LVMH H1 Revenue Miss Shows Weakness in Luxury Retail

Luxury retailer LVMH on Thursday (July 24) reported a decline in overall business performance in the first half of the year, mainly due to weakness in Asia. Earnings fell 22% from a year ago.

The French conglomerate cited macroeconomic factors such as currency fluctuations, decreased tourist traffic, and comparisons to stronger year-ago performance for the lackluster performance, particularly in Japan.

Asked during an earnings call whether the maker of luxury brands including Louis Vuitton and Dior was pricing its goods too high since less expensive brands like Coach were seeing higher sales, Chief Financial Officer Cécile Cabanis said the retailer’s philosophy is to continually elevate its brands.

“We are not Coca-Cola,” she said.

Cabanis acknowledged that long-standing luxury brands need to reach out to younger consumers who might not have the same deep pockets as older customers. But the strategy for LVMH is not deep discounting.

“We refuse to do that with cheap bags,” Cabanis said.

Instead, the company strategy is to offer luxury goods that are by nature less expensive, such as perfumes, smaller bags and other accessories.

Meanwhile, sales in Europe and the U.S. in the first half were “flat,” Cabanis said.

Tariffs were much less a topic of conversation this time around compared to the last earnings call in April.

Still, LVMH sees headwinds going forward. “Macro is still full of uncertainty,” Cabanis said. However, “we continue to work on [managing] costs.” She said LVMH’s approach to cost-cutting is through improving efficiency rather than layoffs.

In the first half of 2025, LVMH reported a 4% decline in global revenue to 39.8 billion euros ($46.9 billion) and net profit fell by 22% to 5.7 billion euros ($6.7 billion). Organic revenue was down 3% for the conglomerate while profits from recurring operations fell 15% year over year.

“The start of the year has been disrupted by several layers of micro uncertainties, as you are well aware, as well as currency swings impacting short term performance,” Cabanis said.

The CFO cited resilient local demand in Europe and the United States and sequential improvement in mainland China in the second quarter, which was not enough to offset weakness in Japan.

LVMH attributed much of weakness to foreign exchange fluctuations that discouraged travel shopping by American and Chinese consumers — especially in Japan, which had recorded “abnormal” growth of 57% in the same period last year as a result of a weaker yen.

“We saw very abrupt currency swings in Q2 which eroded the purchases of American and Chinese consumers abroad and especially in Japan,” Cabanis said.

Global luxury industry in 2025 faces its “most far-reaching disruptions” and its “biggest potential setbacks” in at least 15 years due to economic turbulence and complex social and cultural shifts, according to a Bain & Co. blog post.

Luxury spending is “historically sensitive to uncertainty” like economic and geopolitical upheavals and turbulence may go on for an extended period, according to Bain. The last such slowdown for luxury goods was during the 2008 financial crisis.

See also: LVMH Deploys AI Tools Across Operation, Seeking Efficiency and Customer Retention

Fashion and leather goods, LVMH’s largest division, posted 19.1 billion euros ($22.5 billion) in revenue, down 7% on an organic basis. Operating profit fell 18% to 6.6 billion euros ($7.8 billion).

Louis Vuitton saw continued momentum through new product innovations, retail openings — including a high-profile experiential space in Shanghai — and its move into cosmetics. Louis Vuitton has launched a new cosmetics segment, with sales set to begin in the fall.

Christian Dior began a new creative chapter with Jonathan Anderson taking over design for both men’s and women’s collections. His debut men’s show reached more than 1 billion views online. Other divisions such as Celine, Givenchy, Loewe and Fendi also saw creative leadership changes and product launches.

Despite this, volume declines due to reduced tourist traffic weighed on overall performance. Cabanis said the company remains “very committed to maintaining a high level of margin” in the segment.

LVMH’s Selective Retailing division was the only one showing positive revenue gains in the period, driven by Sephora. Revenue rose 2% organically to 8.6 billion euros ($10.1 billion), with profit increasing 12% to 876 million euros ($1 billion). It was the sole profitable division.

Cabanis said Sephora continues to execute well by focusing on high-quality brands and experiences. It is gaining market share in its physical stores while managing costs “very well.”

Asked about LVMH’s outlook for the rest of the year, Cabanis said it’s tough to forecast because many factors are out of the company’s control.

“We are not going to give a precise number because, given the macro [environment], it will probably be wrong,” the CFO said.

Read more:

Report: LVMH Tells Analysts Demand Remains Weak in Luxury Sector

Luxury’s Lost Luster: Brands Grapple With Shifting Tastes, Economic Headwinds

Sephora, Retail Division Drive LVMH’s Q4 Performance Amid Luxury Market Headwinds

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