Core Insights - LVMH reported a total revenue of €39.81 billion (approximately ¥335.12 billion) for the first half of 2025, a decline of 4% year-on-year, with operating profit down 15% to €9.01 billion (approximately ¥75.84 billion) [1][5][10] - The luxury goods sector is facing significant challenges, with the "Veblen Effect" losing its influence as younger consumers reassess the value of luxury items [3][4] - The high-end beauty segment has emerged as a key area of focus for LVMH, showing resilience with stable revenue of €4.08 billion (approximately ¥34.34 billion) in the first half of 2025 [12][13] Financial Performance - LVMH's total revenue for the first half of 2025 was €39.81 billion, down 4% from the previous year, while operating profit decreased by 15% to €9.01 billion [1][5][10] - The operating margin fell to 22.6%, a decrease of 2.5 percentage points year-on-year [5] - The Asian market (excluding Japan) saw its share decline to 28%, down 2 percentage points [1][10] Market Trends - The luxury goods market is experiencing a shift, with younger consumers increasingly questioning the traditional pricing logic of luxury items [4][5] - The beauty segment, particularly high-end cosmetics, is viewed as a potential growth driver amidst overall market contraction [12][19] - LVMH's beauty brands, including Christian Dior and Fenty Beauty, are adapting to changing consumer preferences, with Fenty Beauty showing significant growth in China [15][19] Strategic Initiatives - LVMH is focusing on brand revitalization and innovation in the beauty sector, with new product launches and a commitment to quality and desirability [17][18] - The company is restructuring its operations, including closing underperforming DFS stores and laying off staff in its wine and spirits division to reallocate resources towards beauty [21][23] - Sephora is being positioned as a key player in the Chinese market, with new brand introductions and a direct reporting structure to the global CEO [21][23]