Q1 2025 LVMH Moet Hennessy Louis Vuitton SE Earnings Call
And gentlemen, good afternoon, and welcome to today's conference call I'm willing for wrong director or finishing communications of UMH and we meet E Sushi Gibbons, our chief Financial Officer.
Speaker Change: So she will start by taking you through the key highlights of the first quarter of 2025.
Speaker Change: I will then comment on performance by business groups after which this year will conclude and then we'd be happy to take your questions as a reminder.
Speaker Change: The information to be discussed on today's call. These forward looking and subject to important risks and uncertainties that could cause actual results to differ materially from these I refer you to the safe Harbor statements included in our press release and on slide two of our presentation.
Speaker Change: Turning now to our announcements our release was issued a short while ago in both French and English and he's available on the website <unk> dot com as are the slides for today's call. Let's now move on to today's topics, our first quarter figures as your own position.
Speaker Change: Children Die.
Speaker Change: Welcome and thank you for attending each pillar.
Speaker Change: Starting with slide three let me give you a few broad comments on the first three months of the yeah, well <unk> continues to demonstrate but again, let me show a few highlights first on Chinese demand on the domestic market trends were consistent with the end of last year. The main swing factor yesterday.
Speaker Change: Chinese demand in Japan as you can imagine it came in strong in absolute terms, but he cycles last year's sharp increase and therefore no longer contributes gross in a percentage point.
Speaker Change: They can come and despite a context of uncertainty preceding 30th announcement American demand for fashion and it does really.
Speaker Change: What shoes and jewelry, he made widow emptied and expedited modestly compared to the second half of last year.
Speaker Change: Stifel Undoing, the handshake any challenging comps are struggling double digit last year and this explains the sequential deterioration of the U S market in Oklahoma.
Speaker Change: Some comments is that two of us continuing to grow I will let Doug comment on the different activities. Maybe has it brought up demand. We continued to witness the cross sell our brands Dominion of innovation and creativity, when new products that are exciting and functional they performed very well.
Speaker Change: Moving now to slide four where you have been living wage for the first three months of 2025 book revenues reached 23 billion euros down 2% on the reported basis and 3% inorganic increasing a one.
Speaker Change: 1% currency impact.
Speaker Change: Slide five details due to call it pegged down I believe in using euros.
Speaker Change: As you can see as remained broadly stable or however, that's just Q1 last year Asia first three points into mix, while United States, France, and although market or was one for.
Speaker Change: This is a reflection of two one hadrian north a whole month, that's whoever the next slide.
Speaker Change: Starting with U S well that deterioration at minus 3%. Despite as I was mentioning the good performance of fashion and litho goods and watches and jewelry, Japan slightly negative at minus 1% cycling last years exceptional goes up 2%.
Speaker Change: Yeah at minus 11%, reflecting a continuing soft demand, which is consistent with the end of last year and finally, Europe continuing to display positive dynamic with a 2% growth. Although we know commend the performance of our activities in more detail.
Speaker Change: Thank juices, Sheila and will start as usual with wines and spirits.
Speaker Change: On slide nine which shows the wines and spirits business group delivered $1 3 billion euros in revenue for the first three months of 2025. This represents a 9% decrease on an organic basis versus the same period last year, an 8% decrease on a reported basis after taking into account.
Speaker Change: On a poll.
Speaker Change: Since April 1% currency effects.
Speaker Change: Broken down Shrimping and Windster rates at 0.7 billion euros in revenue over the three months period down 1% on both organic and reported basis.
Speaker Change: <unk> spirits recorded 0.6 billion euros in revenue down 17% on then we'll get into basis.
Speaker Change: 15% on a reported basis after taking into account as opposed to just 2% currency impact.
Speaker Change: On slide 10, we highlighted some of the elements, which shape the quarters with two different situations Champagne and wines, who resilience in the first three months of 2025, we saw most of the decline in volume in some being partially due to unfavorable phasing effect through distributors in Europe and.
Speaker Change: The timing of price increases in Japan, However, champagne benefited from positive price mix effect and the outcome was broadly flattish trends thus.
Speaker Change: At the start of the year was marked by the return of one additional deal.
Speaker Change: Official Champaign, a formula one once again instead of reaching every retreat on the core Jim with some big <expletive>.
Speaker Change: Well out of the global launch of a limited additional physician wants to Shlomo collection in collaboration with find Wisdoms.
Speaker Change: In connect and spirits Tennessee's first quarter reflected soft sellouts in the U S and China, we replenished inventories at all distributors level, but kept inventory days unchanged and selling was as a result, consistent which set up given the uncertainties around tariffs. We also kept a healthy level of inventory.
Speaker Change: In our local warehouses.
Speaker Change: Cases have been shipped but not sold it.
Speaker Change: Such did not have any impact on our first quarter revenue.
Speaker Change: Finally in spirits been more LNG welcome Harrison full but of the phase of its risky unveiling a 12 inch series entitled once upon a time in Scotland and thinking us I'm machines at the distributor.
Speaker Change: And Portugal benefited from the success of its tripled cost resolve rollouts.
Speaker Change: We're not turning to foshan in leather goods is on slide 12 revenue.
Revenue reach some point 1 billion euros for the first three months of 2025. This represents a 5% decrease on Gorgon basis versus the same period last year and a 4% decrease on a reported basis after taking into account a positive 1% currency impact.
Speaker Change: Moving on to slide 13, with the key highlights of the quarter by brand.
Speaker Change: So the unveiling of a new collaboration with renowned Japanese office, because she marketing, which after a very successful first chapter of revisiting the months you'd go to that's one created in 2003 recently unveiled chump to two featuring the Cherry Blossom button.
Speaker Change: The measle or so and reached its leather goods offering with the successful launches of the <unk>.
Speaker Change: Ichor in order.
Speaker Change: And the beauty of the latest collection designed by <unk> scan and hired with young including a fashion show Retracing tolls.
Speaker Change: <unk> trouble heritage in Paris next to the iconic Gouge you know station.
Speaker Change: Faithful to its rich heritage of innovation and extraordinary craftsmanship.
Speaker Change: And you're venturing Gucci called Love beauty.
Speaker Change: And welcome internationally renowned makeup off to sum up my graph us cosmetic creative director. The first of these new products will be available this fall.
Speaker Change: Lastly, really don't cross the bespoke trial trunk full major grown pre ship groups and was the title partner of the first race of the season in Australia.
Speaker Change: Cassandra also inspiring foshan trolls two unveiled a new collection was designed by minor gods of QE as well as the successful salts a recent novel choosing leather goods, including the judge to rule and journals box and in high jewelry.
Speaker Change: Joe meaningful Tele collection was your inspiration from Crystal just below the median for gallstones.
Speaker Change: In just a few days time, the joy perspective exhibit shouldn't nutritional Joel designer of Dreams will open in South Korea and to Mark the occasion, Joe is reviewing its partnership with Womens University, the historic private women's University in Seoul.
Speaker Change: Now I'd like to mention a few highlights from some of the other missile local China continued to see strong momentum in ready to wear and leather goods and unveiled its first ever exhibition Shanghai Museum of Pudong, who set a rate the measles 100th anniversary.
Speaker Change: Likewise funding, which also celebrated 100 years of craftsmanship hosted a special cause runway shoe designed by huge oven to admissions.
Speaker Change: And the Bruins room and headquarters.
Speaker Change: Scene is embarking on its new creative journey with creative director, Mike right up to them as they make his first collection in the next few months. Louis V announced the appointment of Chuck My Colo and lesser holding long days out of the house, new creative directors, succeeding J W and the student after 11.
Speaker Change: Exceptional years and she unveiled its first collection by new creative design to solve tough toe up the history headquarters located on that there's all this work.
Speaker Change: Finally remove all extended re crossed its service to the U S Y bedroom Chi welcomed several new brinavess, others and celebrates its 100th.
Speaker Change: Anniversaries.
Speaker Change: Moving to perfumes and cosmetics on slide 15 revenue reached $2 2 billion euros for the first three months of 2025. This represents a 1% decrease on an organic basis, which after taking into account a positive 1% currency impact resulted in.
Speaker Change: Stable revenue on a reported basis.
Speaker Change: Turning on to slide 16, perfumes, and cosmetics fragrances continued to outperform for moves all brands buffer pistol job, but if it did from the enduring appeal of the all supported by our new order by phone or with a fresh design for its legendary and for total and from a new job.
Speaker Change: Buckhorn created by horses to Churchill.
Speaker Change: Like could've shown Covid Joel's high end fragrance offering enjoyed excellent growth and now includes a new unisex perfume cold finish.
Speaker Change: Finding the success of job kept true and prestige in Istanbul has also enabled Christian Joel to go in skincare.
Speaker Change: Strong innovation was on display across the other missile with several new sense, including wholesale day by genre also had a good performance in makeup with Wuxi why did you know she also are there tends to be sometimes in general in society.
Speaker Change: <unk> announced its new global ambassador.
Speaker Change: Our quad <unk> continued to expand thanks to somebody about secret in connection with the release of Korean yuppies pursue more and missile jungle.
Speaker Change: Keep the bussell.
Speaker Change: In watches and jewelry on slide 18 that revenue came to $2 5 billion euros in the first three months stable on an organic basis and up 1% on a reported basis after a positive 1% currency impact.
Speaker Change: On slide 19, as you can see our Measle made good progress on our strategic priorities, starting with jewelry Tiffany enjoyed excellent growth across all of its iconic lines. She said Gee lock hardware not the quarter was also marked by the third chapter of Tiffany type.
