Company Reports

LVMH delivered 3% organic growth in the second quarter, an improvement from 1% in the first quarter, with the fashion and leather goods division turning positive, up 1%. Costs remained well controlled, as operating margin was broadly flat year on year.

LVMH revenue trends remained soft in the first quarter, with group organic growth at 1% dampened by a 2% decline in fashion and leather, its most profitable division, while most other segments turned positive. The war in the Middle East shaved off 1% of growth.

We believe that a portfolio of strong leading brands in several luxury niches grants LVMH Moet Hennessy Louis Vuitton a wide moat and should allow it to generate economic profits well into the future. In fashion and leather goods (over half of the company’s profits), LVMH’s brand intangible assets are backed by the 100-plus-year-old globally recognized Louis Vuitton brand, with long product cycles and fully controlled distribution, as well as several smaller but still iconic brands, including Dior and Loro Piana. In wines and spirits LVMH benefits from strong market share and brand recognition in conspicuous market niches. LVMH’s brands are entrenched in distributors’ supply chains and enjoy bargaining power with suppliers thanks to their size. Long production cycles and high need for inventory in champagnes and cognacs, as well as supply limitation due to land availability, create barriers for new entrants. In the rest of the business, LVMH Group has a smaller presence, but still has several strong brands, such as Dior and Guerlain in perfumes and Bulgari and Tiffany in branded jewelry (we regard entry barriers for luxury jewelry as particularly high).

Luxury sector shares were down by 1%-7% on March 2 following the US and Israeli attacks on Iran and Iran's retaliatory attacks on Israel and US bases across the Middle East (United Arab Emirates, Saudi Arabia, Qatar, Kuwait, and Bahrain).

LVMH reported a 1% organic decline in revenue in 2025 with slightly improving trends in the second half of the year (1% organic growth in the third and fourth quarters). The leather goods division was down 5% organically for the year and was down 3% for the quarter. Margins came under pressure.

We believe that a portfolio of strong leading brands in several luxury niches grants LVMH Moet Hennessy Louis Vuitton a wide moat and should allow it to generate economic profits well into the future. In fashion and leather goods (over half of the company’s profits), LVMH’s brand intangible assets are backed by the 100-plus-year-old globally recognized Louis Vuitton brand, with long product cycles and fully controlled distribution, as well as several smaller but still iconic brands, including Dior and Loro Piana. In wines and spirits LVMH benefits from strong market share and brand recognition in conspicuous market niches. LVMH’s brands are entrenched in distributors’ supply chains and enjoy bargaining power with suppliers thanks to their size. Long production cycles and high need for inventory in champagnes and cognacs, as well as supply limitation due to land availability, create barriers for new entrants. In the rest of the business, LVMH Group has a smaller presence, but still has several strong brands, such as Dior and Guerlain in perfumes and Bulgari and Tiffany in branded jewelry (we regard entry barriers for luxury jewelry as particularly high).

LVMH ADRs were up as much as 8% after announcement of third quarter revenue figures that saw a return to 1% growth for the group in constant currencies (4% decline in the second quarter) and improving trends in the fashion and leather division (down 2%, versus a 9% decline in the second quarter).

LVMH reported another quarter of declining sales, down 4% year over year, with its largest and most profitable segment, fashion and leather, falling 9%. The group’s operating margin contracted by 3%, and by 4% in fashion and leather, reflecting weak operating leverage.

We believe that a portfolio of strong leading brands in several luxury niches grants LVMH Moet Hennessy Louis Vuitton a wide moat and should allow it to generate economic profits well into the future. In fashion and leather goods (over half of the company’s profits), LVMH’s brand intangible assets are backed by the 100-plus-year-old globally recognized Louis Vuitton brand, with long product cycles and fully controlled distribution, as well as several smaller but still iconic brands, including Dior and Loro Piana. In wines and spirits LVMH benefits from strong market share and brand recognition in conspicuous market niches. LVMH’s brands are entrenched in distributors’ supply chains and enjoy bargaining power with suppliers thanks to their size. Long production cycles and high need for inventory in champagnes and cognacs, as well as supply limitation due to land availability, create barriers for new entrants. In the rest of the business, LVMH Group has a smaller presence, but still has several strong brands, such as Dior and Guerlain in perfumes and Bulgari and Tiffany in branded jewelry.

We maintain our fair value estimate of EUR 650 per share for wide-moat LVMH after the company reported weakening sales in the first quarter of 2025.

We are maintaining our fair value estimates for stocks in our luxury coverage following the announcement of reciprocal tariffs by US President Donald Trump. Tariffs of 20% on the European Union, 10% on the UK, and 31% on imports from Switzerland are having the most impact on our coverage (as well as 36% tariffs on Thailand for Pandora, where most of its manufacturing takes place). Americans account for around 30% of global luxury consumption and sales exposures in the Americas for companies under our coverage range from the midteens to high 30s. Moncler, Prada, and Swatch are least exposed; EssilorLuxottica, Brunello Cucinelli, and Pandora are most exposed.

