What's Happening?
LVMH has reported a return to growth in the third quarter of 2025, with sales rising by 1% to €18.3 billion. This marks the company's first quarter of growth this year, following a softer first half. The
luxury group attributes this turnaround to strengthened demand in key markets and new creative directions for its flagship brands. Despite challenges in Europe due to currency fluctuations, LVMH has seen improvement across all business groups and regions. The company plans to continue investing in brand desirability, retail execution, and quality to ensure long-term performance.
Why It's Important?
LVMH's strategic focus on brand investment highlights the importance of maintaining brand desirability in the luxury market, especially during periods of slower growth. By prioritizing creative renewal and retail upgrades, LVMH aims to enhance its competitive edge and drive sales. This approach contrasts with short-term margin protection strategies, emphasizing the company's commitment to long-term growth. The rebound in sales, driven by traffic and volume rather than price increases, underscores the effectiveness of LVMH's strategy in attracting consumers and sustaining demand.
What's Next?
LVMH expects to benefit from 'self-help' measures, including creative renewal and product innovation. The company plans to open new flagship stores and expand its retail concepts in Asia, anticipating a more favorable comparison base in the first half of 2026. Management remains optimistic despite currency headwinds and uneven demand across regions, focusing on maintaining brand desirability and quality. The upcoming quarters will be crucial for LVMH as it navigates the volatile macro environment and aims to sustain its growth momentum.
Beyond the Headlines
LVMH's emphasis on brand desirability reflects broader trends in the luxury market, where consumer preferences are increasingly influenced by brand image and experience. The company's strategy of investing in creative renewal and retail upgrades aligns with the growing demand for unique and personalized luxury experiences. This approach not only enhances LVMH's market position but also sets a precedent for other luxury brands facing similar challenges.
