For LVMH, a 4% drop in sales indicates “good resilience”. On the other hand, the “fashion and leather goods” division is worrying everyone, as it reported a 9% drop in sales in Q2 2025 compared to -5% in Q1 and -6% expected. Louis Vuitton and Dior hit the brakes and were thus considered the main suspects. Asia is also having an impact: China so and so, while Japan is slowing.
Troubled quarter
LVMH shares fell after the release of financial data, but the following morning marked +3.5%. The numbers tell us that, in the second quarter, LVMH’s sales fell 4% compared to UBS’ forecasted -3%. In the first half of this year (January-June), the luxury giant’s sales amounted to 39.8 billion euro, -4% from 2024, and slightly worse than expected. The “fashion & leather goods” division (along with wines & spirits) showed the worst performance: -8%. As a consequence, profit from recurring operations was -18% (-15% is the overall group result).
The decline from Asia
“The bulk of the decline originates in Asia, and more specifically from tourism in Japan, while Chinese demand shows improvement”, Cécile Cabanis, CFO of LVMH, told analysts, according to Vogue Business. “We don’t see much change in the performance of the second quarter, which means Louis Vuitton is still slightly better than the division average, while Dior is still slightly below average”.
Vuitton and Dior hit the brakes
Luca Solca, analyst at Bernstein, states the result isn’t positive, but not disastrous. Solca points out that LVMH’s EBIT improved 2% over expectations, thanks to cost containment. He then called on the group to address Dior’s “out-of-control pricing”, source WWD. Citi’s Thomas Chavuet points out how all divisions experienced sequential improvement except for “fashion and leather goods”, with Dior’s estimated double-digit decline and Vuitton’s single-digit decline. “Revenue pressures in the ‘fashion and leather goods’ division, improvement in all other divisions, and cost reductions, should limit further erosion of LVMH’s margins”, Chauvet points out. Louis Vuitton, being the largest brand in the LVMH ecosystem, is the focus of analysts’ attention and concern.
Reassurances
Cabanis dismissed concerns, pointing out that 60% of Louis Vuitton’s sales come from leather goods. “The brand is very focused on elevating its offering with more sophisticated, very high quality and very desirable products. We are also working on connecting with the younger generation with an offering that allows us to meet and engage with them. We refuse to do that with cheap bags”, Cabanis said.
Photo from Louis Vuitton
