Improving LVMH champagne exports create modest upside risk for the second quarter

Overview

This report evaluates the potential impact of the latest June champagne industry data released by CIVC on LVMH's Champagne & Wines sales in 2Q26. The report points out that overall industry growth remains weak, but export markets have recently accelerated, and LVMH's exposure to export markets and premium brands is significantly higher than the industry average, creating moderate upside risk to second-quarter sales.

Core views

The core view is that the overall recovery in champagne industry volume remains weak, with only about 1% year-over-year growth in 1H26; however, improvement in export markets is more evident, with June export volume up 8% year over year and 2Q export volume up 6.3% year over year. Since LVMH's premium brands such as Veuve Clicquot, Moet & Chandon, Dom Perignon, and Ruinart are mainly oriented toward overseas markets, the company is better positioned to benefit from improved exports. However, Champagne & Wines accounts for less than 4% of group sales, so even if this division outperforms expectations, the impact at the group level would still be modest.

Analysis framework

The report uses a top-down approach combining industry volume tracking with company exposure mapping: it first analyzes champagne industry total volume, domestic French market data, and export market data published by CIVC, then combines LVMH's 2025 shipment mix, export share, and U.S. market brand share to assess what the industry data implies for the company's second-quarter sales. The valuation section uses the DCF method and references Morgan Stanley ModelWare and Refinitiv consensus data.

Methodology notes

• Industry data trackingCIVC champagne shipment data

  Use monthly industry volume and export data to infer sales momentum for the company's division

  The report focuses on tracking changes in June and second-quarter champagne sales volume, domestic French shipments, and export shipments, and matches improved exports with LVMH's high export exposure.

• Company exposure analysisMarket share and regional structure mapping

  Use LVMH's shipment mix and brand share to assess the degree of benefit

  Morgan Stanley estimates that LVMH shipped about 52 million bottles outside France in 2025 and sold about 8 million bottles in France, with export market value share of about 50%, making export acceleration more favorable to it.

• Valuation methodsDCF valuation method

  Discounted cash flow valuation

  The report states that it uses the DCF valuation method, believing it better reflects LVMH's margin potential and cash flow, and assumes a WACC of 8.8% and a terminal growth rate of 2.8%.

Asset mapping & comparison

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

• LVMH.PA

  Covered target

  Strengths

  Owns a portfolio of premium champagne brands, has high export market value share, and can benefit from export acceleration and premiumization in the industry.

  Weaknesses

  Champagne & Wines accounts for a relatively low proportion of group sales, domestic French demand remains weak, and the overall luxury consumption cycle is under pressure.

  Comparison

  Compared with the industry average, LVMH is more concentrated in export markets, and its premium brands have prominent market share in the U.S. market.

  Risks

  A slowdown in Chinese consumption, contraction in Western demand, loss of mid-tier consumers due to price increases, and operational deleveraging risk from vertical integration.

• Champagne & Wines segment

  Key business segment

  Strengths

  Benefits from improving export markets and the premiumization trend.

  Weaknesses

  Overall industry volume remains sluggish, and the French market has declined year to date.

  Comparison

  Export performance is better than the domestic French market, and LVMH's export exposure is higher than the industry.

  Risks

  Substitution from lower-priced sparkling wines such as Prosecco, rising consumer health awareness, and weak confidence suppressing celebratory consumption.

Key data

• June champagne industry total volume+3.8% YoYMeasured by bottle count, total June volume grew about 3.8% year over year.
• June champagne export volume+8% YoYExport markets were clearly stronger than domestic France, with year-to-date export volume growth of about 4%.
• 2Q26 export volume+6.3% YoY1Q26 export volume grew about 3.7% year over year, further accelerating to about 6.3% in 2Q26.
• 1H26 total industry volume+1% YoYOverall industry growth remains weak, described in the report as anemic.
• Year-to-date domestic France volume-3% YoYThe French market remains weak and, excluding the 2020 pandemic year, marks one of the weakest starts in a long time.
• LVMH 2025 champagne shipmentsabout 60 million bottlesOf this, about 52 million bottles were sold outside France and about 8 million bottles were sold in France.
• LVMH champagne export value shareabout 50%Morgan Stanley estimates LVMH's export market share at about 34% by volume and about 50% by value.
• Target price and closing price€540.00 vs €503.10The target price implies approximately 7.3% upside versus the July 16 closing price.

Impact & implications

In terms of investment implications, improving champagne exports could support LVMH's short-term sales resilience, especially in premium champagne and export markets such as the U.S. However, given weak domestic French demand, limited overall industry volume growth, and the low share of champagne and wines in group sales, the report does not interpret this as a major turning point at the group level, but rather as a modest positive catalyst for second-quarter divisional sales.

Risks

• A slowdown in Chinese luxury consumption remains the biggest downside risk for LVMH and its peers.
• If demand in Western markets continues to contract, it will weaken champagne and luxury goods sales.
• Overall champagne industry volume growth remains weak, and the domestic French market is still declining year to date in 2026.
• Premium champagne brands have raised prices substantially over the past five to six years, which may lead to the loss of mid-tier consumers.
• Lower-priced sparkling wines such as Prosecco remain resilient and are gaining share, creating substitution pressure on champagne.
• Vertical integration, especially downstream integration, may lead to operational deleveraging when demand is weak.

What to watch

• LVMH's 2Q26 results to be released on July 27, especially whether Champagne & Wines sales exceed consensus.
• Whether subsequent monthly CIVC champagne export data can sustain the acceleration seen in June.
• Whether domestic French champagne consumption stabilizes and how European consumer confidence evolves.
• Demand for premium champagne in the U.S. and the market shares of brands such as Veuve Clicquot and Moet & Chandon.
• The pace of recovery in Chinese luxury consumption and its impact on group-level growth for LVMH.