Editor’s Note
This analysis examines LVMH’s 2025 results, highlighting a persistent slowdown in its core Fashion & Leather Goods division. The trend underscores a shifting landscape for luxury retail, where the post-pandemic surge in tourism demand has faded, leaving brands to navigate a more normalized—and challenging—global market.
On January 27 (local time), the French luxury conglomerate LVMH Moët Hennessy Louis Vuitton announced its full-year 2025 financial results. Amid ongoing geopolitical risks and an unstable macroeconomic environment, the group maintained solid overall performance, while the slowdown in growth of its largest revenue source, the Fashion & Leather Goods division, became clear once again.
Revenue for 2025 was €80.8 billion, down 5% year-on-year and down 1% on an organic basis. The organic growth rate for the fourth quarter was 1%, remaining at the same level as the third quarter. Although signs of improvement were seen in the second half, the pace of recovery was limited.
Recurring operating profit was €17.8 billion with an operating margin of 22%. Despite being affected by currency fluctuations, it remained at a high level. Group net profit attributable to shareholders was €10.9 billion, and free cash flow was €11.3 billion, an 8% increase from the previous year.
Looking at the divisions, the group’s largest revenue source, Fashion & Leather Goods, saw a revenue decline in 2025. In 2024, tourist demand, particularly boosted by consumption expansion in the Japanese market against the backdrop of a weak yen, had lifted performance, but in 2025, the reversal of this trend became apparent.
Recurring operating profit decreased by 13% due to currency effects, but the operating margin remained at an extremely high level of 35%. This result demonstrates that brand power, which does not rely on price competition, and the high-value-added model continue to function effectively.
Louis Vuitton demonstrated strong appeal in both product and storytelling through collections by Nicolas Ghesquière and Pharrell Williams.
Furthermore, the launch of La Beauté Louis Vuitton led by Pat McGrath and the 24 trophy trunks created as the official F1 partner strongly impressed the fusion of craftsmanship and modern luxury.
Christian Dior embarked on a new chapter by welcoming Jonathan Anderson as Creative Director for Haute Couture, Men’s, and Women’s. The first show garnered record attention, and along with new store openings in New York, Los Angeles, and Beijing, it has further enhanced the brand’s international presence.
Revenue for the Wines & Spirits division decreased by 5% year-on-year on an organic basis, and recurring operating profit decreased by 25%. Following several years of exceptional growth, the demand slowdown observed since 2023 continued into 2025.
Tariff issues and trade frictions, particularly in China and the United States, weighed down demand for cognac, centered on Hennessy. On the other hand, the champagne business continued to maintain high competitiveness, with LVMH’s Maisons securing a 22% market share of Champagne AOC shipments. Provençal rosé wines also outperformed the global rosé category as a whole.
Each Maison continues to invest in enhancing the long-term value of their brands, unaffected by short-term market conditions, while also advancing structural reform programs aimed at improving efficiency and reducing costs.
Revenue for the Perfumes & Cosmetics division was flat on an organic basis, but recurring operating profit increased by 8%, improving the operating margin to 8.9%. The strategy focusing on innovation and selective retailing, rather than mass expansion, proved successful.
Parfums Christian Dior maintained the position of “Sauvage” as the world’s largest men’s fragrance, in addition to the success of “Miss Dior Essence” and “Dior Homme”. Guerlain and Givenchy also achieved stable results through expansion strategies centered on existing icons.
The Watches & Jewelry division recorded 3% organic growth in 2025. Tiffany & Co. simultaneously advanced store renovations and strengthened iconic collections, with “HardWear”, “Knot”, and “Bird on a Rock” performing well. The high jewelry “Blue Book” collection achieved unprecedented results.
Bvlgari developed immersive exhibitions centered on “Serpenti”, and the “Polychroma” collection achieved record sales of high-value pieces. Chaumet and TAG Heuer also strengthened their brand value through their respective iconic lines and event exposure.
The Selective Retailing division grew 4% in organic sales, with recurring operating profit increasing by 28%. The driving force was Sephora, which continued to expand both sales and profit, solidifying its position as the global leader in beauty retail.
In addition to investments in omnichannel strategy and the opening of approximately 100 new stores, the introduction of new brands was successful. DFS improved profitability through business efficiency enhancements, and the restructuring of its Greater China business is positioned as a strategic turning point.
In response to these results, Chairman and CEO Bernard Arnault commented on the outlook for 2026:
He further emphasized that LVMH, as a family group that values entrepreneurship, will continue to pursue sustainable creativity from a long-term perspective, unaffected by short-term performance fluctuations. The group intends to continue polishing the value of its brands through high-quality products, exceptional spatial experiences, and the transmission of craftsmanship to the future.
