As at: 10 August 2026

Executive Summary

Key highlights

In this report, we review LVMH’s 1H26 results released in July 2026 and assess the impact on our outlook:

Financial results at a glance:

• Group revenue declined by 3% on a reported basis and grew by 2% on an organic basis, with foreign exchange headwinds being the driver of lower reported growth numbers. 

• Revenue from Wines and Spirits was flat on a reported basis and up 5% on an organic basis, driven by stronger performance from champagne, some wines and cognacs.

• Fashion and Leather Goods revenue decreased by 5% on a reported basis and 1% organically, with an acceleration in performance in the second quarter. The segment experienced the expected volatility associated with its soft luxury nature during a period where hard luxury is more resilient.

• Perfumes and Cosmetics revenue lost 4% on a reported basis and was flat organically, supported by a robust innovation policy and a highly selective retail approach.

• Revenue from Watches and Jewellery rose by 3% on a reported basis and grew 9% organically, driven by strong brand equity during a period of subdued Swiss watch exports on a rolling 12-month basis, albeit with some recent trend recovery. Performance in the segment was also driven by jewellery, particularly through Tiffany & Co.

• Revenue from Selective Retailing inched lower by 2% on a reported basis and advanced 5% organically, with performance driven by sustained organic revenue growth from Sephora.

• The group’s gross profit margin expanded from 66.8% to 67.1%, driven by good cost control.

• Operating profit saw a 4% decline, with the margin contracting from 22.6% to 22.5%, primarily driven by a margin contraction in Fashion and Leather Goods (34.1% versus 34.7%), which contributes about 71% of operating profit. All other segments saw margin expansion, showing that, although LVMH is sufficiently diversified from a revenue perspective, operating income is still primarily led by Fashion and Leather Goods’ soft luxury exposure.

• Group net profit for the period was flat, with earnings per share moving slightly higher by 0.8%.

• Overall, the results were not surprising and were mostly in line with consensus expectations, given the group’s exposure to soft luxury. However, management also highlighted that soft luxury remains the most volatile part of the luxury sector, while hard luxury, particularly jewellery, is more defensive, with strong brand equity supporting revenue gained by the sale of watches.

Analyst thesis

Our recommendation is based on:

• LVMH Moët Hennessy Louis Vuitton SE’s (LVMH’s) diversified global exposure across soft and hard luxury, together with its luxury beverages business, provides resilience against changes in input costs and consumer demand trends. relationships.

• Strong equity market performance in recent years has supported spending by high-net-worth individuals through the wealth effect.

• The business is well-positioned to benefit from a recovery in demand for soft luxury, particularly within its Fashion and Leather Goods segment, should geopolitical tensions ease. However, this depends on successful brand innovation and development, as well as external forces that can influence consumer demand.

• Continued brand strength supports customer retention and reinforces long-term growth.

• The valuation level remains attractive based from a P:E perspective, but the market could be pricing in overarching geopolitical risk and its impact on markets, along with the luxury sector consumer’s appetite for spending.