Navigating the Storm: LVMH's 2025 Financial Landscape and the Unyielding Spirit of Fine Timepieces and Adornments
Global Economic Headwinds Impacting Luxury Demand
The global luxury sector is currently experiencing a period of contraction, influenced by significant economic uncertainties in key markets such as China, the repercussions of US tariffs on goods destined for the region, and ongoing geopolitical tensions worldwide. This challenging environment has created a difficult operational landscape for even the most established luxury brands.
LVMH's First Revenue Dip in Years
After a sustained period of remarkable growth, the luxury giant LVMH reported a 5% (reported) and 1% (organic) decrease in its 2025 revenues, settling at EUR 80,807 million. This marks a significant shift from its previous year's moderate growth of 2% and signals a broader trend within the industry.
Financial Performance Overview and Contributing Factors
The conglomerate's sales in 2025 dropped to EUR 80.8 billion, a decrease from EUR 84.6 billion in the previous year, primarily due to what the group describes as a "disrupted geopolitical and economic environment." Additionally, profit from recurring operations saw a 9% reduction, amounting to EUR 17.8 billion, leading to an operating margin of 22%, partly affected by fluctuating currency exchange rates.
Regional Market Dynamics: A Mixed Bag of Results
Demand in Europe experienced a downturn in the latter half of 2025, while the United States showed growth, fueled by strong domestic consumption. Japan, which enjoyed a prosperous 2024 due to a favorable yen and increased tourist spending, now faces declining sales. Conversely, other Asian markets displayed a notable recovery, with a return to growth in the second half of the year. The group's overall results were particularly influenced by reduced demand in leather goods and fashion, which saw an 8% decline, and wines and spirits, down by 9%.
The Resilience of the Watches & Jewelry Sector
Amidst the broader economic difficulties, LVMH's Watches & Jewelry division demonstrated impressive stability. The sector reported flat sales, with a 3% organic growth and a mere 1% reported revenue decrease, reaching EUR 10,486 million, only slightly down from EUR 10,577 million in 2024. A key factor contributing to this resilience in 2025 was the substantial volume of watch exports to the US prior to the implementation of new tariffs, which positively influenced revenues. The performance of US sales in 2026 will be particularly crucial for this division.