What: LVMH's fashion and leather goods division faces 9% sales decline in Q2 2025, with Japan sales plummeting 28% amid broader market challenges and leadership transitions. First-half net profit drops by 22%.

Why it is important: The results highlight how luxury groups are grappling with regional market shifts and currency fluctuations, while managing multiple brand transitions under new creative leadership.

LVMH's fashion and leather goods division reported a 9% drop in organic sales for the second quarter, falling below analysts' expectations of a 7% decline. While Louis Vuitton maintains its position as the group's top performer, Dior's performance remained below the division average. The decline was primarily attributed to weakness in Asia, particularly in Japan, where sales plunged 28% year-on-year due to currency effects. Despite these challenges, the division maintained a healthy operating margin of 34.7%, though operating profit fell 18% in the first half. The group continues to invest in brand development, with recent flagship openings in Shanghai and Tokyo, while seeking efficiencies in areas such as marketing and fashion shows. The results come during a period of significant creative transitions, with new designers at key houses including Jonathan Anderson at Dior and upcoming debuts at Loewe.

IADS Notes: LVMH's Q2 2025 performance reflects the culmination of challenges observed throughout 2024-2025. In January 2025, the group reported a 2% revenue decline for 2024, leading to comprehensive portfolio reviews and operational adjustments. The luxury sector has faced its most significant downturn since the Great Recession, with December 2024 data showing a 2% market decline and the loss of approximately 50 million consumers over two years. This transformation is particularly evident in Asia, where changing consumer behaviors and currency fluctuations have impacted traditional luxury shopping patterns. The group's response, including July 2025's closure of its 24S e-commerce platform and March 2025's reunification of Le Bon Marché and La Samaritaine operations, demonstrates how luxury groups are fundamentally restructuring their operations while managing creative transitions across their brand portfolio.

LVMH’s net profit fell 22% in 2025 first half