Editor’s Note
The following article examines LVMH’s 2025 financial results, highlighting a challenging year for the luxury conglomerate. While overall revenue and profit declined, the performance across its diverse portfolio of brands and business segments was notably mixed. This analysis delves into the pressures and divergences shaping the current luxury landscape.
LVMH Group’s 2025 financial report presents a complex picture: overall performance is under pressure, but the performance of different business segments varies significantly.
Overall, the luxury giant has not yet returned to a growth trajectory. For the full year 2025, LVMH’s total revenue was 80.807 billion euros, a year-on-year decrease of 5% compared to 84.683 billion euros in 2024. Recurring operating profit fell by 9% to 17.75 billion euros, and net profit dropped by 13% to 10.88 billion euros. This set of data undoubtedly conveys the challenges facing the luxury goods industry.
However, a deeper analysis of the performance of different business segments reveals structural highlights hidden behind the overall decline. The Fashion & Leather Goods division (including Louis Vuitton and Dior), the group’s largest revenue source, saw full-year organic revenue decline by 5% to 37.77 billion euros, with recurring operating profit down 13% year-on-year.
In contrast, the Watches & Jewelry division performed more brightly. In the fourth quarter of 2025, the division’s revenue increased by 32.7% sequentially; full-year organic revenue grew by 3%, and recurring operating profit only slightly decreased by about 2%.
The Wines & Spirits division was the segment hit harder in 2025. Affected by factors such as exchange rate fluctuations and slowing demand, the division’s performance declined significantly. Full-year 2025 revenue was 5.358 billion euros, an organic decrease of 5% year-on-year, and recurring operating profit fell sharply by 25% to 1.016 billion euros, becoming the main reason for dragging down the group’s overall performance.
The Perfumes & Cosmetics division remained stable, with recurring operating profit of 727 million euros, an increase of 8% compared to 2024, and the operating margin improved to 8.9%. The group emphasized that new products from brands such as Dior and Guerlain drove the improvement in profitability.
The Selective Retailing division, which includes Sephora and DFS, continued to outperform expectations, with organic revenue growth of 4% in 2025 and recurring operating profit surging by 28%. Sephora continued to expand its global market share, with revenue and profits continuing to grow.
An important signal conveyed in the financial report is the attitude of LVMH’s management towards the Chinese market.
LVMH Group stated in its financial report that the Sephora brand will adopt a new strategy in 2026, with the launch of multiple exclusive brands and store upgrades as core highlights. In January 2026, DFS signed an agreement with China Duty Free Group (CDFG), with the latter acquiring DFS’s business in Greater China, particularly the Gallerias duty-free shopping malls located in Hong Kong and Macau, China.
On January 19, CDFG announced that its wholly-owned subsidiary, CDF International Limited, signed a “Framework Agreement” with a company under LVMH, stipulating that CDF International would acquire equity and assets related to DFS’s Greater China travel retail business for no more than $395 million in cash. This includes a 100% stake in DFS Cotai Limitada and related assets of two stores held by DFS Hong Kong, as well as intangible assets of DFS Greater China.
This acquisition is seen as an important step in LVMH’s layout in the Chinese market, aiming to seize opportunities brought by the return of Chinese consumers and the benefits of duty-free policies.
Furthermore, facing a complex market environment, LVMH is responding to challenges through a strategy adjustment that combines premiumization and diversification.
The financial report specifically affirmed the performance of the top Italian luxury brand Loro Piana. On July 31, 2025, LVMH Group acquired a 9% stake held by minority shareholders for 1 billion euros, increasing its shareholding in Loro Piana to 94%, reflecting LVMH’s emphasis on the high-end segment.
In terms of diversification, LVMH is striving to reduce its excessive reliance on the Fashion & Leather Goods business by developing segments such as Selective Retailing and Beauty to “fill the gap.”
Sephora’s strong performance also became a major highlight of the 2025 financial report. In 2025, Sephora continued to invest in its omnichannel strategy and expand its retail network, opening approximately one hundred new stores throughout the year. Growth was particularly strong in Europe, the Middle East, and Latin America, and North American business also continued to grow.
Sephora will focus its strategic priorities on further differentiating its product and service portfolio (especially in the makeup field), while striving to enhance customer loyalty and in-store experience.
Despite this, LVMH still maintains the capability and resources to respond to market challenges. The group’s operating free cash flow grew by 8%, exceeding 11 billion euros, which means LVMH still has ample “ammunition” and can maintain the determination for its long-term strategy.