LVMH (LVMHF) , which owns beauty retailer Sephora and top luxury brands such as Fendi and Dior, has noticed a startling consumer trend that is starting to impact sales, and it is flagging the main sources of the problem.
In LVMH’s first-quarter earnings report for 2025, it revealed that its U.S. sales “saw a slight decline” while overall sales in perfumes and cosmetics remained flat during the quarter.
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During an earnings call on April 14, LVMH Chief Financial Officer Cecile Cabanis said the company’s performance in the U.S. faced a “moderate deceleration” of 3% during the quarter despite increased sales of fashion, leather goods, watches, and jewelry.
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She noted that Sephora was one of the main reasons for the decline in U.S. sales.
“Sephora, on the other hand, faced very challenging comps after growing double-digit last year, and this explained the sequential deceleration of the U.S. market at group level,” said Cabanis.
LVMH CFO flags why Sephora sales are weakening
She added that one of the challenges contributing to Sephora’s lower U.S. sales was increased competition from Amazon, which has been “very aggressive” about lowering prices.
“In the U.S., we have a bit less momentum when it comes to e-commerce, especially because Amazon is being very aggressive … mostly regarding price, and we try to avoid this technique,” said Cabanis.
She also highlighted that Sephora is suffering from an overall “softer demand in beauty,” which she said may be partially due to “less positive economic cycles and uncertainties” in recent weeks.
LVMH contemplates a harsh move amid consumer anxiety
Many consumers have been opting to pull back their spending in light of President Donald Trump’s recent tariff announcements.
Tariffs are taxes companies pay to import goods from overseas, and the additional cost is often transferred to consumers through increased prices.
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On April 2, Trump announced a 10% “baseline” tariff on all countries importing goods to the U.S., with roughly 60 countries seeing higher tariff rates.
However, on April 9, he enforced a 90-day pause on reciprocal tariffs on all countries (except China), dropping them to a universal rate of 10%. He later raised tariffs on China to a whopping 145%.
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According to a recent survey from market research company Numerator, 83% of consumers said they are adjusting their shopping habits to prepare for the high prices Trump’s tariffs could potentially cause. Some of these changes include searching for sales and coupons, delaying purchases, and buying fewer imported goods.
Amid this change in consumer behavior, Cabanis warned that LVMH may implement price increases as a result of tariffs; however, these increases “will not be one-size-fits-all.”
“I think we all need to stay very calm because we are in unknown territories,” said Canabis. “And we are now in a process with 90-day suspension period, which we can hope will enable some negotiation and bring some maybe positive outcomes. The world is never certain. Having said that, this is not under our control. So back to what is under our control, it’s price increase is one part.”
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