LVMH shares have sunk after the luxury giant reported a lacklustre first quarter of trading in 2025.
A downturn in beauty product sales in the US and lingering challenges in China resulted in sales declining 3% to €20.3bn in Q1, causing shares to fall 5.2% in early trading on 15 April.
The company’s Perfumes & Cosmetics division saw overall flat growth during the quarter, with sales falling slightly to €2.1bn.
The category’s downturn was stymied by a strong fragrance performance, which boosted sales of Christian Dior’s Eau de Parfum J’adore, Dior Homme and La Collection Privée.
LVMH claimed innovations in make-up within Forever and Dior Addict, as well as skin care, also contributed to the maison’s performance.
Guerlain was bolstered by the latest additions to its Aqua Allegoria and L’Art & La Matière fragrance lines, as well as the relaunch of its Rouge G lipstick in 2024.
Selective Retailing also took a hit during the quarter and dropped to €4.2bn, representing a 1% decrease on an organic basis and stable revenue on a reported basis.
Sephora shored up the category’s weaknesses with strong sales from its own product range.
The beauty retailer’s other marketing activities, such as the premiere of its first global film at the Sundance Film Festival, were praised by LVMH’s Director of Financial Communications Rodolfe Ozun.
“This encapsulates Sephora’s values and role as a catalyst for emotions and creativity,” added Ozun.
The poor first quarter follows LVMH beating analyst predictions in 2024 when it posted better-than-expected revenue growth for the full financial year.
The luxury giant said in a statement that it reported a 1% revenue increase to €84.7bn in the face of a “challenging economic and geopolitical environment”.
This exceeded the €84.38bn figure forecasted by analysts at the London Stock Exchange Group.
Despite the Q1 sales slump, LVMH stated it showed “good resilience” during the quarter despite the “disrupted geopolitical and economic environment”.
And on the back of China’s woes and Donald Trump’s tariffs plunging the global economies into uncertainty, Cécile Cabanis, CFO of LVMH Group, appeared unfazed during the company’s investor call.
“We continue to face macro uncertainties and lack of visibility on external factors, and in that context, we remain confident while staying, of course, alert and vigilant,” said Cabanis.
“The cycle continues its normalisation phase after years of exceptional growth, the best way through [the] downturn cycle is to stay focused.
“As far as we are concerned, it means [we] continue to deliver the best product with the highest level of quality and excellence.”
LVMH is not the only company that has faced challenges in demand for luxury goods.
Estée Lauder Companies and Kao both cited a reduced demand for prestige beauty, particularly in mainland China, as the reason for their lagging sales in 2024.
Japanese beauty giant Shiseido’s annual operating profits, meanwhile, plunged 73.1% last year, with the slump attributed to a drop in consumer spending in key market China.
L’Oréal, however, is looking to buck this trend after announcing its aims to grow 5% in China in 2025.
The optimistic outlook follows “encouraging signs” so far this year from the world’s second-largest beauty market, said L'Oréal’s North Asia and China CEO Vincent Boinay.