LVMH will announce its first half of 2025 results on July 24, after Euronext Paris closes. With sales of EUR 84.7 billion in 2024, investors will focus on indications from executives about American, Chinese, and European consumer health. The group’s share price has underperformed the Morningstar Global Luxury Goods index.

Analyst Jelena Sokolova expects first-quarter trends to continue into the second quarter, with no recovery for luxury players. First-quarter sales fell by 3% with a 5% decline in fashion and leather goods and a 9% drop in wines and spirits. First-half sales are expected to be EUR 39.89 billion, with an operating income of EUR 9 billion.

Louis Vuitton is expected to outperform the industry in sales growth, while uncertainty surrounds trade war impacts and currency trends. The health of the Chinese consumer is crucial, and cross-border sales are closely monitored. Demand for champagne and cognac is affected by trade tensions between Europe, the US, and China.

LVMH’s fair value was reduced to EUR 620 per share, with a wide economic moat due to strong brand power. Pricing power in the fashion and leather division is high, with Louis Vuitton’s operating margin around 50%. The brand’s ability to raise prices without affecting volumes showcases its strength.

Financially, LVMH is solid, with net debt at around 1 times EBITDA. The company’s financial structure is appropriate, with solid operating cash flow and capital expenditure in line with historical levels. The Morningstar Uncertainty Rating for LVMH is Medium, with risks related to economic slowdown and challenges in the luxury goods industry.

Read more at Morningstar: What to Expect From H1 2025 Earnings