Runway vs. Revenue: LVMH Q1 2025 – A Reality Check for Luxury
LVMH posted a 3% revenue decline in Q1 2025, landing at €20.3 billion — missing analyst expectations of a modest 2% uptick. Management attributes the slowdown to a “normalization” after several years of exceptional growth, a recalibration after the unprecedented consumer appetite for luxury goods in the post-pandemic years. Together with turbulent macro economic volatility impacting the ‘aspirational buyer’, which is a large part of the customer base of the LVMH brand portfolio.
Key Highlights:
Fashion & Leather Goods: Sales dipped 5%, with Dior notably feeling the impact of transitional creative leadership and shifting brand momentum.
Geography Breakdown: Revenue fell 3% in the U.S. and a sharper 11% in Asia (excluding Japan), while Europe posted a modest 2% gain — reflecting uneven global demand.
Wines & Spirits: A 9% drop, driven by weakening demand in both the U.S. and China, reinforces broader consumer caution.
These numbers echo a wider theme: luxury is not immune to macro volatility. As the industry bellwether, LVMH’s performance spotlights the increasing importance of strategic agility — from pricing discipline to cost management.
It’s essential to strike the right balance between navigating immediate headwinds and positioning for long-term growth. Remaining disciplined on cost structures and strategic pricing power will be key. But in luxury, short-term cost cutting is rarely a sustainable solution — while it may offer temporary relief, it risks undermining brand equity and long-term desirability, which are the true value drivers of any luxury house. In this industry, preserving dream and scarcity outweighs operational quick fixes.
Interestingly, a notable uptick in collaborations with Asian artists and exhibitions across key Asian cities suggests a subtle pivot: reigniting aspiration in one of the most critical markets for luxury. After all, brand equity — and the dream it sells — remains the ultimate goal in selling luxury.
% organic change breakdown by geography
source: LVMH Q1 presentation https://www.lvmh.com/en
% organic change breakdown by business groups
source: LVMH Q1 presentation https://www.lvmh.com/en
