LVMH Q2 2025 Net Profit Falls 22% Amid Fashion and Leather Goods Woes

LVMH's H1 2025 net profit fell 22% due to a 9% drop in organic sales in the fashion and leather goods division, missing forecasts. Group revenues fell 7% to €19.50 billion. Wines and spirits, together with fashion and leather goods, were the two segments with the biggest declines in operating profit. Despite this, net profit exceeded analysts' forecasts.

LVMH Moët Hennessy Louis Vuitton (LVMH), the global luxury goods giant, reported a decline in profit and revenues for the first half of 2025. The company's net profit dropped by 22% to €5.698 billion compared to €7.267 billion in the same period last year. Revenue fell by 4% to €39.810 billion from €41.677 billion in 2024 [1].

The fashion and leather goods division, which accounts for a significant portion of LVMH's profits, saw a 9% drop in organic sales. This segment's operating profit declined by 8% to €19.115 billion. The wines and spirits segment also experienced a decrease of 8% in revenue to €2.588 billion, while the perfumes and cosmetics segment saw a 1% drop to €4.082 billion. The watch and jewelry segment slipped by 1% to €5.090 billion [1].

Despite these declines, LVMH's net profit exceeded analysts' forecasts. The company's Chief Executive Officer, Bernard Arnault, attributed the resilience to the power of the group's iconic brands and their capacity for innovation while maintaining artisanal craftsmanship. He expressed confidence in the long-term vision that has guided LVMH, despite current uncertainties [1].

The company's CFO, Cecile Cabanis, remained optimistic about the second half of the year, expecting trade talks between the EU and the Trump administration to deliver positive outcomes. She noted that LVMH's brands could mitigate potential tariff impacts through pricing power, except for wines and spirits where customers are less price-sensitive [2][3].

The luxury sector as a whole is facing challenges due to consumer fatigue, inflation, and unresolved trade disputes. Consultancy Bain expects luxury goods sales worldwide to fall between 2% and 5% this year after a 1% drop last year [3].

References:
[1] https://www.rttnews.com/3557243/lvmh-h1-profit-revenues-drop.aspx?type=ern
[2] https://www.reuters.com/world/china/lvmh-sales-weaker-than-expected-luxury-sector-awaits-us-trade-deal-2025-07-24/
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L6N3TL0T0:0-lvmh-sales-weaker-than-expected-as-luxury-sector-awaits-us-trade-deal/