Group 1 - Bernard Arnault, the CEO of LVMH, has been visiting China for three consecutive years, indicating the importance of the Chinese market for luxury brands [3] - LVMH, which owns brands like Louis Vuitton, Dior, and Tiffany, is facing challenges as the global luxury market is cooling down, with a projected decline in the number of luxury consumers from 400 million in 2022 to 350 million by the end of 2024 [3][4] - The luxury goods market is expected to see a total consumption of approximately €1.48 trillion in 2024, reflecting a year-on-year decline of 1%-3% [3] Group 2 - LVMH's revenue is projected to decline by 4% year-on-year to €39.81 billion in the first half of 2025, with net profit decreasing by 22% to €5.69 billion [3] - There is a growing interest among Chinese consumers in local brands, with LVMH planning to continue investing in China despite the market slowdown [4] - The overlap in consumer demographics between local brand Lao Pu Huang Jin and international luxury brands like LV and Cartier is significant, with a 77.3% overlap rate [4]

Group 1 - Sales in the perfume and beauty sector decreased by 4% compared to the second quarter of the previous year, with the Asia-Pacific market (excluding Japan) showing relatively slow growth [2] - LVMH's beauty-related business declined by 1%, with both the Asia-Pacific and Japanese markets experiencing year-on-year decreases [3] - Kering Group reported a 7% decline in sales in China, Hong Kong, and Macau, with mainland performance being particularly weak [3] Group 2 - Kering Group's overall revenue for the first half of 2025 was €7.587 billion (approximately ¥62.918 billion), a reported decline of 16%, with net profit plummeting by 46% to €474 million (approximately ¥3.930 billion) [8] - Kering's main brand Gucci saw a significant profit drop of 52%, with expectations of closing 80 stores, up from an initial estimate of 50 [9][13] - Kering's beauty segment, however, showed growth, with a 9% increase in revenue for the first half of the year, driven by the performance of Creed perfume [14][16] Group 3 - The luxury goods market is facing a slowdown, with LVMH and Kering both reporting declines in operating income and net profit for the first half of 2025 [20] - The Asia-Pacific region experienced the largest decline, with Kering's sales down by 22% year-on-year [26] - The Japanese market also showed significant declines, with LVMH's sales down 15% and Kering's down 20% [31] Group 4 - Despite the challenges, the luxury beauty market is projected to grow, with a compound annual growth rate (CAGR) of 5.80% from 2023 to 2030 [32] - Kering has issued €750 million (approximately ¥6.218 billion) in bonds to enhance financial flexibility for expanding its beauty product portfolio [35] - Collaborations for beauty product lines are becoming common, with LVMH partnering with Pat McGrath and Prada with L'Oréal [36]

Core Viewpoint - Kering Group reported a significant decline in net profit and sales for the first half of 2025, indicating ongoing struggles in the luxury goods market, particularly with its flagship brand Gucci [1][2]. Financial Performance - Kering's net profit fell by 46% to €474 million in the first half of 2025, down from €878 million in the same period of 2024 [1]. - Sales decreased by 16% to €7.6 billion in the first half of 2025 [1]. - Gucci's sales dropped by 26% to €3 billion, compared to over €4 billion a year earlier [2]. Brand Performance - The performance of Kering's brands varied, with Saint Laurent's revenue declining by 11% to €1.288 billion, while other brands saw a 15% drop to €1.459 billion [1]. - Bottega Veneta experienced a 1% revenue increase to €846 million, contributing 11% to the group's total revenue [1]. - Kering's eyewear and beauty segments grew by 2% to €1.092 billion, with beauty revenue increasing by 9% [1]. Market Conditions - The luxury goods market is facing a slowdown, with weakened consumer confidence and adverse currency fluctuations impacting tourism [2]. - The Asia-Pacific region (excluding Japan) and Japan experienced the most significant declines in sales [2]. - A strong euro negatively affected Kering's revenue growth by nearly 1% [2]. Strategic Changes - Kering appointed Demna, formerly of Balenciaga, as the creative director for Gucci in hopes of revitalizing the brand [2]. - Gucci's spring/summer women's fashion show scheduled for September has been postponed to March next year, with a new collection set to be launched [2]. Tariff Implications - The U.S. and EU have agreed to impose a 15% tariff on European products exported to the U.S., which could impact Kering's sales in North America, accounting for 24% of its revenue [3]. - Kering's CFO stated that the impact of tariffs is manageable and may lead to price adjustments in the fall [3].