Core Viewpoint - LVMH reported a 5% decline in annual revenue for 2025, attributed to currency fluctuations and reduced demand in various markets amid geopolitical and economic disruptions [1][2]. Financial Performance - Annual revenue for LVMH was €80.80 billion, down 5% from the previous year [1]. - Profit from recurring operations decreased by 9% to €17.75 billion [1]. - Net profit attributable to the group fell 13% to €10.87 billion [2]. - Operating free cash flow increased by 8% to €11.33 billion [2]. - Net financial debt decreased by 26% to €6.85 billion by year-end [2]. Regional Performance - Mixed regional performance was noted, with Europe experiencing a downturn in the second half of the year, while the US saw growth driven by domestic demand [2]. - Japan's spending retreated compared to the previous year, while the rest of Asia returned to growth in the latter part of the year [3]. Division Performance - Wines and spirits saw a 5% organic revenue decline, with profit from recurring operations down 25% due to weaker cognac demand and trade tensions [3]. - Fashion and leather goods reported a 5% organic revenue decline and a 13% drop in operating profit, maintaining an operating margin of 35% [4]. - Perfumes and cosmetics had flat organic sales but an 8% rise in operating profit [4]. - Watches and jewellery achieved 3% organic growth, while selective retailing posted a 4% organic revenue increase and a 28% jump in operating profit, driven by Sephora [4]. Corporate Developments - Corporate tax payments totaled €5.5 billion for the year, with approximately half paid in France [5]. - DFS signed an agreement with China Tourism Group Duty Free to acquire its operations in Greater China, including Gallerias in Hong Kong and Macao [5]. - Despite ongoing geopolitical and macroeconomic uncertainty, LVMH expressed confidence for 2026, focusing on brand development, innovation, and investment [5].

Industry Overview - The global luxury sector has faced challenges in 2025 due to uneven consumer demand, currency volatility, and a slowdown in key markets like China [1] - Signs of stabilization are emerging as analysts expect easing financial conditions and renewed spending by high-net-worth consumers heading into 2026 [1] Company Analysis: LVMH Moët Hennessy Louis Vuitton - LVMH is the world's largest luxury conglomerate, benefiting from a dominant market position and broad exposure across various segments including fashion, leather goods, jewelry, cosmetics, and wines and spirits [2] - The company's diversified structure allows it to offset weaknesses in one segment with strengths in another, maintaining robust margins through brand equity and pricing power [2] - Analysts expect the fashion and leather goods division to remain a key earnings driver, supported by global demand and continued investment in brands [3] - LVMH's exposure to multiple regions, including the United States, Europe, and Asia, enhances its ability to navigate uneven economic conditions [3] Company Analysis: Compagnie Financière Richemont - Compagnie Financière Richemont is viewed as an attractive luxury stock for 2026, with a strong focus on high-end jewelry and watches [6] - Brands like Cartier and Van Cleef & Arpels are benefiting from resilient demand, as jewelry has historically performed better during economic slowdowns [7] - Richemont is enhancing its operational efficiency and digital capabilities, which could support margins as sales recover [8] - Recent upgrades from major banks indicate growing confidence in Richemont's positioning to capture a recovery in luxury spending while maintaining its premium brand status [8] Conclusion - As macroeconomic pressures ease and consumer confidence improves, both LVMH and Richemont appear well-positioned to benefit from a renewed upturn in high-end demand [11]

Core Viewpoint - Investors are disappointed with the new trade deal between the E.U. and the U.S., which has negatively impacted LVMH's stock performance and reflects broader concerns in the luxury sector [1][2]. Group 1: Trade Deal Impact - The E.U. and the U.S. agreed to a 15% tariff on European goods, which has been criticized by France as a "submission" [3]. - The tariff agreement avoids a trade war but increases costs for luxury goods, which are already facing challenges [3]. - The trade war is expected to affect LVMH's fashion and leather goods segment, as well as wines and spirits, with trade-related pressures in China further hurting demand [5]. Group 2: Financial Performance - LVMH reported a 4% decline in revenue for the first half of the year, with operating profit falling 15% to €9 billion, primarily due to weakness in Asia [4]. - Organic revenue in fashion and leather goods, which constitute nearly half of LVMH's sales, declined by 7% [4][5]. Group 3: Future Outlook - Investors are looking for a potential trade deal with China, which could benefit LVMH, as China accounts for about a quarter of the global luxury market [6]. - There is disappointment that luxury goods were not excluded from the U.S. trade deal, but a strong economy and stock market may mitigate the impact of import taxes [6]. - LVMH possesses a strong portfolio of brands that should provide long-term stability, although short-term volatility is expected [7].