LVMH Moët Hennessy Louis Vuitton reported €10.5 billion in Fashion & Leather Goods revenue for Q2 2025, marking the division's return to organic growth after two consecutive quarters of contraction. The 4.2% year-over-year increase represents the first sequential acceleration since Q2 2023. Loro Piana, the group's cashmere and fine-fabric house, delivered what LVMH termed "another excellent performance" without disclosing standalone figures—language the group reserves for brands exceeding double-digit growth. Zegna, operating independently but serving as a luxury menswear proxy, grew 16.5% in the same period.
The inflection arrives eight months after LVMH's January guidance reset, when the company acknowledged that Chinese consumer spending on luxury had not recovered as forecast. Q2 marks the first quarter where Greater China sales for the Fashion division turned positive, albeit at low-single-digit growth. Japan contributed €1.8 billion to the quarter, up 22% in constant currency, driven by yen weakness and sustained tourist inflows. The United States grew 3.1%, decelerating from Q1's 6.8% pace as aspirational consumers pulled back on entry-price leather goods.
Loro Piana's acceleration matters because it validates LVMH's thesis that ultra-luxury—goods priced above €5,000 per item—operates on a different demand curve than accessible luxury. The brand's cashmere coats and vicuña fabrics carry entry prices starting at €8,500, insulating it from the trade-down pressure affecting Louis Vuitton's €1,200 Neverfull totes. LVMH has quietly expanded Loro Piana's retail footprint by 18% over the past twelve months, opening 14 new stores in cities with household incomes exceeding $250,000 median. The strategy mirrors Hermès' playbook: constrain supply, raise prices annually, and let scarcity do the work.
The Q2 print creates a tension for allocators. LVMH's stock trades at 22x forward earnings, a 14% discount to its ten-year average of 25.6x, pricing in continued Chinese weakness. If Q2 represents an actual inflection rather than a one-quarter anomaly, the multiple re-rates toward 24x within two quarters, implying €920 per share from the current €780. The risk is that Q2's growth came from price increases—LVMH took 6-8% across its fashion portfolio in March—rather than volume. The company does not break out unit sales, but third-party data from Chinese customs shows luxury goods imports up only 1.2% by weight, suggesting most of the revenue gain is price.
Operators should watch three signals before November's Q3 report. First, whether Loro Piana's momentum holds through the September wholesale orders, which feed Spring 2026 retail; buyers typically commit 60% of seasonal budgets by late September. Second, whether Louis Vuitton's new creative director—appointed in May—stabilizes the brand's €9 billion handbag category, which declined 3% in Q1. Third, whether LVMH accelerates store openings in India, where the company operates only 22 stores despite a luxury market growing 18% annually. The group's July investor call hinted at "selective expansion in underpenetrated markets," naming Mumbai and Bangalore.
LVMH's next catalyst is the September 12 investor day in Paris, where management will guide on full-year margin expectations for Fashion & Leather Goods. The division operated at 37.2% EBIT margin in Q2, down 180 basis points year-over-year, as the company absorbed higher cashmere costs and invested in digital infrastructure. Loro Piana's margins run 400-500 basis points above the division average, meaning its acceleration should lift the blended margin in Q3 if the trend continues.
The takeaway
LVMH's fashion division inflection hinges on whether Loro Piana's ultra-luxury momentum offsets Louis Vuitton's volume pressure through year-end.
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