The world’s leading luxury group, LVMH, saw net profit slide 13 percent in 2025 to 10.9 billion euros (USD 13.1 billion) as an exceptional tax on large French companies weighed on its bottom line. According to LVMH, the exceptional tax resulted in a four-percentage-point increase in the group’s effective tax rate.

But sales at the company, best known for Louis Vuitton handbags, Dior fashion and cosmetic products, Guerlain fragrances, Moët & Chandon champagne and Tiffany jewelry, also dropped by five percent to 80.8 billion euros as tariffs and geopolitical uncertainty hit consumer sentiment.

Across the 2025 financial year, wine and spirits division took the hardest hit with a nine percent drop in sales amid adverse exchange-rate effects, customs duties, and constrained pricing power.

However the top fashion and leather goods division, which accounts for nearly half of overall sales, also saw an eight percent drop in sales.

Perfumes and cosmetics held up betterposting a 3% decline in sales but an 8% increase in operating profit.

In the selective distribution segment, business remained stable, with the operating margin increasing by two points to 9.7%. LVMH highlighted the strong sales momentum and performance of Sephora. The Group also continues to reorganize DFS, following the recent sale of its Chinese operations.

LVMH said it “showed good resilience and maintained its innovative momentum despite a disrupted geopolitical and economic environment” last year.

“The group’s results are solid,” said Chairman and CEO Bernard Arnaultdespite “a turbulent year both economically and geopolitically,” when presenting the results.

“Despite a geopolitical and macroeconomic environment that remains uncertain, the Group remains confident” for 2026, it added in its earnings statement.

In particular, LVMH said sales in the United States grew in the second half of 2025 thanks to solid demand.