Speaker Change: By high which features and know what you're searching for diamonds and jewelry by the latest bona film collection revisiting, there's all shooting down it is I couldn't even tell a rough design.
Speaker Change: The first quarter <unk> made progress on its objective to renovate the store network recent opening includes a new flagship in Chengdu China.
Speaker Change: And lastly, the meso unveiled.
Speaker Change: And they as the official FIFA Club World Cup Trophy, which would be awarded to the winning team and exhibited for the first time this year at the final.
Speaker Change: Bulgari in celebration of the year of the Snake Ah, maybe subtlety inching Ito and exhibition in Shanghai, and Seoul, exploring the meetings and interpretation of the snake, which remains one of the most successful and distinct Gs designs will greet all sudden Williams.
Speaker Change: <unk> should be minimal owns yamana to pneumonia and took this opportunity to display the first to go got bracelets and what she has created in the mines forties.
Speaker Change: And on the production folks Wolverine integrated that you watch, making workshop in Switzerland, and announced plans to extend each jewelry manufacturing capacity.
Speaker Change: Bottoms up.
Speaker Change: She'll naming Y unveil these rejuvenate the beautiful make collection and pay tribute to Asia, you know high jewelry collection.
Speaker Change: Why it's shred began a new chapter with iconic false collection with false these lives.
Speaker Change: If she was our watchmakers, starting with Tyco, which released new additional some of its best New racing watches to celebrate its return to formula one as official time keep her you blow unveiled the world's first and then she colored ceramic watched it would be really cool magic ceramic.
Speaker Change: And they need to produce three chronograph buoyed by high frequency and P&L movement.
Speaker Change: There's little signature blue color.
Speaker Change: Now looking at our final business group selected reshaping on slide 21 revenue in the three months period reached $4 2 billion euros representing Ching.
Speaker Change: 1% decrease on an organic basis and stable revenue on a reported basis after.
Speaker Change: Taking into account a positive 1% with currency impacts.
Speaker Change: Moving on to slide 22, despite a demanding comparison basis. So far continued to grow in the first quarter of the year driven by success overseas exclusive brand curation strategy.
Speaker Change: Which resulted in good growth in brick and mortar off the first quarter also saw good performance from <unk> own product range. Additionally, Sephora put me out.
Speaker Change: Global few Gucci and belonging Ah.
Speaker Change: The Sundance Film Festival, which encapsulates sitfast core values and roll out of the catalyst for emotions and create Jimmy Choo, and Sephora, who stated that or sort of a unique pop up event in London, KOL, Rab Medici and civil law Dreamland.
Speaker Change: GFS continued to be held back by low traffic in Hong Kong and Macau as previously announced DFS is the need to get out from my good wishes.
Speaker Change: Wishes appraised should H, one the sheer and lastly, the woman. She continued progress thanks to its exclusive and distinctive concepts and reach a range of cultural events. The quarter also saw a little bit mushy and the semi and reunited.
Speaker Change: Single, Google lens structure.
Speaker Change: This ends the business group presentation, and I'll hand back to <unk>, who will conclude.
Speaker Change: Thank you.
Speaker Change: A few closing remarks on my thoughts before moving to Q&A.
Speaker Change: We continue to face macro uncertainties and lack of extraordinary.
Speaker Change: External factors and that's what that's the humane confidant why a thing of course I left anything to that.
Speaker Change: Well the cycles continues its nomination phase after years of exceptional growth.
Speaker Change: The best way I could downtown high quality, that's what gets us there.
Speaker Change: We are close to them. It means continued to deliver the best products with the highest level of quality and excellence.
Speaker Change: So it's time to demonstrate our agility and capacity to address M&A at <unk>.
Speaker Change: And why we are being very disciplined in our resource allocation. We also make sure we keep the highest level of investment behind our products and brands to continue to increase our competitive edge and be ready to accelerate when the cycle.
Speaker Change: That concludes the presentation and all that type of play as we move to Q&A.
Speaker Change: Yes were pretty tough in Q. Please open the line for questions.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad.
Speaker Change: If you wish to cancel your request please press star two.
Speaker Change: Make sure the mute function on your phone is switched off to allow your signal too rich of equipment again and it is star one to ask a question.
Speaker Change: And our last question is from Aldo This mood from HSBC. Please go ahead.
Aldo: Yes, hi.
So I'm.
Aldo: And I'll just switch from HSBC I have a quick question piece of that one.
Aldo: But the performance by brand within the session in this obligation.
Aldo: With that.
Aldo: I'm sorry. So the question is helping you shouldn't two was it would be in line with dyskinesia and worse not better.
Aldo: One of them that green Dot Yahoo.
Aldo: What about so that's my first question. My second question you get bought by a nationally to follow the Sun.
Aldo: Please.
Aldo: Cause people to watch something.
Aldo: And China and my last question about the U S. And then the parties have you seen any game platform.
Aldo: And then Trumpf system. Thank.
Aldo: Thank you very much.
Aldo: Thank you.
Aldo: So on your first question on the phone lines by brand in cushion in these numbers.
Aldo: As you imagine there is some discussion around what we can say that a and b continues to perform slightly better than the average NGL continues with that phone like you.
Aldo: You then get rich.
Aldo: Well it does mention tonight's hunger hormone.
Aldo: Okay.
Aldo: You also mentioned that some of our brands.
Aldo: You shouldn't need to a new CAD team Iraq, So if a country I mean, I don't I'm not going to be.
Aldo: Oh, sorry.
Aldo: He's a known what we are what we have when it comes to national and he's off.
Aldo: What we've seen you know Q1 is that demand swing factor.
Aldo: Me too not just Chinese demand in Japan.
Aldo: So it continues to be strong enough in terms, but given the fact that there was a sharp increase on that dimension around 72% last year in Q1, we are not having to be named Pete.
Aldo: Obstacles.
Aldo: For example, KN says we have not.
Aldo: We can ask Michel and Pixar American clientele, one right now.
Aldo: You'll have them where they are.
Aldo: But the impact.
Aldo: Benchmark to total growth.
Aldo: And Oh, the or to your last question in term of the county.
Aldo: We didn't he.
Aldo: A major change in trend and we have nothing to report specifically for.
Aldo: You Wanna.
Aldo: And what we can see that on fashion than it otherwise would continue.
Aldo: So it goes and it has been the case they'll get better each month.
Aldo: Now it is true that Oh gosh, another plant that is a little more but notably less.
Aldo: And then he cycles and uncertainty and it's my I've had some impact in doing some tweaks that have their own.
Aldo: Categories, like wine and spirits and beer.
Aldo: Thank you.
Speaker Change: We will now take our next question from Suzanne enough crews.
Speaker Change: From UBS. Please go ahead.
Suzanne: And good afternoon. Thank you for taking my question and I'll stick to free as well.
Suzanne: So maybe first of all on pricing would you be able to confront piece and if there's been any pricing taken for the Tor or just fashion magic, which is a hole in Q1.
Speaker Change: It's not anything incremental perhaps both Q2 and in light of the catastrophe U S. Alright.
Suzanne: So that's my first question.
Suzanne: And then secondly, I know this is not an earnings call, but I guess well I'll give it a go is there any chance you could tell us how we should maybe think about the margins for fashion that your goods I don't know whether its better to talk about each one on a full year.
Suzanne: I guess just.
Suzanne: To understand because minus five and it's obviously, it's probably quite difficult to control costs. So.
Suzanne: And then anything any color you could provide to them to help us a little bit with modeling I would really appreciate that.
Suzanne: And then find me and maybe on the performance of various space consumer segment. So.
Suzanne: And have you seen any changes specifically in Q1 in terms of.
Suzanne: Sort of the higher end consumer performing weaker than previously or after.
Suzanne: The email comments on perfumes, and wines and spirits being.
Suzanne: Being weaker recently Daphne stuff, maybe Amit the aspirational consumers weaker in the current environment.
Suzanne: Just any color around digital various consumer cohorts and what youre seeing would be very helpful. Specifically in the U S. Thank you.
Suzanne: Okay. Thank you for your question I'm sorry.
Suzanne: On the pricing.
Suzanne: I'm not going to want to comment on Q2 on pricing can we have the award that is quite clear.
Suzanne: We've tried to use price as a growth driver that we have though you as a weapon to be more expensive items on average.
Suzanne: Still in Cola facility, we believe we have a we have seen some pricing colo and we've been moving that are as long as they address the.
Suzanne: Alright, one product set and we've seen our Calvin and headphones innovation, that's kind of that's in most of our friends on the case of the mine life and needed to on the bike up and.
Suzanne: Sit down.
Suzanne: Now to your point, it's true that we use pricing, sometimes too upset temptation when dad, he sometimes E D.
Suzanne: There is a.
Suzanne: A swing in the Carolinas and in this case oxide oxide Oh lever that we're going to consider all what you have to who takes into account is that it's not one size fits all because we have very different brand a different.
Suzanne: But also it's something that's done by the amazing, though on a very precise it needs to make sure that what we do.
Keith and Brent.
Suzanne: Brent So I will not come in Brazil, and on your question I think some of impact in Q1, there was a very slight in the in the news a very slight a price play.
Suzanne: So just getting back so that would be on.
Suzanne: On pricing.
Suzanne: On margins.
Suzanne: So the question then is ugly, it's one yeah. So.
Suzanne: The usual and so I I got a formula that was at a school.
Suzanne: What I can say, obviously, given the uncertainty that we've been very mindful and very keen on the space that we are we at which we allocate our resources.
Suzanne: You know that.
