Dive Brief:
- LVMH Moët Hennessy Louis Vuitton continued its trend of declining revenue on Monday, reporting Q1 revenue down 2% to 20.3 billion euros, or about $23 billion.
- Fashion and leather goods, LVMH’s largest division, fell 4% to 10.1 billion euros.
- The France-based luxury conglomerate saw revenue decline in each region, with the exception of Europe, which grew by 2% on an organic basis. U.S. sales fell 3%, and Japan sales declined 1%. The Asia region, excluding Japan, fell 11%.
Dive Insight:
LVMH, holding company of Louis Vuitton, Dior and Loewe, didn’t see a major change in its revenue trends based on President Donald Trump’s tariff announcements in the first quarter, said CFO Cécile Cabanis on an earnings call.
The company is projecting solid growth in the fashion and leather goods division, but its other business lines could be impacted by tariff changes, Cabanis said.
“It’s true that operational clientele is way more vulnerable in less positive economic cycles and uncertainties, and it might have had some impact in recent weeks, but rather on categories like wines and spirits and beauty,” Cabanis said.
LVMH refrains from using price as a growth driver, but it does sometimes use prices to offset inflation, per Cabanis. In the case of tariffs, price changes are “a lever we’re going to consider.” However, she said price increases are not one size fits all, and decisions will be determined on a brand level for what would best serve each one.
LVMH has production facilities in the U.S. for Louis Vuitton and Tiffany & Co., and analysts asked if LVMH was considering moving more production to these facilities in the wake of tariffs. Cabanis said this was something the company is looking at, but it’s not something that can happen overnight.
Cabanis cautioned, however, that the tariff situation is changing quickly and hopes that the 90-day hold will lead to negotiations.
Meanwhile, LVMH has recently gone through a series of executive and creative changes. Earlier this month, the conglomerate named a new CEO of Fendi, a deputy CEO of Dior Couture, and a new CEO of Kenzo.
Loewe, Celine and Givenchy all have named new creative directors within the last year.
The group doesn’t report revenue by brand, but Cabanis said on average, Louis Vuitton performs slightly better, while Dior performs slightly below average. She additionally said Loro Piana had a strong performance but didn’t elaborate on any other brand.