Wide-moat LVMH reported fourth-quarter 2024 results with just 1% organic revenue growth and a 14% decline in reported operating earnings compared with 2023. This comes in contrast to its share price rally, which has risen 18% since the start of 2025. China's economic slowdown, coupled with tough comparisons with a record 2023, remains the main drag on performance. We maintain our fair value estimate of EUR 650 per share and see shares as overvalued.

We are maintaining our fair value estimate for wide-moat LVMH as we incorporate weakening revenue and reduce our forecasts for 2024 sales and profits. Shares are fairly valued at current levels after losing a third since their 2023 peaks.

We believe that a portfolio of strong leading brands in several luxury niches grants LVMH Moet Hennessy Louis Vuitton a wide moat and should allow it to generate economic profits well into the future. In fashion and leather goods (over half of the company’s profits), LVMH’s brand intangible assets are backed by the 100-plus-year-old globally recognized Louis Vuitton brand, with long product cycles and fully controlled distribution, as well as several smaller but still iconic brands, including Dior and Loro Piana. In wines and spirits LVMH benefits from strong market share and brand recognition in conspicuous market niches. LVMH’s brands are entrenched in distributors’ supply chains and enjoy bargaining power with suppliers thanks to their size. Long production cycles and high need for inventory in Champagnes and cognacs, as well as supply limitation due to land availability, create barriers for new entrants. In the rest of the business, LVMH Group has a smaller presence, but still has several strong brands, such as Dior and Guerlain in perfumes and Bulgari and Tiffany in branded jewelry.

We are reducing our fair value estimate for wide-moat LVMH to EUR 650 per share from EUR 670 to factor in slower expectations for 2024 sales progression and some margin pressure as the company is affected by the industry slowdown. After losing around a fifth of their value over the course of last year, LVMH shares trade approximately in line with our fair value estimates. We are confident in our wide moat rating for the stock and its resilience through industry slowdown. The luxury industry is cyclical, but downturns historically haven’t lasted longer than one to two years.

We believe that a portfolio of strong leading brands in several luxury niches grants LVMH Moet Hennessy Louis Vuitton a wide moat and should allow it to generate economic profits well into the future. In fashion and leather goods (over half of the company’s profits), LVMH’s brand intangible assets are backed by the 100-plus-year-old globally recognized Louis Vuitton brand, with long product cycles and fully controlled distribution, as well as several smaller but still iconic brands, including Dior and Loro Piana. In wines and spirits LVMH benefits from strong market share and brand recognition in conspicuous market niches. LVMH’s brands are entrenched in distributors’ supply chains and enjoy bargaining power with suppliers thanks to their size. Long production cycles and high need for inventory in Champagnes and cognacs, as well as supply limitation due to land availability, create barriers for new entrants. In the rest of the business, LVMH Group has a smaller presence, but still has several strong brands, such as Dior and Guerlain in perfumes and Bulgari and Tiffany in branded jewelry.

We are maintaining our fair value estimate of EUR 670 for wide-moat LVMH as the company reported an expected slowdown in growth trends in the first quarter. We view shares as modestly overvalued at current levels.

We believe that a portfolio of strong leading brands in several luxury niches grants LVMH Moet Hennessy Louis Vuitton a wide moat and should allow it to generate economic profits well into the future. In fashion and leather goods (over half of the company’s profits), LVMH’s brand intangible assets are backed by the 100-plus-year-old globally recognized Louis Vuitton brand, with long product cycles and fully controlled distribution, as well as several smaller but still iconic brands, including Dior and Loro Piana. In wines and spirits LVMH benefits from strong market share and brand recognition in conspicuous market niches. LVMH’s brands are entrenched in distributors’ supply chains and enjoy bargaining power with suppliers thanks to their size. Long production cycles and high need for inventory in Champagnes and cognacs, as well as supply limitation due to land availability, create barriers for new entrants. In the rest of the business, LVMH Group has a smaller presence, but still has several strong brands, such as Dior and Guerlain in perfumes and Bulgari and Tiffany in branded jewelry.

We are maintaining our fair value estimate of EUR 670 per share for wide-moat LVMH as the company reported solid 2023 results, just slightly ahead of our estimates. Revenue for the full year was up 9% and 13% organically, delivering 10% organic growth in the final quarter. Profit from recurring operations was up 8% with slight margin pressure, notably with the lower-margin selective retailing division outperforming other segments and slight margin pressure in fashion and leather goods.

We believe that a portfolio of strong leading brands in several luxury niches grants LVMH Moet Hennessy Louis Vuitton a wide moat and should allow it to generate economic profits well into the future. In fashion and leather goods (over half of the company’s profits), LVMH’s brand intangible assets are backed by the 100-plus-year-old globally recognized Louis Vuitton brand, with long product cycles and fully controlled distribution, as well as several smaller but still iconic brands, including Dior and Loro Piana. In wines and spirits LVMH benefits from strong market share and brand recognition in conspicuous market niches. LVMH’s brands are entrenched in distributors’ supply chains and enjoy bargaining power with suppliers thanks to their size. Long production cycles and high need for inventory in Champagnes and cognacs, as well as supply limitation due to land availability, create barriers for new entrants. In the rest of the business, LVMH Group has a smaller presence, but still has several strong brands, such as Dior and Guerlain in perfumes and Bulgari and Tiffany in branded jewelry.