Suzanne: It's more difficult to control cost and OPEC and you also know that effect out.
Suzanne: Nature of golf.
Suzanne: So for example, we know that selling expense will continue to grow given them they'd show and given.
Suzanne: The acceleration in the end the investments behind the network.
Suzanne: We are working hard on the 20th Jan then, but that's one way some enough shop, especially because.
Suzanne: Once people saw people.
Suzanne: And.
Suzanne: We believe we have some room to adjust on a marketing cost, which we will do a win win.
Of course, we preferred to a bullish in order to enhance an ugly duckling Martina.
Suzanne: And having said what I said on cost if you remember that for.
Suzanne: Keith will continue to invest to Noel networks and behind the brands because we want to make sure that we exist.
Suzanne: Downtown cycle very strong M E. When demand bounced back so it's all of my adult balance between addressing to there is going to come back and ensuring that we keep investing you know well our long term goals.
Speaker Change: With all that in mind, what our union to.
Speaker Change: Keep in mind is that the margin we discussed any nothing approved.
Speaker Change: In each one.
Speaker Change: Nicole is the basis of comparison of last Hill H, one mountain west to at any time.
Speaker Change: And we used two days up from Schon, we are trying to ensure that we can have some sequential margin.
Speaker Change: Margin improvement versus two oclock, yeah, but again.
Speaker Change: The two more that might be new bomb it does.
Speaker Change: No.
Speaker Change: Behind many of those are changing every hour.
Speaker Change: And lastly on your question on consumer segment itself.
Speaker Change: So we all know that's C D. A lucky we do not believe that he also upsell.
Speaker Change: You too.
Speaker Change: Due to the to what the behavior of yes Cashman casino.
Speaker Change: We believe that it's a matter of sentiment upcycle and inflation and so what we do is we continue to invest and innovate in all kind of fun to make sure that we ever had these two segments. There is no specific strategy for.
Speaker Change: Oh gosh when her guests.
Speaker Change: So now al.
Speaker Change: And.
Speaker Change: Two one.
Speaker Change: There was no 50 seat a changing trend for a.
Speaker Change: Customer versus Q4.
Speaker Change: Hi.
Speaker Change: Thank you well now move to our next question from Thomas <unk> from <unk>.
Speaker Change: Citi. Please go ahead.
Speaker Change: Good evening Sicilian hotels, thanks for taking my questions.
Speaker Change: I have three one on the U S manufacturing if I'm not mistaken.
Speaker Change: The three that you don't want to get in California, and takes us produce about half of your volume output for retail USA is there any opportunity to increase that share.
Speaker Change: Particularly on the more sophisticated box to mitigate potential tariff risks could other brands.
Speaker Change: Produced in the U S. That's a year, maybe some bags of Geophonies ilene and shared that sort of a manufacturing platform with retail.
Speaker Change: Secondly, a follow up on pricing in Q2 and distances you.
Speaker Change: You you want to reveal the commercial strategy of course, but can you tell us how you think about future U S prices in the case of the.
Speaker Change: 10% or maybe 20% average would you want to pass that on fully to the U S. Consumer we think maybe.
Speaker Change: Spread the price increase across multiple regions.
Speaker Change: <unk> also balanced the regional price caps.
Speaker Change: That's my second question and finally on a follow up on the Opex as well.
Speaker Change: Last year I think you did the you put a very tight grip on expenses in both Q1 and Q2, you'll have 2% I think.
Speaker Change: Schools in each half with marketing costs down in absolute value is at the minimum threshold you talked about how to.
Speaker Change: Continue to invest to be ready for the for.
Speaker Change: So at the end of that cycle is plus 2% Opex schools.
Speaker Change: Sort of the sensible budget for at least the first half.
Speaker Change: And have you already taken specific cost control measures, particularly in the U S. Thank you.
Speaker Change: So today the specific quota suite questions.
Speaker Change: [laughter].
Speaker Change: On U S manufacturing so yes.
Speaker Change: Yes.
Speaker Change: Our production facilities in the U S.
Speaker Change: But on your numbers.
Speaker Change: Around <unk> of local needs than the number you mentioned.
Speaker Change: They didn't capacity, but.
Speaker Change: But we see at what pace and how much we want that to we bolt.
Speaker Change: On your call manufacturing, we own swab ciccone.
Speaker Change: Most of the U S product in the U S, but not all of this was now from the room.
Speaker Change: In order to to move that's a bit between the production in Europe into production in the U S. So we are looking at that obviously.
Speaker Change: That's something we can do all the time, although nicely because it takes quite some 17.
Speaker Change: Something to add to that but it's something that's a weekend.
Speaker Change: Placing the reason unable to.
Speaker Change: In a similar time frame.
Speaker Change: And then.
Speaker Change: On your Q2 pricing question I don't know.
And so I think mitigation I think we only need to.
Speaker Change: They are very can because we are in a non technical is.
Speaker Change: And we all know in airports and 90 day suspension period.
Speaker Change: We can hope will enable some negotiation and wring some maybe because he sees the outcome. The west has made us a fan.
Speaker Change: Having said that this is nothing dollar or so back to what is in Florida.
Speaker Change: Florida.
Speaker Change: The price increase is one stock, but there are also some michigan.
Speaker Change: And on price again.
Speaker Change: The one sided it's also.
Speaker Change: If it goes to answer your question with one number out because it can be very different depending on the brands depending on the categories within the brand.
Speaker Change: You see you have more pricing fell well when it comes to core luxury brand.
Speaker Change: Then one in Phoenix, where we need to be careful and also beauty useful.
Speaker Change: It's a very deep that we hired and an a and in Boston that we need to do quietly what I can say that and especially for wine and spirits are we.
Speaker Change: <unk> shipped some stuck.
Speaker Change: This is not a sustainable solution, but it means that we have a bit of time to reflect and make sure that we have the profile parameters to think the informed decisions on when we will need to take a stick action.
Speaker Change: And on the back so I should've done there's only halfway.
Speaker Change: And I will do it no no.
Speaker Change: No no.
Speaker Change: I will go into a into more detail, but I can already with what they said I think it's good for Q1 and the same score.
Speaker Change: We are working on are making behind balance and what I said in some of the actions would.
Speaker Change: It helps you model.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question is from Antoine Belge from BNP, probably bought Exxon. Please go ahead.
Antoine Belge: Yeah, good evening itself.
Antoine Belge: BNP. So three question that I'd like to come back on to close those because we need to explain the full points.
Antoine Belge: Quarter on quarter.
Antoine Belge: So if I hear you that.
Antoine Belge: Europe actually starts improving European story in U S.
Antoine Belge: Collapsing them they need to do.
Antoine Belge: The mid to.
Antoine Belge: <unk> high single digit last quarter.
Antoine Belge: So I'm a big Chinese gone from I think rules.
Antoine Belge: Onto Liberty to dawn.
Antoine Belge: So it was on this.
Antoine Belge: Question number two is about Oh, what you commented about the.
Antoine Belge: You don't Wanna wrongdoing, a bit better but.
Antoine Belge: But look massively, but that's always a disappointing.
Antoine Belge: I don't like to be too good.
Antoine Belge: Like immediate collaboration not launch.
Antoine Belge: Sure bag, which I think is the.
Antoine Belge: The 20, new bagging.
Antoine Belge: And remember with you soon.
Antoine Belge: We.
Antoine Belge: Are we going to see.
Antoine Belge: Yes.
Antoine Belge: It would be the window would be the non recurrence of market.
Antoine Belge: Sure.
Antoine Belge: This softening.
Antoine Belge: And the reason Oh.
Antoine Belge: And so I'm really sorry to come back on the margin to make sure I understood.
Antoine Belge: So fresh and then as it relates to that.
Antoine Belge: This 35%.
Antoine Belge: Margin in which we are at the time, so it was across especially including some one offs.
Antoine Belge: Visions.
Speaker Change: No I see that there is a formula one.
Speaker Change: This means that as soon as all these other activities that I mentioned, that's more advertising recently so.
Speaker Change: So what is your comment about the 35% was the.
Speaker Change: The 24.
Speaker Change: Each one.
Speaker Change: The slight acceleration or acceleration.
Speaker Change: It would be from that 35%.
Speaker Change: Thank you.
Speaker Change: Thank you Antoine.
Speaker Change: So in terms of the different dynamic I will close.
Speaker Change: Two are two helps your Ma am.
Speaker Change: Therefore, the first a swing factor in the main one is our training.
Speaker Change: And Chinese he's very much linked to the designation of tap out.
Speaker Change: So just explain around so you simplify sympathize explain around Shreveport, So is that the main factor.
Speaker Change: And it's really an important why don't we don't see it.
Changing trends in to.
Speaker Change: Actually demand for Chinese transit.
Speaker Change: And then do it.
Speaker Change: The rest of it is.
Speaker Change: We said that I mean, I can imagine have a quickie well and.
Increasing dashes H two last yeah.
Speaker Change: Less than two forces that might explain your point, then I think the math off right.
Speaker Change: And then on your question so I.
Speaker Change: I I believe I I E coli.
Speaker Change: Key it was an unlock any and the impact from Mark and me.
Speaker Change: Fastweb is very interesting is that look I mean, what sort of at a premium and it sold out.
Speaker Change: So it was indeed a success.
Speaker Change: But it was not.
Speaker Change: In some of the major back all the shares and the agenda of N V. The Duke walked out.
Speaker Change: Still it was a great success and it also shows that when you have the right execution and derive a pro.
Speaker Change: And collaboration then it says even interest with it that's opinion because again it was sunbelt the second phase.
