, price increases squeezing out mid-range consumers, and operating deleveraging from vertically integrated operations.

Key data

• Global champagne sales in May 2026-1% YoYMeasured by bottle volume, continuing to contract after a 5.4% YoY decline in May 2025.
• Champagne export sales in May 2026+1% YoYExport markets are up 3% by volume year-to-date.
• Domestic France champagne sales in May 2026-4% YoYApril was down 6% YoY; domestic France demand remains weak.
• France sales year-to-date in 2026-3%The report says this is the weakest start to a year in a long time, excluding the pandemic-affected year of 2020.
• Full-year 2025 champagne shipments266m bottlesDown 2% from 271.4m bottles in 2024, marking the third consecutive annual decline.
• 2025 champagne industry revenue€5.17bnGenerated in aggregate by champagne houses.
• 2025 regional breakdownFrance -4%; Exports -1%Both domestic France and exports weighed on full-year shipments.
• LVMH champagne export market shareabout 35% by volume; about 50% by valueThe report estimates LVMH dominates the export market, with a high share of overseas sales from premium brands.
• LVMH Wines & Spirits 2026 operating profit forecast€943mMorgan Stanley's model forecasts a 7% YoY decline.
• 2026 VA Consensus comparison€973mMorgan Stanley's forecast is below consensus and it believes downside risk is greater.
• Core DCF assumptionsWACC 8.8%; terminal growth rate 2.8%The report says the DCF method best reflects LVMH's margin potential and cash flow.

Impact & implications

For LVMH, volume contraction in the champagne industry will continue to pressure revenue and profit expectations for the Wines & Spirits division, especially against a backdrop of weak domestic France demand, soft consumer confidence, and mid-range consumers being priced out. Growth in export markets and the premiumization trend help LVMH because it has a high share in premium champagne and export value share; however, at this stage these positives are more of a partial offset than a clear signal of reversal.

Risks

• Slower Chinese consumer spending remains the main downside risk for LVMH and its peers.
• If demand in Western markets continues to contract, it will further pressure champagne and high-end consumer goods sales.
• Young consumers are drinking less overall and paying more attention to health, which may create structural demand pressure.
• Weak consumer confidence in markets such as Europe may weigh on champagne consumption associated with mood and celebratory occasions.
• Lower-priced sparkling wine substitutes such as Prosecco are gaining share and may continue to divert demand from champagne.
• Major champagne brands have raised prices sharply over the past five to six years, potentially excluding mid-range consumers.
• Downstream-focused vertical integration may lead to operating deleveraging.

What to watch

• Whether subsequent monthly CIVC champagne sales shift from YoY decline to stabilization.
• Whether the year-to-date 3% growth momentum in export sales can continue.
• Whether domestic France sales will remain weaker than global and export markets.
• Whether LVMH Wines & Spirits 2026 operating profit trends toward €943m or the VA Consensus of €973m.
• Whether Chinese luxury consumption accelerates beyond expectations or continues to slow.
• Whether demand in Western markets continues to contract over the next year.
• Whether premiumization can offset the loss of mid-range consumers and competition from lower-priced substitutes.