French luxury group LVMH (Louis Vuitton, Dior, Celine, Moët Hennessy) saw its net profit fall 22 percent in the first half of 2025, the company said on Thursday, June 25, citing the “unsustainable economic and geopolitical” situation.
Cosmetics and selective distribution help smooth the situation
Although sales fell four percent to just under 40 billion euros ($47 billion), Chairman and CEO Bernard Arnault says LVMH is “showing its resilience in the current environment.”
In the first half of the year, the biggest impact on the company’s deterioration in results came from sales in the Fashion & Leather Goods and Wine & Spirits categories, which fell by 8%. Sales in the Perfumes & Cosmetics business unit remained flat , as did those in the Watches & Jewelry segment.
As for “selective distribution” , which includes Sephora, Le Bon Marché and DFS, sales remained close to the same period in 2024 and amounted to 8.6 billion euros.
Trump Tariffs
Like the entire luxury goods sector, LVMH is grappling with slowing consumer spending in China and a general decline in global demand for luxury goods. The group is also under pressure from U.S. tariffs and tightening regulations in China.
The maker of Louis Vuitton handbags and Dom Perignon champagne is particularly sensitive to the threat of tariffs from US President Donald Trump because a quarter of its revenue comes from the United States.
After the US president announced tariffs on “Liberation Day” on April 2, Arnault, Europe’s richest man, watched Hermes overtake LVMH to become the world’s most valuable luxury goods company.
That same month, Trump imposed a 10 percent tariff on imports from around the world but delayed imposing higher duties on dozens of other countries, with an Aug. 1 deadline for them to reach trade deals or face steeper tariffs.
“We approach the second half of the year with great caution, and I am confident in LVMH’s significant long-term potential,” Arnault, who attended Trump’s second inauguration in January, said in a press release on Thursday.