Speaker Change: It is much smaller now.
Speaker Change: But it's an interesting opinion in 16 months.
Speaker Change: And then maybe I wasn't totally E P.
Speaker Change: It really didn't the month when selling to margin by segment and so on so when I was commenting to.
Speaker Change: Although my opinion cooperman.
Speaker Change: Well not that's just that's yeah, and and and the mom Jean I was still king overall and not fall.
Speaker Change: Fashion and Lisa Who's in particular again, if we could just refresh us on.
Speaker Change: Looking at Mom, Jean Dal Minion news.
Speaker Change: What you need to understand is that we are generating we are acting we opening too well on what's the kind of going forward and where we need it in Boston to I Trust.
Speaker Change: But I I cannot I cannot say.
Speaker Change: They are similar.
Speaker Change: And lastly, maybe to your question on on topline and Chris.
Speaker Change: Keep in mind that in Q1 is all the wind, although waste heat like Chinese and Chinese new year, which is one way of creating a boost.
Speaker Change: The pop up shop on all Chinese demand, that's right up there.
Speaker Change: All of the boxes.
Okay. Thank you just to make sure I understood. So.
Speaker Change: My my smartphone.
Speaker Change: Sure.
Speaker Change: On the Chinese coast, mostly towards don't quote me or low teens.
Speaker Change: No no.
Speaker Change: Routines.
Speaker Change: I didn't give that number.
Speaker Change: Yeah.
Speaker Change: Okay, because if it.
Speaker Change: We have to explain three points.
Speaker Change: Divided by the way you would almost close sometime I will let you make your own math.
Speaker Change: And like to Uh huh, Okay. Thank you.
Speaker Change: Thank you we will now take our next question from Chiara <unk> from Jpmorgan. Please go ahead.
Chiara: Thank you very much good evening question on my daughters, I was supposed to be a question for me.
Speaker Change: On fashion and leather goods on that Nick.
Speaker Change: And and volume maybe you mentioned the pricing was slightly positive can you also comment on the mix and the volume component of Cros and.
Speaker Change: Second question on watches and jewelry I was wondering why they didn't slow down sequentially is also down to the Chinese consumer in Japan, or maybe there was that'd be gone slow down on the American consumer there back to the question of leather.
Speaker Change: And finally, a very quick question on wine and spirits, we saw some articles today going around about the potential spinoffs that so just wanted to check on your latest thoughts about the wine and spirits Division. Please thank you.
Speaker Change: So maybe I start with this one because we were quite surprised to see them as a phone call Michele by defend made yeah that.
Speaker Change: He's now our publishing millions like July one in most cases.
Speaker Change: Intriguing sometimes hung inflammation.
Speaker Change: It was the case a federally Oh, let's see Paul is reachable and it's tough to leave you with problems where people are liking seems that bush exercise.
Speaker Change: So many of them.
Speaker Change: I don't want to give any time on this because I think we have the more important thing to discuss.
That's one piece of advice, if you want to no teams around all those questions piece contacts can they still Felicia noted made yeah.
Speaker Change: I think if you match, because we know the numbers and we noticed like.
Speaker Change: And I will not comment more on the Spa and then on mix and volume. So yes, I made a comment saying that the price was slightly up.
Speaker Change: Volume was slightly down and the.
Speaker Change: The mix was flattish overall.
Speaker Change: That would be the.
Speaker Change: Where you can look at it.
Speaker Change: Then on what cheap and Andrew Lee, So you're right to say that the Chinese are.
Speaker Change: I think once it was it would be different because it started to decrease Oh, yeah done well.
Speaker Change: And then there's no good luck, Jeff So the basis of comparison is any different in its class and yeah.
Speaker Change: And then what we are seeing in our in what she then journeys that we are comfortable that I asked on the cushion of the transformation plan of Tiffany with Bush Oney I couldn't you crash and the dosing of 18.
Speaker Change: So we continue to deploy that very consistently and it's the thing up so are we continue to progress.
Speaker Change: And Oh, Lord I think that's what I would that's why I would comment on on lunches and Andrew Lee.
Speaker Change: Alright, Thank you very much.
Speaker Change: And our next question is from Luca <unk> from Bernstein. Please go ahead.
Speaker Change: Yeah, Good evening city land dogs may.
Speaker Change: Maybe the first question on the create T V. T. We saw a number of new appointments in the creative responsibility in the function of the leather goods divisions.
Speaker Change: Can you tell us where you stand in this updating a creative responsibilities I think maybe.
Speaker Change: It may be a few cents still.
Speaker Change: I don't know whether I missed.
Speaker Change: The news, but we saw it Jonathan understood for example.
Speaker Change: Leaving.
Speaker Change: But not being appointed.
Speaker Change: Anyone else.
Speaker Change: May be mistaken, but if you could.
Speaker Change: Give us a sense of where you stand in this process that would be.
Speaker Change: Helpful.
Speaker Change: Then.
Speaker Change: I was just wondering.
Speaker Change: Previous difficult time, when we look at 2008 2009 or even more recently.
Speaker Change: She has been on the attack when it comes to M&A and when it comes to potential opportunities to secure.
Speaker Change: It's in a market, which is more difficult.
Speaker Change: It seems that the shape of things to come if we look at the impact that.
Speaker Change: Oh this debate about tariffs and that'd be most recent decisions in the U S.
Speaker Change: Produced.
Speaker Change: The stock market and the macroeconomic expectations would there be any reason this time.
Speaker Change: We expect to different.
Speaker Change: Approach and a different attitude from Lv magnitude would this be again one of the times when you work.
Speaker Change: To consolidate your leadership in the industry.
Speaker Change: And then third.
Speaker Change: In general one of the excessive debt.
Speaker Change: Industry insiders have been reporting is that right.
Speaker Change: It is it is it sensible you think to anticipate that mix.
Speaker Change: It could potentially be negative as we normalize from the.
Speaker Change: The previous exactly with especially if we look again at the flash or like the goods division. Thank you.
Speaker Change: Thank you.
Speaker Change: Newcastle on uncapped T V.
Speaker Change: What I, what I would say that.
Speaker Change: We always need the designers who shop, both our credit team and align with the DNA of the brand.
Speaker Change: And Oh, the right one for the journey that we wanted to put the brand on them.
Speaker Change: We have some gradual change as you are rightly read.
Speaker Change: So you have the right information and I think we are pretty excited by the different changes that are we let these places.
Speaker Change: Some some collection in shoes.
So you have the right information and I think we are pretty excited by the different changes that are we displaced swindle.
Speaker Change: And I don't think I am more of them.
Speaker Change: The second one is coming back to big to.
Speaker Change: The previous comments, so I won't comment much.
Some some collection in shoes, and I don't think I am more of them.
Speaker Change: Although we are always.
And the second one is coming back could be two of the previous the.
Speaker Change: Working to consolidate the loan you don't see a lot of moving pieces.
The previous comments, so I won't comment much further on we are always.
Speaker Change: And so as you said, we are very much focused on continuing to.
Speaker Change: Execute that well.
Working to consolidate alone, even though she'd down a lot of moving pieces.
Speaker Change: And all in the context that uncertainty then we need to walk before that comes from accretion.
So as you said, we are very much focused on continuing to.
Speaker Change: To be a continuing to consolidate and to leave any angina sometime.
Executor, well agenda into context.
Speaker Change: And on the mix.
And then she then we need to work school comes from accretion.
Speaker Change: So oh well.
Speaker Change: Oh, well cut the gene is always to improve mix side. The comment I made that we prefer to work on makes them weapon price, which is the comment I meant because price we're gonna be a close by that mix should be.
To be a continuing to consolidate and to visit here in China.
<unk>.
And underneath.
So oh, well Oh Wow, how did Jesus always to improve mix side. The comment I made that we prefer to work on mix then to work on price, which is the comment I meant because price wouldn't be a growth driver and it should be.
Speaker Change: So when we landmines continuing to a tool a weapon underneath and I, we are still on the headset along she's.
Speaker Change: And Mark and me I said it was high that's opinion, many twists footnote and on the recent launches and come on the back it wasn't fully successful but back to the point that whenever you are able to deliver the highest quarter is the high table quite a T M.
We landmines continuing to to.
Two our weapons underneath.
And we are still on the fence along sheet.
And Mark and me I said, it's what's highest that's opinion many twists one note and on the recent long she can come on back it was a truly successful but back to the point that whenever you are able to deliver the highest quarter is the high table quite a tea and.
Speaker Change: In trend.
Speaker Change: The demand than a product and I love I think Paula.
Speaker Change: Thank you.
Speaker Change: Thank you next question from Edward <unk> from Morgan Stanley. Please go ahead.
In trend with the demand and then a product sale.
Speaker Change: Yeah. Good afternoon. Since you don't know them. So just sorry to come back on the on session led the group. So you you will see you at the end of January talked about yes, Duffy well in between being up 10%. So.
And you have I think Paula.
Paula: Thank you.
Paula: Thank you.
Speaker Change: Our next question from could work for Bell from Morgan Stanley. Please go ahead.
Speaker Change: Yeah good afternoon.
Speaker Change: Yet you publish your reported a double digit kind of decline into Q1 can you just comment on the trends throughout the quarter.
Speaker Change: So just sorry to come back on the on session led the group. So you will see you at the end of January you talked about.
Speaker Change: Difficult to read given the timing of Chinese new year, which obviously helps our.
Speaker Change: Well and if you don't being up 10% so.
Speaker Change: Yet you publish your reported a double dip kind of declining.
Speaker Change: January but did things get worse.
