LVMH Moët Hennessy Louis Vuitton

LVMH’s 2025 was not a year of acceleration. It was a year of proof.

After several years of extraordinary post-pandemic demand, fiscal year 2025 marked a return to gravity for LVMH. Reported revenue declined modestly, margins compressed slightly, and certain categories—most notably Wines & Spirits—continued to feel the aftershocks of exceptional prior years. Yet taken as a whole, the year demonstrated something more important than growth: the durability of the Group’s economic engine.

Revenue for the year reached €80.8 billion, down on a reported basis and slightly lower organically. This was less a function of demand destruction than of normalization. Tourism-driven spending, particularly in Japan, eased after an unusually strong 2024.

Currency headwinds weighed on reported numbers. Cognac demand softened amid trade frictions and inventory adjustments. And yet, as the year progressed, trends stabilized. Organic growth turned positive in the second half, and by the fourth quarter the Group was growing again—quietly, steadily, without drama.

 

Profitability followed a similar pattern. Profit from recurring operations came in at €17.8 billion, translating to a 22% operating margin. That margin declined year-on-year, but it remained exceptional by any global consumer standard. In a year marked by cost inflation, FX pressure, and ongoing investment in retail and creative transitions, LVMH once again demonstrated that its brands possess something few companies truly have: the ability to protect margin even when volume slows.

Nowhere was this more evident than in Fashion & Leather Goods. This division, anchored by Louis Vuitton and Dior, once again proved to be the gravitational center of the Group. It accounted for just under half of total revenue, yet generated close to three-quarters of operating profit. Even as reported sales declined modestly, margins remained around 35%—a level that underscores the pricing power, brand equity, and operating leverage embedded in the segment.

Tourist flows may ebb and flow, but desirability does not vanish. Local demand in the United States and Europe held firm, and the maisons continued to invest aggressively in stores, craftsmanship, and creative leadership, reinforcing long-term brand strength rather than chasing short-term volume.

If Fashion & Leather Goods represented stability, Selective Retailing represented momentum. Sephora, in particular, stood out as one of the Group’s strongest performers in 2025. Revenue grew organically, operating profit surged by nearly 30%, and margins expanded meaningfully. Scale, omnichannel execution, and disciplined expansion translated directly into earnings.

DFS, while still constrained by global travel dynamics, improved profitability materially following restructuring efforts, and the subsequent agreement to divest its Greater China operations in early 2026 marked a decisive step in sharpening focus and capital efficiency.

Elsewhere, performance was more mixed but strategically coherent.

Watches & Jewelry returned to organic growth, driven primarily by jewelry. Tiffany & Co.’s store renovations and iconic collections continued to resonate, while high jewelry performed particularly well. 

Perfumes & Cosmetics held revenue steady organically but delivered profit growth, supported by innovation and a highly selective retail strategy. Dior Sauvage once again stood out as a global bestseller, reinforcing the importance of scale products within a tightly controlled brand universe.

Wines & Spirits remained the laggard. After several years of outsized growth, the segment faced a combination of weaker cognac demand, trade-related friction, and difficult comparisons. Champagne held up relatively well, maintaining market share, but the overall result was a sharp decline in operating profit. Management responded not by chasing demand, but by launching efficiency initiatives and doubling down on long-term brand desirability—a recurring theme across the Group.

What tied all of this together was cash. Operating free cash flow increased to €11.3 billion, even as profits declined modestly. Working capital discipline improved, capex normalized, and the balance sheet strengthened materially. Net debt fell by more than a quarter year-on-year, reinforcing LVMH’s financial flexibility. In a year without headline growth, the Group quietly expanded its strategic optionality.

Geographically, the picture was nuanced. The United States continued to grow, supported by local customers rather than tourists. Europe softened in the second half. Japan normalized after an exceptional prior year. Asia outside Japan improved sequentially and returned to growth in the latter part of the year. Diversification across regions once again did what it was designed to do: absorb volatility without compromising the whole.

By the end of 2025, LVMH stood in a familiar position. Growth was no longer extraordinary, but profitability was intact. Cash generation was strong. Brands remained dominant. And investments—in creativity, retail, sustainability, and craftsmanship—continued uninterrupted. This was not a year designed to impress on a chart. It was a year designed to reassure.

From an analytical perspective, 2025 reinforced a simple truth about LVMH. The Group is not built to optimize for short-term growth spikes. It is built to compound desirability into margin, margin into cash, and cash back into brands—across cycles, currencies, and consumer moods.

That engine continued to run in 2025.