LVMH sales for the first semester grew to €38.6 billion with an accelerated growth in the second quarter of 3%. Despite a fragile luxury sector, the group experienced strong growth in various segments, including its watches and jewelry division, selective distribution (which includes specialty retailer Sephora and French department store Le Bon Marché), and fashion and leather goods segment. A clear slowdown was visible in Europe, with the U.S. and Asia lifting the group’s sales overall. Net profit remained stable at €5.697 billion despite an unfavorable exchange rate effect of 700 million euros.
An Encouraging Path for Fashion And Leather Goods
For the first time in seven quarters, the fashion and leather goods division of the group returned to growth with sales up 1% in Q2. Although modest, this marks a possible shift for the group as Dior, lifted by its head designer Jonathan Anderson, is enjoying strong visibility. As expressed by Bernard Arnault in the official press release, “the accelerated growth in the second quarter stems in particular from the great success of Jonathan Anderson’s first creations for Christian Dior and the remarkable performance of Louis Vuitton’s exceptional new boutiques in Beijing.”
Indeed, consensus around the designer’s arrival at Dior demonstrate he is opening a fresh, modern new chapter for the fashion house. Bringing in a sense of novelty both in his shows and the overall style of the brand, he is making creative decisions that are making Dior stand out as one of the most acclaimed brands of the moment. With this division making up the majority of the group’s operating profits, this trend is encouraging and will need to be closely watched to see if momentum continues in this direction.
In parallel, the watches and jewelry division is also showing very promising results, with a sales growth of 11% over Q2 and 7% over the first half of the year. Behind this momentum, Tiffany & Co. and Bvlgari are making the group shine, especially as their respective high jewelry lines are enjoying success with consumers. Within its watchmaking brands, TAG Heuer continues to benefit from cultural momentum thanks to strong visibility during Formula 1 Grand Prix races.
Growth In The U.S. And Asia Compensates for Europe Slowdown
Half-year results show a very palpable slowdown in Europe, with -3% in organic growth for Q1, flat growth in Q2 and overall -1% for the first half. A decline in tourism and consumer spending due to international conflict is to blame for this deceleration.
In comparison, the U.S., Japan, and Asia (excluding Japan) all experienced organic growth between 4 and 6% over the course of H1. The U.S. has become the region driving growth for the group, mainly thanks to increase in demand from affluent shoppers in the region, according to Reuters. Growth in Japan and Korea is also more notable, helping break a two-year challenging period in the Asian luxury market.
Overall, the group demonstrates its continued strong financial discipline: despite a challenging geopolitical context, and net income also remained stable at 22.5%, and so did its net income for the first semester, stable at €5.697 billion.
With the luxury market still exposed to a general decline in demand, LVMH shares have declined significantly this year. There are however early signs of a turnaround and the luxury industry could be back on track, with early reports indicating that 2026 could be the year it returns to growth. According to a BCG report released this July, “growth for FY26 is expected at 2-5% CAGR, moving to 4-7% by 2029, with luxury now built on healthier and more balanced foundations than during the ‘rebound and reset’ years following the pandemic.”