Speaker Change: Worse in a linear fashion or you know clearly towards the end of the quarter. So that's number one.
Speaker Change: Q1 can you just comment on the trends throughout the quarter.
Speaker Change: Difficult to read given that the timing of Chinese new year, which obviously helps a.
Two of them the nationality to see if you can just come back from the Europeans and the Japanese are we right to understand that the there remain.
Speaker Change: January but did things go you know.
Speaker Change: Worse in a linear fashion or you know clearly towards the end of the quarter. So that's number one number two on the notion that a key.
Speaker Change: They get to maybe low single digits for European and mid to high single digits for the Japanese and.
Speaker Change: In Q1, and then lastly them sit for a while I think earlier I don't like the QL arose Tokyo, Boston, just all being cozy cheese.
Speaker Change: If you can just come back from the Europeans and Japanese are we right to understand that the remained.
Speaker Change: They get to maybe low single digits for European and mid to high single digits for the Japanese and in Q1, and then lastly on Citral I think earlier, you don't make the QL Rados Tokyo Boston.
Speaker Change: In Q1, but obviously it looks like there was there was a sequential deceleration can you just comment about sephora by by geography, and if you think just to gaining share in the main U S and European markets. Thank you.
Speaker Change: All being cozy cheese are still in Q1, but obviously it looks like there was there was a sequential deceleration can you just comment about CCAR, but by geography, and if you think just to gaining share in the main U S and European markets. Thank you.
Speaker Change: Okay. Thank you for your question, so unprofessional and neither goods and began Daniel question in terms of what I'm seeing.
Speaker Change: In Cod walked out with a few comments that so yes, because or so Chinese new year. It wasn't generally and analyst of Mark and me was generally we had a very good amongst a generally especially for those long at all.
Speaker Change: Okay.
Sean: Thank you for your question, Sean on refreshing them.
Daniel: And began Daniel question income without TNT in Cogs walked out with a few comments there so yes, because or so Chinese new year, it wasn't generally and.
Speaker Change: But no we have not seen and that's what I was trying to to explain when I said.
Mark: First off Mark and he was Washington, generally we had a very good amongst us generally, especially for those long lead time.
Speaker Change: When I commented on the American Humana American Humana continues to be pretty.
Mark: But although we have not seen and that's what I was trying.
Speaker Change: Well it just popped up so.
Speaker Change: This is an important one because genes are now at six months, we've been enjoying a positive growth in our fashion and and leather goods. So we didn't see.
Mark: To explain when I said.
Mark: When I commented on the American demand.
Mark: And demand continues to be up either.
Mark: Well it just popped up so.
Speaker Change: Our species teach a change on leasing is that February date.
Mark: This is an important one because genes are now at six months, we've been enjoying a positive boost in a fashion and and leather goods. So we didn't see any.
Speaker Change: At 10, nine because of the Chinese new year is absolutely necessary.
Speaker Change: Kimberly so dishes.
Speaker Change: It's 50 feet.
Speaker Change: Those are all what what happened and then I mean, we could find solve them reasons to explain us one movement in what I said is if we go into this he said that they think we wouldn't be here for this night and then actually the media helps you are in kind of understanding the trends so I would stop there.
Speaker Change: I called drop on demand are largely the Japan local demand.
Speaker Change: What what country, you're stuck with what we had.
Speaker Change: In previous quarters. So we didn't see any change on the trend on a go forward.
Speaker Change: Local chains.
Speaker Change: And then on faithful so we get that wasn't all my decision, which we expect to keep them.
Speaker Change: The pace and do leave them uncles that feel engine Android does well, let's just take one treaty.
Speaker Change: In term of geography.
Speaker Change: What we can say is that in the U S and in quite a across the region.
Speaker Change: Bringing me to eastern Europe.
Speaker Change: We continue to have success, Florida, Sichuan, we're doing when it comes to excuse me excuse me brand and store and we continue to gain market share in food.
Speaker Change: In the U S. A we are a business momentum when it comes to e-commerce, especially because Amazon is being that he had received and are being English sheep easily T. He got in price and we try to avoid a dish Ah just techniques so that would be.
Speaker Change: Place, whether that is a little bit less momentum, but also why the question used to be a very strong and gain market share and do more door, which has really made a big floor as you fill out your Chinese continuing to work.
Speaker Change: Quinn.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you.
Speaker Change: We'll now move to our next question from Louise single Hurst from Goldman Sachs. Please go ahead.
Speaker Change: Hi, good evening to ceiling, we don't thank you taking my questions. Just two for me so I'm going to come back on the U S I'm sorry.
Speaker Change: Can you speak a bit slowed down because we know you from my apologies can you came out I think I'm. Good. Thank you very much.
Speaker Change: I'm going to apologize come again, I will come back again to the U S and especially in that that the minus three for the group for the U S and you talked about fashion that'd be good.
Speaker Change: It's relatively I think in the last question you were talking about the American cluster, obviously still being positive, but presumably in the U S.
It was negative given the weight.
About fashion and the other being a good performance relatively I think in the last question you were talking about the American cluster overseas still being positive, but presumably in the U S that was negative given the weight and just thinking about the performance during the period, presumably there was a bit of a benefit for the American cluster at the beginning with our current.
Speaker Change: Just thinking about the performance during the period, presumably there was a bit of a benefit for the American flat to at the beginning with a currency dynamics when you think about spending into Europe.
Speaker Change: Just trying to understand we've had a period of unprecedented headlines.
Speaker Change: When we think historically you would've seen there's an immediate reaction to the containment and it'd be really helpful to understand the exit of the American pasta regionally.
So your dynamics, when we think about spending into Europe I suppose what we're trying to understand we've had a period of unprecedented headlines typically when we think historically you would assume there's an immediate reaction to the consumer and it would be really helpful to understand the exit of the American cluster regionally and locally.
Speaker Change: And likely as we look into Q2 I know, we don't have the answer with Crystal Pooh Pooh It would be very helpful to get some context. Thank you.
Speaker Change: Thank you so.
Speaker Change: There's one other point on the yeah on the U S.
As we look into Q2, I know, we can't have the answer or a crystal ball, but it'd be very helpful to get some context point Keith.
Speaker Change: The first one is that again.
Speaker Change: Freshman examples as well as watch and jewelry.
Speaker Change: Thank you.
So.
Speaker Change: It looks like a consistent within the second council, Yeah and space via a book when we include our two leased units. So that's the first time.
There's one other point on that.
Yes.
Speaker Change: Uh huh.
Speaker Change: One is that.
Speaker Change: Again.
Speaker Change: First on revenue as well.
Speaker Change: Watch and jewelry.
Speaker Change: The second one U S destination was essentially driven by the fall.
Speaker Change: She spent within the sector.
Speaker Change: Yeah and.
When we include a choice.
Speaker Change: Which they are double digit comps in Q1, given the rate of voice over the last two at all.
Speaker Change: That's the first time.
Speaker Change: Second one.
Speaker Change: The U S.
Speaker Change: And beauty where demand is soft.
Speaker Change: What is essentially driven by before.
Speaker Change: Yeah, well as women and we believe that on the spot.
Speaker Change: Which states are double digit comps in Q1, given the rate of growth over the last two O.
Speaker Change: There might be.
Speaker Change: In the most pizza and tweak some impact of humanity's Lindsay and stuff down, but although when S. T.
Speaker Change: And you see where demand is soft.
Speaker Change: Yeah.
Speaker Change: Women's jeans.
Speaker Change: And we believe that on the spot there.
Speaker Change: We don't have much to read books, he got he and underlying trend that would change in Q1.
Speaker Change: There might be.
Into mostly some tweak.
Speaker Change: In bulk of humanity and stuff down, but although when next fleet.
Speaker Change: This is not what we see in the numbers at this stage.
Speaker Change: It will mainly be different but in march except for softer demand in beauty and a continued soft demand in quenya actual.
Speaker Change: We built how much will be booked.
Paula: And then in Darling a trend change in Q1.
Speaker Change: This is not what we see in the numbers at this stage.
Speaker Change: The rest well it wasn't holding a pick you win and sometimes better than that.
Speaker Change: It will mainly be defense, but in March except for softer demand in beauty and a continued soft demand in quenya actual.
Speaker Change: That's a tricky lecture.
Speaker Change: Thank you that's very helpful and given the and.
Speaker Change: We're and I know you mentioned.
Speaker Change: The rest was holding up pretty well and sometimes better than the than say contribute less true.
Speaker Change: Agility, and you're wanting to cool and that's clearly what we're looking for but in terms of.
Speaker Change: Deep the plans for the year ahead is it now time to think a little bit more about the streamlining of activities at a different allocation of investment by region is there.
Speaker Change: Thank you that's very helpful and given the environment. We're in I know you mentioned demonstrated agility earlier on in the cool and that's clearly what we're looking for but in terms of.
Speaker Change: With some of the smaller brands I M. P. T O selective retail can you give us any color in terms of what you were asking from them from the team.
Speaker Change: You know deep the plans for the year ahead is it now time to think a little bit more about the streamlining of activities at a different allocation of investment by region is a review of some of the smaller brands in beauty or select retail can you give us any color in terms of what you were asking from them from the team. Thank you.
Speaker Change: Keith.
Speaker Change: Yeah, I think it's not sitting in the D N into.
Speaker Change: Just type activities, when there's only face difficult context.
Speaker Change: So I think a two day.
Speaker Change: Yeah, I think it's not going to quote Janet to to just our gpus whenever we face a difficult context.
Speaker Change: Focus is really on managing to kind of contact only mention or the amici geisha and our plans and our upcoming.
