Editor’s Note
This article discusses LVMH’s reported revenue and profit decline in H1 2025, highlighting a contrast between high-profile marketing events and underlying financial performance.
Recently, LV’s (Louis Vuitton) “big ship” sailing into Shanghai was undoubtedly an eye-catching marketing spectacle, but it could not conceal the financial difficulties of its parent company.
On the evening of July 24, LVMH Group, one of the world’s top three luxury goods groups, released its financial report for the first half of 2025. The report shows that both the group’s revenue and profit declined. Total revenue fell by 4% year-on-year to 39.81 billion euros; recurring operating profit dropped by 15% to 9.01 billion euros, while net profit decreased by 22% to 5.69 billion euros.
The “Fashion & Leather Goods” division, which serves as the performance pillar of LVMH Group accounting for about half of its business, performed the worst. This division includes brands such as LV and Dior, with organic revenue declining by 7% in the first half of this year, including a 9% year-on-year drop in revenue in the second quarter.
Boosting sales has become an urgent need for top luxury brands.
The financial report shows that in the first half of 2025 ending in June, LVMH Group’s revenue at constant exchange rates fell by 4% to 39.81 billion euros, a 3% decline on an organic basis; net profit dropped by 22% to 5.69 billion euros, and the operating margin decreased to 22.6%, down 2.5 percentage points year-on-year. In the second quarter, LVMH Group’s revenue at constant exchange rates fell by 4% to 19.5 billion euros.
Looking at business segments by division, only one segment of LVMH Group achieved growth in the first half of this year. Among them, the “Wines & Spirits” and “Fashion & Leather Goods” divisions both saw a 7% year-on-year decrease in organic revenue, with revenues of 2.59 billion euros and 19.12 billion euros, respectively; the “Watches & Jewelry” and “Perfumes & Cosmetics” divisions recorded flat organic revenue compared to the same period last year, with revenues of 5.09 billion euros and 4.08 billion euros, respectively. The “Selective Retailing” division, which includes Sephora, saw organic revenue grow by 2% to 8.62 billion euros.
It is worth noting that the “Fashion & Leather Goods” division covers major brands such as LV, Dior, and Celine, accounting for about half of LVMH Group’s business. However, in the first half of this year, this segment not only experienced negative growth for two consecutive quarters but also saw the decline further expand: -5% in Q1 and -9% in Q2.
By region, in the first half of this year, LVMH Group’s performance in the European market was the best, with revenue increasing by 1% year-on-year. The Japanese market and the Asia-Pacific market (excluding Japan) saw year-on-year declines of 15% and 9%, respectively, in the first half of the year.
Zhou Ting, a luxury industry expert, pointed this out to the Daily Economic News reporter. Over the past few decades, opening physical stores globally has been the main strategy for major luxury brands to expand their territories.
Regarding this, Zhou Ting further stated to the reporter that luxury brands also suffer from severe product homogenization, making it difficult to stimulate more consumer desire.
Additionally, “high inventory” is also a reason for the pressure on brand performance.
Zhou Ting said.
To boost sales and attract potential customers, top luxury brands are also racking their brains.
This year, LV’s “big ship” in Shanghai—the “Louis Vuitton Voyager”—frequently went viral on social media, with its “boarding passes (visit tickets)” and “dining” being highly sought after. LVMH Group also mentioned the “Louis Vuitton Voyager” in its latest financial report, stating that LV continues to demonstrate creativity by constantly reinventing its iconic products and unique brand experiences. The “Louis Vuitton Voyager” embodies the “spirit of travel” that LV has adhered to since its founding in 1854.
However, just as LV was attracting customers with grand events, news suddenly emerged (on July 19) that it was being investigated by the Hong Kong Privacy Commissioner for Personal Data for allegedly leaking information of approximately 420,000 luxury buyers. Its “sister” brand Dior also admitted to “leakage of Chinese customer information” in May this year. This undoubtedly sounds an alarm for luxury brands eager to boost sales: how to find a balance between increasing sales and protecting user privacy?
Zhou Ting told the Daily Economic News reporter bluntly that the current customer privacy leakage incidents have already created a crisis for the entire luxury industry.
The overall luxury industry is facing systemic risks. Zhou Ting believes that brand cost-effectiveness will gradually give way to product cost-effectiveness and service cost-effectiveness.
However, China remains a core global luxury market. The latest data from the Key Customer Research Institute shows that in the first two quarters of 2025, the Chinese luxury market contributed a total of 517 billion yuan in sales, driving approximately 5 trillion yuan in related high-end consumption industries to achieve counter-trend growth. Notably, in 2024, the 278 monitored luxury brands opened about 350 new stores in China, while 89 brands completed renovation and upgrading of a total of 430 stores.
Zhou Ting stated that luxury brands continuously opening large stores and experience stores, and focusing on online channels to improve operational efficiency and customer experience, will become the future business direction for many brands.