LVMH, the owner of Louis Vuitton and Tiffany, reported quarterly sales of 22.7 billion euros on Jan 27, a result that outpaced analysts' forecasts and reinforced hopes for a gradual recovery in the luxury sector.
The group said total revenue rose 1% on a like-for-like basis versus the same period a year earlier. That performance contrasted with a consensus forecast compiled by Visible Alpha that had pointed to a 0.3% decline. Within LVMH’s portfolio, the fashion and leather division - the largest profit contributor - recorded a 3% revenue decline when adjusted for currency swings, matching market expectations.
Management highlighted a resumption of growth in Asia, with domestic sales in China increasing during the quarter. The company has previously signalled a return to improvement in Chinese demand, and the latest figures appeared to confirm that trajectory.
Pressure on profit and margins
Despite the sales beat, LVMH reported a 9% drop in 2025 operating profit. The group attributed margin deterioration to several factors. Currency moves were a dominant influence, accounting for just over half of the margin decline. Additional headwinds included U.S. tariffs that affected alcohol exports and record-high gold prices that raised the import costs of jewellery.
The combination of these cost pressures and adverse exchange-rate effects reduced profitability even as revenue held up.
Strategic moves in China
Facing a property market crisis and rising local competition in China, LVMH has used its substantial financial resources to bolster its presence across the market. Recent investments include opening a large, ship-shaped Vuitton store in Shanghai and launching a new Dior flagship in Beijing, among other initiatives designed to capture market share as local conditions evolve.
Market participants remain focused on the strength of Chinese consumer demand. As Berenberg analyst Nick Anderson put it, "The Chinese consumer faces a whole ton of headwinds, and that’s one of the big data points we’ll be looking for this quarter." UBS estimates that Chinese shoppers, including tourists abroad, represent almost a third of LVMH’s fashion and leather sales, underscoring why shifts in that market carry significant weight for the group.
Regional performance and investor reaction
LVMH said regional sales in Europe fell 2% last quarter as a weaker U.S. dollar reduced spending by American tourists in Europe. Sales in the United States rose by 1% over the same period, while sales in Asia, including China, increased by 1%. The company also noted the currency conversion rate used: $1 = 0.8365 euros.
Investor sensitivity to Chinese demand is high. At the group’s prior trading update, comments indicating slightly better demand in China helped trigger a rally across luxury stocks that added nearly $80 billion to combined company valuations.
Third-party stock evaluation mention
Separate from the company statement, the article included a description of a stock evaluation service, noting that an AI-based tool reviews companies using more than 100 financial metrics to identify potential investment ideas. That description referenced the tool’s methodology and gave examples of prior winners, while inviting readers to check whether LVMH appears in any of its strategies.