LVMH Returns to Growth as Chinese Demand Improves

Post by : Saif Nasser

French luxury giant LVMH reported a return to growth in the third quarter of 2025, driven mainly by increased demand from China. The company, which owns world-famous brands such as Louis Vuitton, Dior, Tiffany, Moet & Chandon, and Sephora, saw its sales rise by 1% to 18.28 billion euros ($21.17 billion). This growth marks the first quarter of expansion for LVMH this year and offers a positive signal for the global luxury sector, which has struggled in recent years.

Chinese Market Recovery Helps

LVMH’s Chief Financial Officer Cecile Cabanis highlighted that Mainland China showed a noticeable improvement in the third quarter, turning positive after months of challenges. The Asia market, excluding Japan, benefited from a gradual recovery, helping to offset weakness in other regions. Cabanis cautioned that the company still faces challenges, including currency fluctuations and ongoing economic uncertainty, but expressed confidence in the new creative direction of the group’s brands.

The rise in sales demonstrates a combination of improved market conditions in China and LVMH’s internal efforts to adapt to changing consumer trends. Analysts believe the recovery may follow a U-shaped trajectory, meaning it is gradual but steady, and the group is expected to see continued improvement over time.

Fashion and Leather Division Shows Slight Decline

Although overall sales increased, LVMH’s crucial fashion and leather goods division, home to Louis Vuitton and Dior, experienced a small 2% decline compared to the same quarter last year. This was an improvement from a 9% drop in the second quarter. Analysts view this as a positive sign that the division is stabilizing after a period of heavy price hikes and reduced consumer appetite for high-end handbags.

The fashion and leather segment remains the most important for LVMH, generating more than two-thirds of the company’s profits. The positive growth in overall sales, however, reflects strength in other divisions, including jewelry, champagne, and beauty retail.

Luxury Sector Faces Ongoing Challenges

The luxury industry has been navigating a long slump following the post-pandemic boom. High prices at top labels such as Louis Vuitton and Dior have limited sales among less wealthy clients. Additional challenges include U.S. tariffs, a slow property market in China, and rising production costs for jewelry due to higher gold and silver prices.

Despite these headwinds, investors are turning more positive on luxury brands. Analysts have noted that new design creativity and efforts to offer more affordable luxury items could help attract a broader customer base and support future growth.

Investor Confidence and Market Response

LVMH shares rose sharply in response to the quarterly results, with U.S. shares up 7.5% and the company’s stock in France reflecting renewed investor optimism. Analysts from Bernstein and HSBC highlighted that the company’s performance exceeded expectations, and signs of recovery in China provided hope for the sector’s overall rebound.

Cabanis emphasized that sustained improvement will take time, but LVMH is confident in its long-term strategy of blending creativity with a flexible business approach. The group’s ability to respond to changing markets and appeal to younger, diverse consumers is seen as a key strength.

Disclaimer

LVMH’s Q3 2025 results signal a cautious return to growth for the global luxury market. Strong demand from China, combined with creative innovation and strategic management, helped the company navigate economic uncertainty. While challenges remain, the first quarter of growth this year shows that LVMH is regaining momentum, and investors are optimistic about the future of luxury brands in a slowly recovering market.