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The information provided in this blog is for informational purposes only and should not be considered as financial, investment, or professional advice. The valuations and analyses presented here are based on publicly available information.
Dear reader,
You asked for it, and here it goes! We continue our journey through the six business groups of LVMH. So far we have covered:
Series #1 – Wines & Spirits: the roots of the Group, now its weakest division under a turnaround led by the prior Group CFO.
Series #2 – Fashion & Leather Goods: the crown jewel, with Louis Vuitton and Christian Dior, the two largest brands in the luxury space with Hermès and Chanel.
Series #3 – Perfumes & Cosmetics: today’s post.
Series #4 – Watches & Jewelry, Series #5 – Selective Retailing and Series #6 – Other Activities will follow.
Perfumes & Cosmetics is probably the most misunderstood division of the Group. It is large (€8.2 billion of revenue, bigger than Wines & Spirits), it owns the best-selling fragrance in the world, and yet it is the smallest contributor to profits. At first sight, the numbers look disappointing. But that’s only half of the story.
Executive Summary
The segment generates €8,174 million of revenue in 2025 — 10% of the Group — and €727 million of profit from recurring operations, only ~4% of the profit generated by the five business groups.
However, it generates a ver modest operating margin of 8.9%. The segment has never earned more than 11.3% in the last 20 years, and it earns roughly half of what peers like L’Oréal Luxe (22.4%) or Puig (16.1%) report.
But capital-light: capital employed is only €2.3 billion (28% of revenue). The result is a ROCE of ~23%, far above other segments like Wines & Spirits (~8%).
Revenue has grown at a 6.6% CAGR since 2004. Organic growth was negative in only two years out of 23 (2009 and 2020). However, growth has stalled: +4% in 2024, 0% in 2025 and 0% in H1 2026. In fact, revenue declined by -4% during 1H 26 due to FX.
The engine is Parfums Christian Dior: Sauvage is the best-selling fragrance in the world, and according to Mr. Arnault, someone buys a Dior lipstick every 2 seconds.
Strategic role: for LVMH this is not only a profit center. A €150 bottle of Sauvage or a ~€50 Rouge Dior is, for millions of people, the first Dior product they ever buy. The division is the entry door to the Dior brand.
