Editor’s Note
This article discusses LVMH’s 2025 financial results, highlighting a challenging year for the luxury giant with declines in revenue and profit. The figures cited are based on the company’s reported data.
The world’s largest luxury goods conglomerate, LVMH, released its financial report for the period ending December 31, 2025, revealing that it has not escaped the impact of the industry’s cyclical downturn, with performance continuing to face pressure. Compared to 2024’s total revenue, which saw a weak growth of 1%, 2025 revenue declined by 5% year-on-year to 80.8 billion euros. Operating profit fell by 9% year-on-year to 17.755 billion euros, and net profit dropped by 13% year-on-year to 10.878 billion euros. This was primarily due to the underperformance of the group’s largest revenue source, the Fashion & Leather Goods division (including Louis Vuitton, Dior, etc.). However, the group indicated that although the recovery in the Chinese mainland market has been slow, overall consumption by Chinese clients (including overseas) has shown positive trends.
The last quarter of 2025 coincided with the holiday season in Europe and the US, yet the group’s revenue fell by 5.1% year-on-year to 22.72 billion euros. Organic revenue grew by 1%, with the growth rate leveling off compared to the third quarter, achieving growth for the second consecutive quarter after two consecutive quarters of decline. The Fashion & Leather Goods division failed to break out of weak demand during the key holiday season, with organic sales declining by 3% year-on-year, a larger drop than the third quarter’s -2%. The Perfumes & Cosmetics division could not sustain the previous 2% growth, declining by 1% in the fourth quarter. The Watches & Jewelry division and the Selective Retailing division (including DFS and Sephora) performed well, with organic revenue growing by 8% and 7% respectively in the fourth quarter, exceeding market expectations. The Wines & Spirits division saw organic revenue decline by 9% year-on-year.
For the full year 2025, segmented by department, the core Fashion & Leather Goods division revenue fell by 8% year-on-year to 37.77 billion euros. The Watches & Jewelry division (Tiffany & Co., Bulgari, etc.) revenue declined slightly by 1% to 10.486 billion euros. The Perfumes & Cosmetics division revenue fell by 3% to 8.174 billion euros. The Selective Retailing division revenue remained flat at 18.348 billion euros. The Wines & Spirits division revenue fell by 9% to 5.358 billion euros. The Fashion & Leather Goods segment is LVMH’s largest and most profitable business unit, and its performance is typically seen as a key indicator of the group’s and even the entire luxury industry’s sentiment, highlighting that the global high-end consumption environment remains under pressure.
At the earnings conference, group executives stated that LV’s performance was slightly better than the division’s average, and Loro Piana continued to maintain high growth. LVMH’s CEO Bernard Arnault also revealed that LVMH has acquired additional shares in Loro Piana for approximately 1 billion euros, increasing its stake from 85% to 94%. After the transaction is completed, the Loro Piana family will retain the remaining 6% equity and continue to maintain independent operations.
LVMH acquired 80% of the brand’s shares for 2 billion euros in 2013. Currently, the brand’s valuation is close to 10 billion euros.
Regarding the Watches & Jewelry division’s performance exceeding market expectations, Bernard Arnault said at the earnings conference that Tiffany’s brand transformation is still progressing, while Bulgari delivered outstanding performance throughout the year, with momentum expected to continue next year. The group is actively promoting LV’s jewelry business.
Last September, during a routine trip to Chinese stores, Bernard Arnault personally visited stores of local brands Lao Feng Xiang and Shanyou Youfang, showing particular attention to Lao Feng Xiang, which had already been visited twice by LVMH executives in June last year.
Segmented by market, the Asian market where China is located showed improvement in the second half of 2025. Organic revenue in the region grew by 1% in the fourth quarter, whereas the market had previously expected a decline. For the full year, organic revenue declined by 4%. Group executives pointed out that after Chinese consumers showed improvement in the third quarter, the trend remained stable in the fourth quarter. While local consumption was maintained, outbound tourism consumption also rebounded. Additionally, the Japanese market saw organic revenue decline by 13% for the full year, the European market declined by 1%, and the US market remained flat compared to the previous year.
From the end of last year to the beginning of this year, multiple brands under LVMH have initiated store closure actions in the Chinese market. LV’s Beijing Capital Airport store, Fendi’s Beijing Wangfujing Central store, and Tiffany & Co.’s Harbin Central Street store ceased operations on December 31, 2025. The jewelry brand Chaumet’s Chengdu Taikoo Li store officially closed on January 4. At the same time, LVMH has significantly increased investment in core city high-end shopping malls. In Beijing’s Sanlitun Taikoo Li, the long-renovated Louis Vuitton Maison, Dior Maison, and Tiffany & Co. have successively opened at the end of last year.
After the financial report was released, LVMH’s US-listed stock plummeted rapidly. Morgan Stanley had already downgraded LVMH’s rating to Neutral last week, stating that both tariffs and exchange rate fluctuations could put pressure on the company’s profits this year. In fact, before LVMH’s financial report was released, impacted by US tariff rhetoric, luxury stocks had already become a disaster area. Analysts at a US investment bank stated that the upcoming recovery wave has largely been digested by the market.
Rising living costs, geopolitical uncertainties, and weak consumer confidence are all suppressing global luxury spending.
At the same time, the strategy of frequent price increases adopted by the luxury goods industry over the past two years is showing negative effects. Industry insiders point out that the imbalance between price increases and product innovation and emotional value has triggered consumer dissatisfaction. As the room for price increases gradually narrows, the competitive focus of the luxury goods industry in 2026 may shift from price-driven to demand recovery and value reconstruction.
