Luxury conglomerate LVMH experiences a 22% drop in profits, with ongoing industry challenges continuing to take a toll on business.

In the world of luxury fashion, LVMH Moët Hennessy Louis Vuitton (LVMH) has faced a significant setback, with the company reporting a 4% decline in revenue for the first half of fiscal 2025. The decline, amounting to 39.8 billion euros, was revealed on April 30, 2025, by an article written by Lara Ewen.

The downturn in LVMH's fashion and leather goods division, which is the company's largest, saw an 8% year-over-year decline in revenue. This could be attributed to young consumers shifting towards more trendy luxury brands like Prada and Miu Miu, according to industry analysts.

However, not all luxury brands have been affected. Smaller firms like Brunello Cucinelli and Richemont have reported revenue increases and upticks respectively in the first half of fiscal 2025.

Cecile Cabanis, LVMH's chief financial officer, stated that a change in tourism was responsible for the company's global revenue challenges. The impact of tourism is more significant in Asia, according to LVMH, with Japan benefiting from exceptional demand last year due to yen weakness, but seeing a reversal in Q2. Organic revenue in Japan plummeted 28% in the second quarter of 2025, due in part to trade tensions weighing on consumers in China.

LVMH has also faced leadership changes. In April, the company shuffled the leadership at three key brands, and in July, LVMH named a new CEO of its Americas division.

The watches and jewelry division of LVMH experienced a 1% decline for the first half of the year, while the perfumes and cosmetics division also had a 1% decline for the same period.

Jelena Sokolova, an analyst with Morningstar, expects revenue to recover somewhat for LVMH. In her base-case scenario, she forecasts annual sales growth of 5% over the next decade for LVMH, which is conservative compared with historical growth of 10%. Sokolova believes that growth will be supported by normalizing demand from Chinese and U.S. consumers.

In a separate article published on June 17, 2025, Ewen wrote about six luxury firms in need of a turnaround. LVMH has struggled over the past few quarters amid a heavily reported slowdown in the personal luxury goods sector. However, the company did not provide a formal outlook for the remainder of the year.

Despite these challenges, LVMH continues to be a dominant player in the luxury market. The company's net profit decreased by 22% for the same period, and profit from recurring operations was down 15%. As the industry evolves, it will be interesting to see how LVMH adapts and navigates these changing market dynamics.

Luxury conglomerate LVMH experiences a 22% drop in profits, with ongoing industry challenges continuing to take a toll on business.