Speaker Change: So I think a two day.
Speaker Change: That could mean, a news that we continue to.
Speaker Change: The focus is really on managing to kind of hold back on we mentioned or to mitigation.
Speaker Change: Two of them on the on your coverage as well as when you joined the demand and the agenda that doing what we do best which is a continued to ensure that we have the high credit.
Speaker Change: Plans and upcoming news that we continue.
Speaker Change: Two up on the on your coverage as well.
Speaker Change: Creative work, and and and and hiked a highest quality of products to put on the market.
Daniel: You joined the demand.
Daniel: And the agenda that doing what we do best which is a continued to ensure that we have to go high.
Speaker Change: And I think that's good yeah, well I think pumps. Thank you very much.
Daniel: Chris you work and and and and hiked a highest quality of products to put on the market.
Speaker Change: We're approaching an hour I suggest we take another two questions.
Mark: And I think that's good yeah, well I'll take phones.
Speaker Change: Thank you Sir.
Speaker Change: The next question is from Sean <unk> from Kepler.
Mark: Thank you very much.
Mark: Yeah.
Mark: We're approaching an hour I suggest we take number two questions.
Speaker Change: Please go ahead.
Speaker Change:
Speaker Change: Good evening, Thank who are all taking my questions I have two please.
Mark: Thank you Sir.
Speaker Change: Just one on the wine and spirits. This you mentioned a two year.
Mark: And there are a lot of.
Sean: The next question is from Sean <unk> from Kepler.
Mark: Go ahead.
Speaker Change: I'd frame it to down to one division surrounding the return to growth.
Speaker Change: Good evening, Thanks for taking my questions.
Speaker Change: I have two please.
Speaker Change: Could you. Please elaborate on the key initiatives currently being implemented in March in Hollywood.
Speaker Change: First one on the wine and spirits.
Speaker Change: This you mentioned, a two year time frame and tour to under one per division surrounding the return to growth could.
Speaker Change: <unk> segment.
Speaker Change: And I see them being.
Speaker Change: Our view of a structural shift in demand for cognac in China, Oh I see.
Speaker Change: Could you. Please elaborate on the key initiatives currently being implemented in basket value within the <unk> segment.
Speaker Change: Curious to get cold.
Speaker Change: And one question could you please provide more granularity on the path of almost of jewelry brands.
Speaker Change: And I see them in our view a structural shift in demand for cognac in China.
Speaker Change: Watch brands in Q1, and keep that counts not the jewelry, especially Tiffany that's probably proven more resilient. So can you share.
Speaker Change: Curious to get cold.
Speaker Change: And one question could you please provide more granularity on the path almost saucer jewelry brands.
Speaker Change: In fact going back to <unk>. Thank you.
Okay. So on you are on your first question, maybe I start with the demand.
Brent: Brent in Chihuahua, and you've done that.
Speaker Change: That's a jewelry, especially cheese honey.
Speaker Change: Bobby proven more as you know them. So can you share on your insight on that please thank you.
Speaker Change: On the women's Gainesville, although all what we've seen is something headed up cause anybody win in the U S and in Europe.
Speaker Change: Okay. So on you are on your first question and maybe I'll start with the demand.
Speaker Change: And courtyard continues to suffer from weak demand.
Speaker Change: On the women's Gainesville on what we've seen is shrunken headed up please anybody win in the U S and in Europe.
Speaker Change: And we need to choose what they mentioned that.
Speaker Change: Anyone's guess.
Speaker Change: The U S political context my husband upheld.
Speaker Change: And courtyard continues to suffer from weak demand.
Speaker Change: On demand.
In the most recent week.
Speaker Change: In Hoboken, it can choose what they mentioned that.
Speaker Change: I do know our women's Julien.
Speaker Change: Anyone's guess.
Speaker Change: He's a skeptical is that humans very much linked contextually issues as it addresses a discussion on our customer so that box, we didn't see any change.
Speaker Change: The U S political context, Mike Huffman upheld.
Speaker Change: On demand.
Speaker Change: In the most recent week.
Speaker Change: As you know why not just do it.
Speaker Change: He's a skeptic wrong is that the human is very much linked Olympic sort of issues as it addresses a discussion.
Speaker Change: And then we continue to 12 nine connectedness assessment.
Speaker Change: And then your second question, sorry, I didn't catch a control group of sport shoes.
Speaker Change: So desktops, but you didn't see any change.
Speaker Change:
Speaker Change: And then we continue to love the line connected to supplement.
Speaker Change: So julien.
Speaker Change: That's just what she is on jewelry.
Speaker Change: And then your second question, sorry, I didn't catch a control group of sport shoes.
Speaker Change: Think I mentioned that we are seeing a continued very good progress on Tiffany.
Speaker Change:
Speaker Change: Thomas Foundation plan not only continued to we send the we said last time that we would continue to kind of a store that does leave them often Seneca yeah. We all know in around the 27% and and and we continue to see that innovates hit the stores are performing very well.
Speaker Change: So.
Speaker Change: That's just what she is Oh Trust me I I think I mentioned that we are seeing continued really good progress on Tiffany.
Speaker Change: The transformation plan and we continue to we send the we said last time that we would continue to kind of wait stall that leaves them often Seneca yeah are we all know the wrong, the 27% and and and we continue to see that San Jose the stools aka forming very well.
Speaker Change: <unk> and Samsung D I call them know well, we've been very consistent.
Speaker Change: Consistent yeah, pushing all do you fall behind and yeah equal as they continue to gain some wage within the total portfolio and all that.
Speaker Change: And Sam Farthing D. I call know well, we've been very consistent T lab Chow AR pushing all do you fall behind and yeah equal as they continue to gain some wage within the total portfolio and overall.
Speaker Change: Uh Huh, that's just the rest of the portfolio list the dishes fault pumps if any.
Speaker Change: Doing guy he's a very much.
Speaker Change: Well the home pass through the rest of the portfolios with D. C fault blocks if any.
Speaker Change: Enjoyed quite a good Chinese new year.
Snakes, yeah, but yeah. He was not to do a very a.
Speaker Change: Boone County.
Speaker Change: Very much.
Speaker Change: <unk> seen neurons absolutely continues to be very focused on a new class of products and.
Speaker Change: Okay young enjoyed quite a good Chinese new year.
Speaker Change: Snakes, yeah, but yeah. He was not to do a V I a.
Speaker Change: And to de lever.
Speaker Change: Well there were some feeding it took me a phone problem going left out what they mean nothing's done what you said because we lend to.
Speaker Change: A big thing around that because it continues to be very focused on due course products and.
Speaker Change: We learned by commenting the performance and just please.
Speaker Change: And to deliver our growth the wisdom feeding it to peaks Oh, My God I left out what they mean nothing's done what you said because we lend to.
Speaker Change: Please hold one specific issue in Naples and so.
Speaker Change: It's good and on when she's a we had quite a good one I suppose watches in London.
Speaker Change: We learned by incremental thing the vessel months in the.
Speaker Change: And we continue to expect.
Speaker Change: Just please hold one specific issue in 19. Thank you.
Speaker Change: Yeah.
Speaker Change: He's doing that anyway, you you've seen that we have no name Oh blah blah are.
Speaker Change: It's good and on what she's a we got quite a good one I suppose what she's in London, and we continue to Oh yeah.
Speaker Change: We eco vessels amazement, but independent, but you will continue to our English call net and and built on the very good work on the I know, you're calling now on a blended juices.
Speaker Change: <unk> is doing very well you have seen that we have no name Oh blah blah.
Speaker Change: Who we are eco vessels amazement we've spent.
Speaker Change: And then you'd really like being in more difficult times and we are.
Nathan: But you will continue to our English called Nathan.
Speaker Change: And then can do very well on the I know you've gone now on.
Speaker Change: Really making sure that we are do hype innovation and they'll have to put back.
Nathan: Brendan Joneses.
Nathan: And then you do it.
Nathan: Being in more difficult times, and we are really making sure that we all do high innovation and they'll have to put back.
Speaker Change: E G behind the brands so that's all in.
Speaker Change: What shoes and jewelry.
Speaker Change: Thank you very much.
Speaker Change: Thank you and we will take now our final question today from Dana Telsey from Telsey Advisory Group. Please go ahead.
Nathan: E G behind the brands that are already in our watches and jewelry.
Dana Telsey: Hi, good evening for sealing adopt as you think about the U S and capital expenditures is the remodel program on sephora going as planned or any adjustment and also as you think about Tiffany and lastly, as you think about your production in the U S will that stay the same increase how do you.
Nathan: Thank you very much.
Dana Telsey: Thank you and we will take our final question today from Dana Telsey from Telsey Advisory Group. Please go ahead.
Dana Telsey: Hi, good evening, Cecile and adopt as you think about the U S and capital expenditures is the remodel program on sephora going as planned or any adjustment and also as you think about Tiffany and lastly, as you think about your production in the U S will that stay the same increase how do you think.
Dana Telsey: Think of that in the Grand spectrum of sad to see L. Every half hour something is changing.
Dana Telsey: Yeah, you're right to mention that some point, so any thoughts of my own so I mean.
Dana Telsey: When you asked me no one of our.
Dana Telsey: Of that in the Grand spectrum of as you start to see L. Every half hour something is changing.
Dana Telsey: Most are usually so today, we have some production for peaceful Bush a N V, which is one of the production and that's funny. When she is a mentor to me on what we said in the U S.
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Dana Telsey: So felt bullish.
Dana Telsey: We can.
