LVMH ($MC.PA) reported its FY2025 results earlier this week, and while the numbers confirmed resilience in a difficult environment, they offered little reassurance to investors hoping for encouraging signs of a turnaround.
Key takeaways:
- Revenue was essentially flat YoY, with just 1% growth in H2. Despite that the net income decreased 13%, because of the deteriorating margins.
- The 8% increase in free cash flow can be attributed to changes in working capital and lower investment spending.
- All regions are affected, with no healthy uptrend, although the US and Asia (ex-Japan) managed 1% growth. Europe and Japan are still suffering.
- The clear driver behind the current results is Selective Retailing, mainly Sephora, which delivered 4% YoY growth, accelerating to 8% in Q4. It will likely play an even more important role going forward, given current growth rates and margins.
- The Fashion & Leather Goods segment, which accounts for nearly half of total revenue, remains under pressure, declining 5% YoY.
That said, the tone on 2026 was cautious, with no clear guidance from management. Recent US consumer confidence data further suggests that any recovery will be gradual at best, pointing to another year of stagnation rather than a sharp rebound.
Despite beating analyst expectations, it is not surprising that the market reacted negatively, with the stock falling nearly 15% in the days following the release. With no clear catalyst in sight, the current valuation appears rich, so I rate it as a HOLD.... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
0
0
0
.
We use our own and third-party cookies on our websites to enhance your experience, analyze traffic, and for security and marketing. For more info, see our Cookie Policy or go to Manage Settings.
Privacy Preference Center
When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
More information
Manage Consent Preferences
Strictly Necessary Cookies
Always Active
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
