Lvmh Moet Hennessy Louis Vuitton SE Earnings - Q2 2025 Analysis & Highlights
Key Takeaways
LVMH's Q2 2025 earnings call highlighted resilience amidst macro uncertainties, with a focus on qualitative growth, product innovation, and efficiency improvements. Key topics included revenue decline, profitability, regional disparities, and strategic initiatives across various business groups.
Key Financial Results
Revenue reached €40 billion, down 3% on an organic basis.
Profit from recurring operations was €9 billion, a 15% decrease compared to the first half of 2024.
Operating margin remained strong at 22.6%.
Free cash flow increased to €4 billion.
Gearing stood at 15.2%.
Business Segment Results
Wines & Spirits: Revenue of €2.6 billion, down 7% organically. Profit from recurring operations reached €524 million, down 33% year-on-year, with an operating margin of 20.3%.
Fashion & Leather Goods: Revenue reached €19.1 billion, down 7% organically. Profit from recurring operations reached €6.6 billion, down 18% year-on-year, with an operating margin of 34.7%.
Perfumes & Cosmetics: Revenue remained stable organically at €4.1 billion. Profit from recurring operations came to €425 million, down 4% year-on-year, leading to an operating margin of 10.4%.
Watches & Jewelry: Revenue reached €5.1 billion, unchanged organically. Profit from recurring operations came to €762 million, down 13% year-on-year, with an EBIT margin of 15%.
Selective Retailing: Revenue reached €8.6 billion, up 2% organically. Profit from recurring operations rose to €876 million, an increase of 12% year-on-year, with the operating margin rising to 10.2%.
Capital Allocation
An interim dividend was proposed to be stable.
Industry Trends and Dynamics
Solid local demand was observed in Europe and the US.
Tangible sequential improvement was seen in Mainland China in the second quarter.
Abrupt currency swings in Q2 eroded purchases of American and Chinese consumers abroad, especially in Japan.
Competitive Landscape
Emphasis was placed on product innovation and new creative chapters in certain Maisons.
Selective investments were made in retail projects to build long-lasting competitive advantages.
Sephora continued to gain market share in its key geographies.
Macroeconomic Environment
The start of the year was disrupted by macro uncertainties and currency swings.
There was a downturn in China.
The impact of currencies on tourism was significant, especially in Japan.
Growth Opportunities and Strategies
Focus on qualitative development of local clienteles.
Continued emphasis on product innovation.
Selective investments in retail projects.
Initiation of long-term structural efficiencies.
Louis Vuitton continued to display its pioneering mindset and exceptional craftsmanship.
Christian Dior began a new chapter with the arrival of Jonathan Anderson.
Sephora had solid growth in the Americas, Europe, and the Middle East, supported by its store network.
Financial Guidance and Outlook
Continued investment is planned, but with a focus on structural efficiencies.
Confidence in the ability of Maisons to build desirability and competitive advantages when macro headwinds subside.
In the second half of the year, higher transactional and translation impact from currencies are expected, with stronger hedging gains.
