Updated 5:33 p.m. ET on Oct. 14
PARIS — LVMH Moët Hennessy Louis Vuitton is seeing glimmers of light at the end of a long tunnel.
The world’s biggest luxury group, which owns brands including Louis Vuitton, Dior, Sephora and Tiffany & Co., beat market expectations in the third quarter by posting its first organic sales increase this year — though reported revenues were down 4 percent as strong currencies dented tourist spending.
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The industry bellwether said revenues for the three months to Sept. 30 totaled 18.3 billion euros, up 1 percent in organic terms, exceeding analysts’ forecasts for a 1 percent decline.
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Its key fashion and leather goods division also performed better than expected, posting a 2 percent organic sales decline, versus a consensus forecast for a 4 percent drop, with both Vuitton and Dior seeing significant improvement with local customers in China.
Chief financial officer Cécile Cabanis said that while LVMH was encouraged by the “pockets of excitement” it is seeing around new retail concepts and designer debuts at key brands, it is not out of the woods yet.
In the fourth quarter, it will face a tougher comparison basis, namely in the U.S., which benefited from a post-election fillip at the end of 2024. In addition, the currency impacts are likely to be even more severe in the last three months of the year, she told analysts and journalists on a webcast on Tuesday.
On the upside, LVMH should benefit from easier comparisons in 2026, when its stores will fill with novelties as products designed by new creative directors gradually come on stream.
“All in all, we are confident while we remain conscious of the macro environment, which is still challenging and continues to be pretty volatile,” Cabanis said.
Within fashion and leather goods, Vuitton performed a little above the division average, and Dior slightly below. Improvements were driven mainly by traffic and volume, rather than price or mix.
(LVMH plans “moderate” price increases in the U.S. in the fourth quarter to compensate for the imposition of a 15 percent tariff on exports from the European Union.)
Green Shoots
New Dior creative director Jonathan Anderson’s debut women’s and men’s collections were “tremendously well received,” the French conglomerate reported.
His first menswear designs will arrive in stores in January, with women’s collections expected in the second quarter, but Anderson’s advertising campaign for the signature Lady Dior handbag is already having a positive impact, signaling the brand’s turnaround efforts are starting to bear fruit.
“We’ve been seeing improvements in Dior in all key nationalities, and really great progress,” Cabanis said. “We are very optimistic about the reigniting of the growth of the Lady Dior and, in addition, Dior Toujours continues to perform very well.”
The brand recently inaugurated two new flagships in New York City and Beverly Hills, which are off to a “very good” start, she reported.
These came on the heels of several key store openings for LVMH, which continues to invest in its top brands, despite hunting for cost savings after reporting a 22 percent drop in net profit in the first half.
Among them is the Vuitton flagship on Via Montenapoleone in Milan, which opened in April; a Tiffany store in Tokyo’s Ginza district, which bowed in July, and an upcoming Loewe boutique opening in Ginza at the end of the year.
LVMH is also bringing on new product categories, namely with the introduction of a cosmetics line at Vuitton in August, and saw a “record-breaking” launch for Hailey Bieber’s Rhode beauty line at Sephora in the U.S., U.K. and Canada this fall.
At Celine, some handbags designed by new creative director Michael Rider are landing in stores, with his first collection set to arrive next month.
Creative duo Jack McCollough and Lazaro Hernandez presented their debut line for Loewe on Oct. 3, while Fendi announced on Tuesday it has named Maria Grazia Chiuri chief creative officer. Her first womenswear collection for the fall 2026 season will be shown in Milan in February.
This means a steady dripfeed of newness in stores, Cabanis said.
“Overall, the way you need to look at it is really around gradual and sequential improvements, rather than a big, giant difference, but we are very confident with the decisions that we made,” she said. “We had great feedback from the different shows, so we are now making sure that all this will be executed.”
China Rising
Watches and jewelry also performed better than expected, with organic sales up 2 percent in the third quarter. Perfumes and cosmetics were in line with forecasts, rising 2 percent.
The wines and spirits division, which is undergoing a wide-ranging restructuring, sharply beat consensus estimates with a 1 percent increase, versus forecasts for a 4 percent drop. Selective retailing also exceeded expectations, up 7 percent.
LVMH said the third quarter saw an improvement across all business groups and all regions, with the exception of Europe, where organic sales were down 2 percent, reflecting a decline in tourist spending due to the impact of the strong euro.
Organic sales were up 3 percent in the U.S. and gained 2 percent in Asia-Pacific, excluding Japan. In Japan, they were down 13 percent, signaling an improvement after a 28 percent drop in the second quarter.
While spending by Chinese tourists abroad was still down in the double digits, the performance in mainland China turned positive in the third quarter, with growth in the mid- to high-single digits, Cabanis said.
Overall, spending by Chinese nationals is down in the single digits, but showing clear signs of improvement, despite no change in the macroeconomic environment.
“It’s still going to take time until we have a rebound on China as a whole,” she cautioned, though she noted consumers are responding positively to innovation and retail disruption.
A case in point is the Vuitton flagship in Shanghai dubbed “The Louis,” which is shaped like a life-size cruise ship. Opened in June, it features a store, café and exhibition space, and is now one of the brand’s top locations for selling luggage.
Cabanis said it would be the model for several other unusual Vuitton retail locations, the next of which will open in Seoul.
The results appeared to justify growing investor confidence in LVMH, which saw its share price take a pummeling this year. Several analysts have recently raised their outlook for the stock, which is now trading around 14 percent below its level at the start of 2025.
In a research note earlier this month, Bernstein designated LVMH as its “best idea” for the fourth quarter.
“LVMH is still the first port of call for any new luxury consumer. It is also the first port of call for many would-be luxury investors,” analyst Luca Solca and his team wrote. “Many of the headwinds facing the luxury industry may well reverse in the coming year. LVMH has all it takes to hit the ground running.”
Some nonetheless remain cautious. Yanmei Tang, analyst at research provider Third Bridge, expects Vuitton to face a slower path to recovery amid ongoing macroeconomic uncertainty, U.S. tariffs and shifting consumer tastes.
“The move away from bold, logo-heavy fashion toward quiet and local luxury has hit Louis Vuitton particularly hard,” Third Bridge said in a comment issued after the LVMH results, adding that it does not expect the brand to return to double-digit growth anytime soon, with negative sales comparisons “likely stretching into 2026 and possibly 2027.”
While Cabanis acknowledged the challenges ahead, she was encouraged by the signals from local clients.
“For us, it’s very important, because it’s where the quality of the growth lies, and it’s where we can really capitalize on our assets in order to build brand desirability and continue to make sure that the local consumer is bonding with the brands,” she said.