LVMH Reports Steepest Profit Drop in Wine and Spirits Unit

LVMH’s Wines & Spirits division recorded the sharpest decline in recurring operating profit among all its business units in the first half of 2025, as cognac sales slumped in key markets despite a modest rebound in champagne and still wine.

Recurring operating profit for the segment dropped 33% year-over-year to 524 million euros (US$571 million), while revenue fell 7% on an organic basis to 2.588 billion euros (US$2.82 billion), the French luxury group reported in its first-half earnings statement.

Champagne and wine generated 1.397 billion euros in revenue, up 2% organically from a year earlier. Cognac revenue dropped to 1.190 billion euros, down 15% year-over-year. Both categories posted declines in operating profit.

The company attributed the growth in champagne and wine to improved market conditions in the United States and Europe during the second quarter, along with solid performance from Provence rosé wines. A series of marketing campaigns, including Moët & Chandon’s renewed role as the official champagne of Formula 1 and a limited-edition launch with musician Pharrell Williams, also helped boost sales.

Cognac, however, continued to face pressure from what the company described as “uncertainties related to threats of trade tensions,” which weighed on demand in both China and the U.S.

In China, after more than a year of anti-dumping investigation into brandy and cognac producers, the Chinese government spared 34 companies including Hennessy with a pricing guarantee. 

To maintain consumer interest and support brand desirability, LVMH said its wine and spirits maisons launched large-scale promotional initiatives in the first half while keeping a focus on cost control.

Meanwhile, in May, the group announced plans to cut 1200 jobs from its wine and spirits division to cut costs amid the slumping sales as part of broader efforts to reduce operating costs. 

Looking ahead, the company warned that geopolitical and macroeconomic uncertainties remain high but said it remains committed to a long-term strategy centered on brand strength and product excellence.

“In an uncertain geopolitical and economic environment, the Group remains confident and will maintain a strategy focused on continuously enhancing the desirability of its brands,” LVMH said. “Drawing on the exceptional quality of its products and excellence in retail, the Group will continue to reinforce its global leadership in luxury goods in 2025.”

LVMH lost its title as the world’s most valuable luxury company to Hermès following a disappointing first quarter. Its shares have fallen nearly 30% over the past 12 months, erasing almost €100 billion ($118 billion) from its market capitalization.