Core Viewpoint - LVMH's cognac maker Hennessy has reached a pay deal with unions to compensate for bonuses lost last year due to weak sales [1] Company Summary - Hennessy is the largest brand within LVMH's drink portfolio [1] - The pay deal addresses the financial impact of last year's weak sales on employee bonuses [1] Industry Summary - The agreement reflects ongoing challenges in the beverage industry, particularly in the premium spirits segment, where sales fluctuations can significantly affect employee compensation [1]

Core Insights - LVMH's wine-and-spirits sales experienced a 9% decrease in organic revenue for Q4 2025, contributing to an annual decline of 5% [1][2] - The wine-and-spirits division, which includes brands like Glenmorangie and Belvedere, reported a 9% drop in revenue to €5.36 billion ($6.41 billion) and a 25% decline in profit from recurring operations to €1.02 billion [2] - The Champagne business showed resilience, maintaining a market share of 22% in Champagne-appellation shipments despite a global decline in Champagne sales volumes for the third consecutive year [3] - Hennessy cognac sales were negatively impacted by weaker local demand, attributed to customs duty issues in China and the US, while Provence rosé wines continued to outperform their category [4] - Overall group revenue for LVMH fell 5% to €80.81 billion, with a 1% decline on an organic basis [4]

Core Insights - Bernard Arnault has significantly increased his stake in LVMH, purchasing approximately ₹1.4 billion ($1.6 billion) worth of shares over eight months, bringing his family's ownership closer to half of the company [1][8] - The buying spree occurred during a period of weaker quarterly results for LVMH, yet the stock has rebounded following a return to sales growth [5][8] - Arnault's strategy emphasizes maintaining wealth within LVMH rather than diversifying into other investments [1][8] Share Purchase Details - Arnault acquired around 2.5 million shares, representing about 0.5% of LVMH, at an average price of ₹566 per share, with some shares purchased as low as ₹448 in June [5][9] - The total volume of shares purchased this year far exceeded previous years, indicating a strong commitment to LVMH despite recent performance challenges [5][9] Ownership and Control - Arnault's stake in LVMH accounts for 49% of the capital and nearly 65% of the voting rights, reflecting his desire to secure an "absolute majority" [6][9] - The family has a history of consolidating control over LVMH, including a pivotal deal in 2017 to buy out minority shareholders of Christian Dior, increasing their stake significantly [9] Investment Strategy - Analysts suggest that Arnault's substantial investment in LVMH may have been better allocated towards diversification, as his non-LVMH investments are estimated at only ₹4 billion [6][9] - Financiere Agache, Arnault's holding company, remains focused on luxury investments while also having a portfolio of diversified financial investments [7][9]