LVMH, the luxury group that owns Sephora and Dior, published its 2025 annual results on January 27, 2026, and they confirmed a difficult year: full-year operating profit fell about 9 percent, per Reuters, even as fourth-quarter sales of roughly €23 billion came in slightly ahead of expectations thanks to improving demand in China. For beauty readers, the numbers are a signal about how the retail environment around Sephora, Dior beauty counters, and luxury fragrance may behave in 2026.
How bad was 2025 for LVMH?
Not catastrophic, but clearly weaker than the company is used to. Per Reuters, operating profit for 2025 was expected to come in around €17.15 billion, down from €19.57 billion in 2024, with margins squeezed by factors including currency moves and cost pressures. The fourth quarter showed a fragile bright spot: sales rose about 1 percent on a comparable basis, which beat analyst expectations but is a modest pace for a group of this size.
How did investors react?
Sharply. On January 28, 2026, the day after the results, LVMH shares fell as much as 8.2 percent, briefly erasing about €24 billion in market value before recovering some of the loss, per Reuters. The sell-off reflected doubts about how quickly the luxury sector's recovery would arrive, particularly in China, rather than about any single brand.
What does this mean for Sephora and Dior beauty?
Sephora sits inside LVMH's selective retailing division, and Dior's makeup and fragrance inside its perfumes and cosmetics division, so both ultimately answer to the same profit math. When a group's overall margins compress, beauty divisions tend to feel it through tighter budgets and a sharper focus on products with proven demand, which historically means fewer speculative launches and more emphasis on proven bestsellers. Per Reuters, the group has already taken cost-cutting measures during the sales slide. None of this changes what is in the bottles overnight, but it shapes which products get shelf space at Sephora and how aggressively counters promote in the second half of 2026.
What should beauty shoppers watch next?
Two things. First, whether the fourth-quarter improvement in China continues, because a genuine luxury recovery usually pulls prestige beauty promotions and store investments up with it. Second, the first-quarter 2026 update expected in April, which will show whether January's cautious mood was a blip or a trend. If you shop fragrance and prestige makeup, pricing and promotion depth at the counters are the most practical place these corporate results become visible in your routine.
For more context, read Ulta Just Posted a Blowout Quarter: What Shoppers Should Know.
For more context, read kering 2025 results.
For more context, read e.l.f. beauty q1 fiscal 2027.