Despite a profit dip driven by fashion sales and Japan’s slowdown, investors respond positively to signs of recovery, new factory plans, and steady leadership
LVMH shares rose 3.9% on Friday, closing at €488.70, after the company released its first-half financial results. Though profit was down—net income fell 22% to €5.7 billion—investors seemed reassured by the company’s outlook and recent moves.
The drop in profit was largely due to slower performance in LVMH’s fashion and leather goods division, including Louis Vuitton, Dior, and Celine, along with a steep decline in sales in Japan. Still, other parts of the business held up better, with several divisions meeting or exceeding forecasts, which helped reassure investors.
Deutsche Bank called the results better than expected, and highlighted early signs of recovery in China, along with steady demand for LVMH’s core brands. With the first half behind them and some of the challenges already factored in, analysts suggested that investors may be starting to feel more cautiously optimistic.
Bernard Arnault also gave markets something to latch onto by announcing plans to open another Louis Vuitton factory in Texas, reinforcing the company’s commitment to U.S. production despite ongoing trade tensions. He also confirmed that LVMH has no intention of selling its wines and spirits division, even though that part of the business has faced some challenges recently.
Since the start of the year, Arnault’s family holding companies have quietly increased their stake in LVMH, purchasing over a billion dollars’ worth of shares. This steady investment is moving them closer to owning a majority of the company by early next year—a move that has not gone unnoticed by the market.
LVMH stock is still down more than 23% this year, but Friday’s response suggests the market is starting to refocus on the long game, where a steady hand and brand resilience still count for a lot.