Dana Telsey: We can increase.
Dana Telsey: They get the production for the U S. A.
Dana Telsey: And she funny, we choose a majority of what we started in the U S.
Dana Telsey: He said something that two adults do overnight.
Dana Telsey: So felt bullish a weekend.
Dana Telsey: Uh huh.
Dana Telsey: We saw some close friends and downloading Christine training happening.
Dana Telsey: We can increase.
Dana Telsey: The campus the production all the U S. A.
Dana Telsey: I mean, the high fever loved the experience and expertise.
Dana Telsey:
Dana Telsey: Something that you don't do overnight.
Dana Telsey: It's a we saw some close friends and download.
Dana Telsey: We are not today contemplating to change honeycomb.
Dana Telsey: <unk> training having.
Dana Telsey: But this is a this is what we are what we could do.
Dana Telsey: I mean, the highest level of the experience and.
Dana Telsey: And there wasn't enough question honestly thought yeah, no unsafe law Ah and.
Dana Telsey: And expertise.
Dana Telsey: We are not today contemplating to change honeycomb.
Dana Telsey: My name is clean the desk phone lines continue I mean, they continue to grow they continue to gain market share download or very small when it comes to was that one store that's out of shops in the shops and Chuck.
Dana Telsey: But this is a this is what we are what we could do.
Dana Telsey: And there wasn't enough cushion on say for you know honestly floor.
Dana Telsey: And actually the performance continue I mean, they continue to grow to continue to gain market share is very small when it comes to was that one store that was shops in the shops in truck.
Dana Telsey: We are all of them do you feel in Tucson with exclusive brands and so to.
Dana Telsey: Today, we are being as she queens for any brand when it comes to investment so.
Dana Telsey: We are older Dads, you feel inflation with exclusive brands and models.
Dana Telsey: He then well what is the growth plan I mean, it's like it's like for any investment.
Dana Telsey: Today, we are being as she feels for any brand when it comes to investment so.
Dana Telsey: We know it really depends on the ambition in place.
Dana Telsey: Right.
Dana Telsey: It's been well what is the growth plan I mean, it's like it's like for any investment.
Dana Telsey: Thank you.
Dana Telsey: Thank you.
Dana Telsey: We know it really depends on the ambition in a good place.
Dana Telsey: Okay.
Dana Telsey: Yeah.
Dana Telsey: No. Thank you very much.
Dana Telsey: Right.
Dana Telsey: Thank you.
Dana Telsey: Please go ahead Sir.
Dana Telsey: Thank you operator.
Dana Telsey: Thank you.
Dana Telsey: Okay.
Dana Telsey: Thank you very much or a nice evening.
Dana Telsey: Okay.
Dana Telsey: No. Thank you very much.
Dana Telsey: And thank you for attending the call.
Dana Telsey: Please go ahead Sir.
Dana Telsey: Thank you. This concludes today's conference call. Thank you for your participation ladies and gentlemen, you may now disconnect.
Dana Telsey: Thank you operator.
Thank you very much or a nice evening and thank you for attending the call.
Dana Telsey: Thank you. This concludes today's conference call. Thank you for your participation ladies and gentlemen, you may now disconnect.
Dana Telsey: [noise].
Dana Telsey: Yes.
Dana Telsey: Yes.
Dana Telsey: [noise].
Operator: Ladies and gentlemen, good afternoon and welcome to today's conference call.
Rodolphe Ozun: I'm Rodolphe Ozun, Director of Financial Communications at LVMH, and with me is Cecile Cabanis, our Chief Financial Officer. Cecile will start by taking you through the key highlights of the first quarter of 2025.
Rodolphe Ozun: I will then comment on performance by business groups, after which Cecile will conclude and then we'll be happy to take your questions. As a reminder, certain information to be discussed on today's call is forward-looking and subject to important risks and certainties that could cause actual results to differ materially. For these, I refer you to the Safe Harbor Statement included in our press release. and on slide two of our presentation.
Rodolphe Ozun: Turning now to our announcement, our release was issued a short while ago in both French and English and is available on the LVMH website, lvmh.com, as are the slides for today's Let's now move on to the next topic, our first quarter figures, passing on to...
Cecile Cabanis: Thank you, Rodolphe.
Cecile Cabanis: Good afternoon, welcome, and thank you all for attending this call. Starting with slide three, let me give you a few broad comments on the first three months of the year where LVMH continues to demonstrate resilience. Let me share a few highlights. First, on Chinese demand. On the domestic market, trends were consistent with the end of last year. The main swing factor here to date is Chinese demand in Japan, as you can imagine. It remains strong in absolute terms, but three cycles, last year's sharp increase, and therefore no longer contributes to growth in percentage points. Second comment, despite the context of uncertainty preceding a tariff announcement, American demand for fashion and leather goods and watches and jewelry remained well-oriented and accelerated modestly compared to the second half of last month.
Cecile Cabanis: Sephora, on the other hand, faced very challenging comps after going double-digit last year, and this explains the sequential deceleration of the U.S. market at group level. Third comment is that Europe continues to grow.
Cecile Cabanis: I will let Rodolphe comment on the different activities. Maybe as a broader comment, we continue to witness across our brands the merits of innovation and creativity. When new products are exciting and functional, they perform very well.
Cecile Cabanis: Moving now to slide four, where you have the revenue bridge for the first three months of 2025. Group revenues reached 20.3 billion euros, down 2% on a reported basis and 3% inorganic, including a positive 1% currency impact. Slide 5 details the geographical breakdown of revenues in euros, which, as you can see, has remained broadly stable. However, versus Q1 last year, Asia fell three points in the mix, while United States, France, and other markets all rose one point. This is the reflection of Q1 regional performance that you have on the next slide.
Cecile Cabanis: Starting with US, moderate deceleration at minus 3%. Despite, as I was mentioning, a good performance of fashion and leather goods and watches and jewellery. Japan is slightly negative at minus 1%. Recycling last year's exceptional growth of 32%. Asia at minus 11% is reflecting a continued soft demand which is consistent with the end of last year. And finally, Europe continuing to display positive dynamics with a 2% growth.
Rodolphe Ozun: Rodolphe will now comment on the performance of our activities in more detail.
Rodolphe Ozun: Thank you Cecile and we'll start as usual with Wines and Spirits. On slide nine we show the Wines and Spirits business group delivered 1.3 billion euros in revenue for the first three months of 2025. This represents a nine percent decrease on an organic basis.
Rodolphe Ozun: This is the same period last year and an eight percent decrease on a reported basis after taking into account a positive one effect. Broken down, champagne and wines generated €0.7 billion in revenue over a three-month period, down 1% on both organic and reported basis. Cognac and Spirits recorded €0.6 billion in revenue, down 17% on an organic basis and 15% on a reported basis after taking into account a positive 2% currency impact.
Rodolphe Ozun: On slide 10, we highlighted some of the elements which shaped the quarters with two different situations. Champagne and wines proved resilient in the first three months of 2025. We saw modest decline in volume in Champagne, partly due to unfavorable phasing effects linked to distributors in Europe and to the timing of price increases in Japan. However, Champagne benefited from positive price-mix effect, and the outcome was broadly satisfactory. The start of the year was marked by the return of Moët & Chandon as the official Champagne of Formula 1, once again celebrating every victory on the podium with Champagne, as well as the global launch of a limited edition Moët & Chandon collection in collaboration with Farid William.
Rodolphe Ozun: In Kuniak and Spirits, Hennessy's first quarter reflected soft sell-outs in the US and China. We replenished inventories at our distributors' level, but kept inventory days unchanged, and selling was as a result consistent with sell-outs. Given uncertainties around tariffs, we also kept a healthy level of inventories in our local warehouses. These cases have been shipped, but not sold in, and as such did not have any impact on our first quarter revenue.
Rodolphe Ozun: Finally, in spirit, Glenmorangie welcomes Harrison Ford as the face of its whisky, unveiling a 12-episode series entitled Once Upon a Time in Scotland and taking us behind the scenes at the distillery and the Maison also benefited from the success of its triple cask reserve rollout.
Rodolphe Ozun: We're now turning to fashion and leather goods. On slide 12, revenue reached 10.1 billion euros for the first three months of 2025. This represents a 5% decrease on an organic basis, which is the same period last year, and a 4% decrease on the reported basis after taking into account a positive 1% currency. Moving on to slide 13, which lists the key highlights of the quarter by brand, Louis Vuitton saw the unveiling of a new collaboration with renowned Japanese artist Takashi Murakami. after a very successful first chapter revisiting the multicolor pattern created in 2003, recently unveiled chapter two featuring the cherry blossom pattern.
Rodolphe Ozun: The Maison also enriched its leather goods offering with the successful launches of the LV Biker and All In, and debuted the latest collections designed by Nicolas Ghesquière and Phile Williams, including a fashion show retracing Louis Vuitton's travel heritage in Paris, next to the iconic Gare du Nord station. Faithful to its rich heritage of innovation and extraordinary craftsmanship, Louis Vuitton unveiled a new venture in beauty called La Beauté Louis Vuitton and welcomed internationally renowned makeup artist Dame Pat McGrath as Cosmetic Creative Director. The first of these new products will be available this fall. Lastly, Louis Vuitton crafted bespoke trophy trunks for major Grand Prix circuits and was the title partner of the first race of the season in Australia.
