Few companies in the world can boast of simultaneously managing Louis Vuitton, Dior, Tiffany, Bulgari, Moët & Chandon and Sephora under one roof. LVMH has been doing it for decades, and its numbers between 2016 and 2025 tell a story of dominance, solidity and some shadows that should not be ignored.
The model: many brands, one brain
Bernard Arnault has been at the helm of LVMH since 1989. Under his command, the group went from being the merger of two French houses to becoming the largest luxury conglomerate on the planet, with surgical acquisitions—Fendi, Givenchy, Bulgari, TAG Heuer—and a recent milestone that marked a before and after: the purchase of Tiffany & Co. in 2021 for about $16 billion.
The Arnault family controls 50.01% of the shares. It is not a minor detail: when the owner has half of his assets in the company, the interests are naturally aligned with the rest of the shareholders.
The numbers that matter
The leather and leather goods business – where Louis Vuitton and Dior live – alone represents 47% of sales. It is the driving force of the group: high brand power, low production costs and margins that other divisions cannot match. This is followed by selective retail (Sephora, with 23%) and watches and jewelry (13%).
Geographically, LVMH is distributed almost symmetrically: 25% in Europe, 25% in the US and just over 25% in Asia (without Japan). That diversification is a real cushion when a region is weak.
Between 2016 and 2025, sales grew at an average rate of 10% per year and net profit by 20% per year. The net margin always remained above 10%, with an average of 14.25%. These are very solid figures for a company of this size.
The shadow: two years of setback
The trend, however, has cooled. Since the peak of 2023 – a year inflated by the post-COVID rebound effect and the full incorporation of Tiffany – sales have fallen 1.7% in 2024 and 4.6% in 2025. Net profit has fallen more sharply: 17% and 13% respectively. ROE has gone from 24% to 15% in just two years.
It is not a crisis. But it is a sign that the tailwind that pushed luxury during the post-pandemic era has subsided.
How do you compare to your rivals?
Compared with Kering (Gucci, Balenciaga), LVMH comes out very well. Kering has suffered a collapse: its net margin fell to virtually zero in 2025 and its ROE sank from 20% to rock bottom levels. The dependence on Gucci has taken its toll.
Against Hermesthe story is different. Hermès outperforms LVMH on virtually every profitability metric, with ROAs consistently above 15%. Its extreme scarcity strategy—manufacturing less than the market demands and charging much more—gives it margins that no one in the sector can replicate. Hermès plays in another league in terms of margins, although LVMH beats it in diversification and scale.
Balance sheet and dividend: the part that does not fail
LVMH’s net financial debt is contained, with a DFN/EBITDA ratio stable between 0.5 and 0.6 since 2021. Liquidity is ample, reserves have grown at an average rate of 13% annually and inventory management has been impeccable throughout the decade.
Regarding the dividend, LVMH has been conservative in a good way: the average payout is around 48%, free cash flow has always far exceeded the dividend payment and only in 2020 was it cut (by 20%). The dividend has multiplied by three in ten years. They have also launched a share buyback program from 2021, albeit modest.
In summary
LVMH is a cash-generating machine with a healthy balance sheet, enviable diversification and a remarkable growth track record. The last two years of decline in sales and margins deserve follow-up, but do not alter the underlying diagnosis: we are facing one of the best managed companies in the world.
The question for the investor is not whether LVMH is a good company. It is. The question is at what price it is worth entering into a business whose growth has temporarily slowed and whose valuation does not always reflect that slowdown.