After four quarters of cooling demand and investor nerves, LVMH finally put points back on the board. Third-quarter revenue edged up 1% year over year to €18.28 billion—its first positive print of 2025—helped by a stabilizing China and a still-mighty Sephora, prompting a relief rally across European luxury stocks. The modest top-line lift matters less than the pattern underneath it: momentum improved in every major division, and the steep declines that dogged Fashion & Leather Goods earlier in the year narrowed meaningfully. For luxury’s bellwether, that looks like a turn.

Start with geography. Management said mainland China turned positive in the quarter, a psychological and financial swing for a sector that has spent two years digesting a post-pandemic comedown and a property-market funk. Asia ex-Japan showed “noticeable” improvement, even as Europe—flattered last year by tourist splurges—softened on currency effects. Those nuances explain why LVMH’s headline growth was slim while the mood brightened: the company’s largest incremental profit pool is Chinese and travel retail demand, and both stopped deteriorating.

The divisional mix also told a better story. Selective Retailing—driven by Sephora—grew a brisk 7% organically, while Perfumes & Cosmetics advanced 2%, and Watches & Jewelry ticked up 2%. Wines & Spirits, which has labored under a long cognac destock in the U.S. and trade frictions in China, managed a slight 1% organic gain in the quarter. The problem child remains Fashion & Leather Goods, where revenue fell 2%—but that’s a marked improvement from a 9% drop in Q2. In other words, the engine is still downshifting, just far less abruptly.

Sephora deserves more than a supporting-actor credit here. The beauty chain’s flywheel—exclusive launches, experiential retailing, and a sprawling loyalty base—has become LVMH’s most reliable growth vector. With market-share gains across regions and traffic boosted by buzzy brands and events, Sephora is cushioning volatility in big-ticket leather goods and jewelry, and giving the group a growth pillar that responds quickly to newness. In a consumer environment that rewards “small luxuries” over four-figure handbags, that matters.

What changed to break the lull? Partly the cycle. Price hikes across the sector did their job and then bit into elastic demand; now, with more measured pricing and easier comparisons, incremental newness can work again. LVMH has been busy on that front. Management pointed to fresh creative energy across houses and a stepped-up cadence of product and retail theater—from Louis Vuitton’s architectural “The Louis” space in Shanghai to Dior beauty launches—that rekindled local customer engagement even as tourist flows normalized. A travel-retail pickup at DFS in Macau and Hong Kong added a tailwind.

The China point is crucial. Investors don’t need a boom to rerate luxury; they just need the bleed to stop. LVMH’s CFO Cécile Cabanis said the mainland turned positive in Q3 and flagged “gradual sequential improvement” as the more realistic path forward. That’s a sober message—and a credible one—because it also acknowledges the remaining headwinds: FX, geopolitics and an American consumer still digesting earlier price inflation. A one-percent quarter would hardly be victory in frothier times; for 2025, it is the proof of concept that the downside scenario is fading.

Nine-month revenue of €58.1 billion is still 2% lower organically than a year ago, a reminder that the hole isn’t fully filled. But it’s equally telling that every division improved sequentially in Q3. In fashion, the difference between down 9% and down 2% is the difference between cutting into muscle and starting to heal. In beauty and retail, steady mid-single-digit gains look sustainable given the pipeline and Sephora’s operating model. Watches & Jewelry’s small uptick, with Tiffany’s ongoing concept roll-out and events calendar, suggests the category can hold its line while big-ticket appetites normalize.

The market read the update as more than a blip. LVMH shares surged double-digits and dragged peers higher, a sector-wide sigh of relief that the bellwether’s worst quarter-over-quarter declines are behind it. The rally won’t endure if holiday demand disappoints, but investors were cued to watch the slope, not the absolute level—and that slope improved.

Is the turn durable? The company isn’t promising a V-shaped snapback. Management is leaning into “self-help”—creative resets at key houses, sharper merchandising, and high-impact retail experiences—while keeping investment steady rather than squeezing margins for a quick fix. That’s the luxury playbook that built LVMH’s scale advantage in the first place. If China stays merely stable, if Sephora keeps comping positively, and if fashion’s decline continues to narrow, the group has enough engines to re-accelerate as comps ease into 2026. For now, Q3 shows a flywheel starting to spin again—and for a sector that trades on momentum and mystique, that’s exactly what needed to turn.

Stock Price vs. EPS Chart for LVMH

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