The owner of Louis Vuitton and Dior lost its position on Tuesday as Europe’s largest luxury company in terms of market capitalization after being overtaken by Hermès.

The Hennessy brand owner saw revenues decline for its drinks unit by 8% and 9% on a reported and organic basis, to €1.3bn ($1.5bn). LVMH’s wine-and-spirits division saw its first-quarter sales decline ...