Recovering from the crash, catching up?
LVMH, the French luxury conglomerate, is navigating a tough phase reminiscent of the 2008 financial crisis, yet demonstrating resilience in the face of challenging global conditions. The company reported solid results for the first half of 2025, despite a 4% year-over-year revenue decline to €39.8 billion and a 15% drop in profit from recurring operations.
The mixed recovery is evident in the regional variations and segment-specific trends. Europe witnessed growth of around 1%, while the U.S. remained stable. However, Japan experienced a decline of approximately 15%, and other parts of Asia excluding Japan saw a drop of around 9%, due to currency effects and reduced tourist spending, particularly from China.
LVMH's largest division, Fashion and Leather Goods, saw an 8% revenue decline, particularly in Q2, while Watches & Jewelry remained stable (-1%) and Perfumes & Cosmetics held steady despite market headwinds.
CEO Bernard Arnault expressed confidence in the Group's long-term potential, emphasizing innovation, artisanal craftsmanship, and a focus on quality. The CFO clarified that LVMH will avoid discounting, instead focusing on efficiency and accessibility through entry-level luxury products. The company remains vigilant in navigating the economic environment but believes in its leadership position and growth prospects.
Analysts expect a gradual recovery, forecasting around 5% annual sales growth over the next decade, supported by the normalization of demand in China and the U.S., albeit at a more conservative pace compared to the historically rapid growth observed over previous decades.
Technically, there are signs of a possible stabilization, with the LVMH share close to an important resistance zone at around 469 euros. If the share can sustainably break through this level, initial targets between 500 and 505 euros would be within reach.
The fundamentals, brand power, and valuation of LVMH suggest a recovery, making it an attractive investment opportunity. The company's resilience and strategic management have positioned it as an absolute luxury giant, ready for the next luxury rally, as discussed in the publication "High End, High Potential".
However, it's important to note that LVMH (WKN: 853292) is currently in a noticeable weakness phase. The board and majority shareholder of Börsenmedien AG, Mr. Bernd Förtsch, has positions in LVMH.
In summary, despite a recent phase of revenue and profit declines driven by macroeconomic challenges and regional headwinds, LVMH is demonstrating resilience thanks to brand strength and strategic management, with a cautiously optimistic medium-to-long-term growth outlook. If the 540 to 545 euros hurdle is also overcome, the 200-day line at around 570 euros could come into play, providing a clear, fresh buy signal. The company may present a rare opportunity for long-term investment.
- In the face of financial difficulties similar to those experienced during the 2008 crisis, LVMH, a prominent player in the luxury business sector, is demonstrating investing resilience through strategic management and a focus on brand strength.
- As analysts forecast a gradual recovery for LVMH, with annual sales growth predictions of around 5% over the next decade, the company's financial performance and valuation could make it an appealing business investment opportunity.
