With revenue of €38.64 billion and current operating profit of €8.69 billion, LVMH reported organic growth but a slight decline on a reported basis. While the international environment remains turbulent, attention inevitably centred on fashion and leather goods. Generating €18.15 billion over the first six months of the year- down 1% organically and 5% on a reported basis- the division saw its current operating profit contract by 7% to €6.195 billion. However, the flagship division returned to 1% organic growth in the second quarter.
See fashion show
Christian Dior – Spring-Summer 2026 – Haute Couture – France – Paris – ©Launchmetrics/spotlight
Cécile Cabanis, the group’s chief financial officer, delivered a detailed presentation to analysts, in the absence of Bernard Arnault– whose handling of his children’s ambitions and the future of the group’s governance have recently been the subject of press reports- and of Stéphane Bianchi. Asked about the underlying sales dynamics, the executive offered a clear breakdown: “As regards the price-volume-mix in Fashion & Leather Goods, if you look at the second quarter, growth stands at 1%. Excluding the impact of the Middle East, it is 2%. Our price increases are moderate, so you can consider that the overall volume-mix effect has remained stable. There are no major shifts on that front.”
In a sector where aggressive post-Covid price rises have at times alienated certain customer segments, LVMH says it is stabilising its pricing structure while maintaining its execution. Cécile Cabanis also underlined the strength of the group’s industrial fundamentals, highlighting the trajectory of the gross margin, which stood at 67.1% overall, an improvement of 30 basis points compared with the previous financial year. This increase has enabled the division to maintain a very high operating margin of 34.1%, compared with 34.7% a year earlier.
Beyond pricing stability, the CFO, alongside Rodolphe Ozun, director of financial communications, highlighted momentum across the portfolio. She noted that both Louis Vuitton and Christian Dior were “in positive territory in the second quarter,” with Dior performing slightly above the division average. The group flagged strong performances from Loro Piana, driven by its Nomadic Reverie collection, and Rimowa, buoyed by the success of the Classic Titanium and Grid suitcases- both above the division’s average. LVMH also noted that Berluti made a positive start to the year. Not all trends, however, point to growth. The current euphemism for a slowdown in momentum is “sequential improvement”: Celine and Fendi duly recorded this improvement last quarter compared with the previous nine months.
Financial results presentations naturally focus on the figures… but these are often the outcome of strategic choices. So what impact has Jonathan Anderson had at Dior? As analysts questioned potential production delays- linked to the internalisation of certain workshops and the ramp-up of the Irish designer’s collections- management sought to clarify the situation. “When you embark on a creative renewal and are in a period of transition, it’s always a little more complex for your supply chain. I won’t give any theoretical figures,” admitted Cécile Cabanis, before confirming that the Christian Dior machine was up and running. “What we’re seeing shows that we’ve achieved excellent results, that the trend is positive and that it’s gathering pace. I think that’s what matters.”
According to management, the Parisian label’s commercial drivers are therefore firmly on track at the brand led by Delphine Arnault. The house’s overall customer base grew over the half-year, driven by double-digit growth among American and Japanese shoppers in the second quarter. Leather goods and women’s ready-to-wear are reportedly benefiting from strong enthusiasm for Jonathan Anderson’s designs and the reinterpretation of iconic models, such as the Lady Dior bag.
Watches and jewellery: Tiffany and Bulgari emerge as key drivers of growth
The Watches & Jewellery division has been the group’s most dynamic so far this year. It recorded revenue of €5.22 billion, up 9% on an organic basis and 3% on a reported basis, with current operating profit rising by 9% to €831 million, bringing the operating margin to 15.9%.
“In watches and jewellery, momentum was driven mainly by Tiffany and Bulgari in jewellery,” explained the chief financial officer. “In the second quarter, both Bulgari and Tiffany grew by between 10% and 15%, with a very strong performance from their icons. Growth accelerated across the Americas, Japan, and South Korea.”
Detailing the mechanics of Tiffany & Co.’s transformation, the chief financial officer highlighted the direct impact of the refurbishment of the physical retail network and the overhaul of product ranges. “It is really the part that we have transformed that is driving growth at Tiffany, as around 40% of the network has now been refurbished and is growing much faster than the legacy part, which remains negative. Certain icons such as HardWear are posting growth of 75%, and Knot nearly 50%. There is a great deal of success and momentum around these icons. For Bulgari, success truly extends across all of the icons. Watches, as a standalone category, remained slightly negative in the second quarter.”
Sephora continues to grow
A major division by volume, Selective Retailing posted revenue of €8.41 billion for the half-year, up 5% organically, down 2% on a reported basis, generating current operating profit of €893 million, a 2% rise, with a margin of 10.6%. The division relies primarily on Sephora’s excellent performance.
“At Sephora, when we look at growth, it’s probably roughly half and half between expansion- which includes enlarging stores and opening in countries such as Belgium and Croatia- and like-for-like. We are seeing very strong growth across all markets, including the United States, particularly for exclusive brands.”
Shutterstock
Le Bon Marché, for its part, is maintaining its momentum and has posted a positive trajectory over the first six months of the year. The management of the Left Bank department store, led by Patrice Wagner, will, however, be under close scrutiny in the second half: its proposals for the relaunch and repositioning of La Samaritaine are expected to be unveiled shortly.
By contrast, DFS’s travel retail business is feeling the impact of strategic restructuring and asset disposals. The completion of the sale of operations in Greater China resulted in a negative scope impact of 3 points on the division, weighing on the group’s overall growth by 1 point in the second quarter.
In the Perfumes & Cosmetics segment, which generated sales of €3.91 billion and operating profit of €417 million, LVMH’s management reports a streamlining of its sales channels. “We have chosen, for Perfumes & Cosmetics and some of our brands, to be very selective in distribution and to pay extremely close attention to promotions,” explained the executive. “There may be short-term growth opportunities, but these would come at the expense of brand value. We want to continue building the desirability and value of our houses over the long term.”
Strong cash flow
LVMH managed to maintain its overall operating margin at 22.5%, despite a severe negative currency impact of nearly €700 million on current operating profit. Bernard Arnault’s empire reaffirmed its commitment to cost discipline. Net profit attributable to the group was therefore stable at €5.7 billion. This discipline enabled the group to generate free operating cash flow of over €4.1 billion in the first six months of the year. It achieved a net debt reduction of nearly €2 billion compared with the first half of the previous financial year. The net debt-to-equity ratio (gearing) fell to 11.8%, giving the group the flexibility to maintain its targeted investments, pay an interim dividend of €5.50 per share in December, and approach the second half of the year with confidence.
Copyright © 2026 FashionNetwork.com All rights reserved.