Following today’s release of LVMH’s figures for the six months ending 30 June 2025; Pippa Stephens, senior apparel analyst at GlobalData, a leading data and analytics company, offers her view: “LVMH, alongside the wider luxury sector, continues to stumble as aspirational shoppers remain hesitant to spend on luxury goods amid a challenging economic environment. The group’s sales decline worsened in Q2 FY2025, falling 7.1%, following a decrease of 1.9% in the prior quarter, leading the first half of the year to witness a notable drop of 4.5% to reach €39.8bn, while organic revenue fell 3%. Net profit also slumped, falling a significant 21.6%, as macroeconomic and geopolitical troubles, including trade tensions in the US and China, keep increasing costs across the industry. Despite this, LVMH remains positive in its outlook for the rest of the year, focussing on enhancing the desirability of its brands and showcasing the high quality of its products to reignite consumer interest.
“The slowdown in Q2 was primarily driven by the group’s performance in Japan, where organic revenue plummeted 28%, causing the first half of the year to fall 15%. However, this was largely due to unusually high sales growth in the country last year, with Q2 and H1 rising 57% and 44%, respectively, when the weak Yen drove stronger tourist demand. The rest of Asia also struggled in H1, falling 9%, on top of a 10% decline in FY2024. This is partly due to trade tensions weighing on consumers in China, and while the country’s economy has been improving, many Chinese shoppers are also still refraining from buying luxury goods as the government cracks down on those showing off their wealth on social media by blocking their accounts. The US saw a marginal decline of 1%, with US consumers staying cautious about their spending due to the new tariffs, while Europe grew by 1%, as inflation largely stabilised across the region supporting consumer sentiment.
“The group’s Fashion & Leather Goods and Wines & Spirits divisions experienced the largest downturns, with their reported revenues for H1 falling 8.0% and 7.8%, respectively, with the former category hindered by young consumers shifting to more trendy luxury brands such as Prada and Miu Miu. With both Dior and Loewe appointing new creative directors this year, there is hope that LVMH will be able to further bolster the desirability of these brands and contribute to the division’s recovery. Weak demand for cognac continues to impact Wines & Spirits, as well as consumer uncertainty in the US and China due to trade tensions. While both Perfume & Cosmetics and Watches & Jewellery fell 1.3% and 1.2%, respectively, Selective Retailing, which comprises Sephora and DFS airport stores, remained relatively flat. This was largely driven by Sephora, which has been capitalising on the resilience of the health & beauty market through its store expansion strategy and product differentiation.”