Rodolphe Ozun: Christian Dior saw inspiring fashion shows to unveil the new collections designed by Maya Garziacchiuri, as well as the successful start of recent novelties in leather goods, including the Dior Toujours and D-Journey bags and, in high jewellery, the Dior Millie Vantel collection, whose new inspiration from Christian Dior's beloved Millie Laforet garter. Additionally, in just a few days' time, the JOR Retrospective Exhibition, Christian JOR, Designer of Dreams, will open in South Korea. And to mark the occasion, JOR is renewing its partnership with Eva Women's University, a historic private women's university in Seoul.
Rodolphe Ozun: Now to mention a few highlights from some of the other Maisons. L'Européenne continue to see strong momentum in ready-to-wear and leather goods and unveiled its first ever exhibition at Shanghai's Museum of Art Pudong to celebrate the Maison's 100th anniversary. Likewise, Fendi, which also celebrated a hundred years of craftsmanship, hosted a special Coed runway show designed by Silvia Venturi Fendi in the brand's Roman headquarters. Céline is embarking on its new creative journey with creative director Michael Ryder to unveil his first collection in the next few months. Louis Vuitton announced the appointment of Jack McCullough and Lazaro Hernandez as the house's new creative directors, succeeding J.W.
Rodolphe Ozun: Anderson after 11 exceptional years. And Givenchy unveiled his first collection by new creative designer Sarah Burton at the historic headquarters located on Avenue Georges-Saint-Saëns. Finally, RIMOVAR extended its recrafted service to the U.S., while Berluti welcomed several new brand ambassadors and celebrated its 130th anniversary.
Rodolphe Ozun: Moving to perfumes and cosmetics, on slide 15, revenue reached 2.2 billion euros for the first three months of 2025. This represents a 1% decrease on an organic basis, which after taking into account a positive 1% currency impact resulted in stable revenue on a reported basis. Turning on to slide 16, in perfumes and cosmetics, fragrances continue to outperform for most of our brand. Parfum Christian Dior benefited from the enduring appeal of J'adore, supported by a new Eau de Parfum with a fresh design for its legendary amphora bottle, and from a new Dior Homme Parfum, created by Francis Curcio.
Rodolphe Ozun: La collection privée, Gerard's High-End Fragrance Offering, enjoyed excellent growth and now includes a new unisex perfume called Bois Talissier. Finally, the success of Dior Capture and Prestige Nectar de Rose also enabled Christian Dior to grow in skincare. Strong innovation was on display across the other Maisons, with several new scents, including Rose Verde by Guerlain, who also had a good performance in makeup with Rouge G, while Givenchy also added scents to both L'Interdit and Gentleman's Society.
Rodolphe Ozun: Pierre Gasly announced as its new global ambassador. Aquare Di Palma continues to expand, thanks to its emblematic Colonia collection, with the release of Colonia Il Profumo, and Maison Curgeon released a new Kirky Eau de Parfum.
Rodolphe Ozun: In watches and jewellery on site 18, revenue came to 2.5 billion euros in the first three months, stable on an organic basis and up 1% on a reported basis after a positive 1% currency impact. On slide 19, as you can see, our Maison made good progress on strategic priorities, starting with jewellery. Tiffany enjoyed excellent growth across all of its iconic lines, Tiffany T, Lock, Hardware, Knot. The quarter was also marked by the third chapter of Tiffany Titan by File, which features an innovative setting for diamonds, and in high jewellery by the latest collection, revisiting Jean Schlumberger's iconic diamond rock design.
Rodolphe Ozun: In the first quarter, Tiffany made progress on its objective to renovate the store network. Recent openings include a new Taekooly flagship in Chengdu, China. And lastly, Le Maison unveiled the official FIFA Club World Cup trophy, which will be awarded to the winning team and lifted for the first time this year at the final. Bvlgari, in celebration of the Year of the Snake, unveiled Serpenti Infinito, an exhibition in Shanghai and Seoul exploring the meanings and interpretation of the snake, which remained one of Bvlgari's most successful and distinctive designs. Bvlgari also unveiled its new flagship in Milan, on Via Montenapoleone, and took this opportunity to display the first two Bvlgari bracelets and watches created in the 1940s.
Rodolphe Ozun: And on the production front, Bouguerie inaugurated a new watchmaking workshop in Switzerland and announced plans to extend its jewellery manufacturing capacity.
Rodolphe Ozun: In London. Chaumet, meanwhile, unveiled his rejuvenated Bide Chaumet collection and paid tribute to Asia in a high jewellery collection called Bambou, while Fred began a new chapter for its iconic Force this collection with Force this life. A few words about watchmakers, starting with Tag Heuer, which released new editions of some of its best-known racing watches to celebrate its return to Formula One as official timekeeper. Hublot unveiled the world's first multi-coloured ceramic watch, the Big Bang Unico Magic Ceramic, and then it released three chronographs powered by its high-frequency El Primero movement in the Maison's signature blue colour.
Rodolphe Ozun: Now looking at our final business group, Selective Retailing. On slide 21, revenue in the three-month period reached 4.2 billion euros, representing a 1% decrease on an organic basis and stable revenue on a reported basis after taking into account a positive 1% currency impact. Moving on to slide 22, despite a demanding comparison basis, Sephora continued to grow in the first quarter of the year, driven by success of its exclusive brand curation strategy, which resulted in good growth in brick and mortar. The first quarter also saw good performance from Sephora's own product range.
Rodolphe Ozun: Additionally, Sephora premiered a first global film, Beauty and Belonging, at the Sundance Film Festival, which encapsulates Sephora's core values and role as a catalyst for emotions and creativity. And Sephora hosted also a unique pop-up event in London called Rare Beauty and Sephora Dreamland.
Rodolphe Ozun: DFS continued to be held back by low traffic in Hong Kong and Macau, as previously announced DFS's Venice Galleria for Marco Deleschi, which is in operation in H1 this year. And lastly, Le Bon Marché continued its progress thanks to its exclusive and distinctive concepts and a rich array of cultural events.
Rodolphe Ozun: Also sold, Lubomachie MSMI 10, reunited under a new single government structure.
Cecile Cabanis: This ends the Business Group presentation, and I'll hand back to Cecile who will conclude. Thank you, Rodolphe.
Cecile Cabanis: A few closing remarks on my part before moving to Q&A. We continue to face macro-uncertainties and lack of visibility on external factors, and in that context, we remain confident while staying, of course, alert and vigilant. The cycle continues its normalization phase after years of exceptional growth. The best way through downturn cycle is to stay focused. As far as we are concerned, it means continue to deliver the best product with the highest level of quality and excellence. It is also a time to demonstrate our agility and capacity to adjust and react. And while we are being very disciplined in our resource allocation, we also make sure we keep the right level of investment behind our products and brands to continue to increase our competitive edge and be ready to accelerate when the cycle is over.
Rodolphe Ozun: That concludes the presentation and Rodolphe, I propose we move to Q&A. Yes, Operator. Thank you.
Operator: Please open the line for questions. Thank you. Certainly.
Operator: Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad.
Arnold Bismuth: wish to cancel your request please press star 2 and please make sure the mute function on your phone is switched off to allow your signal to reach our equipment again it is star 1 to ask a question And our last question is from Arnold Bismuth from HSBC, please go ahead.
Norbie Schmidt: Yes, hi Rodolphe and Cecile, so I'm Norbie Schmidt from HMVC, I have three questions please. The first one is about the performance by Brand within the fashion and leather division. um sorry for the fashion and leather division so was Louis Vuitton in line with the division worse or better is it the other smaller brand that bring down the overall performance of the division what about Dior so that's my first question my second question is about the performance by nationality for the fashion and leather division would it be possible to have some indication and finally last question about the US since the announcement of tariff have you seen an impact on the feel-good factor and the trafficking source thank you very much Thank you.
Cecile Cabanis: So on your first question on performance by brand in fashion and leather goods. As you imagine, there is some dispersion around the average. What we can say is that LV continues to perform slightly better than the average and Dior continues to perform slightly below than the average. Rodolphe mentioned the very strong performance of L'Europeana. He also mentioned that some of our brands are transitioning to a new creative era. So, it's different realities.
Cecile Cabanis: I'm not going to be more precise, but this is overall what we have. When it comes to nationalities, what we've seen in Q1 is that the main swing factor is really linked to last year's Chinese demand in Japan. So, it continues to be strong in absolute terms, but given the fact that there was a sharp increase, that I mentioned around 32% last year in Q1, we are not having the benefit of the growth this year. For other clientele, we have not witnessed major inflection. American clientele was rather well-oriented. European were slightly better, but of course the impact is very small to total growth.
Cecile Cabanis: And overall, to your last question in terms of tariff, we didn't see a major change in trend and we have nothing to report specifically for Q1. What we can see is that on fashion and leather goods we continue to see a solid growth, and it has been the case for the past six months. Now it's true that aspirational clientele is always more vulnerable in less positive economic cycles and uncertainties, and it might have had some impact in the recent weeks, but rather on categories like wine and spirits and beauty.
Zuzanna Pusz: We will now take our next question from Zuzanna Pusz from UBS, please go ahead. And good afternoon. Thank you for taking my questions. I'll stick to free as well.
Zuzanna Pusz: So maybe first of all, on pricing, would you be able to confirm please, if there's been any pricing taken for Vuitton or just fashion leather goods as a whole in Q1? And if you plan anything incremental, perhaps for Q2, a night of the potential US tariffs? That's my first question.
Zuzanna Pusz: And then secondly, I know this is not an earnings call, but I guess well, I'll give it a go. Is there any chance, you know, you could tell us how we should maybe think about the margins for fashion leather goods? I don't know whether it's better to talk about H1 or full year. I guess just, you know, to understand, because minus five is obviously, it's probably quite difficult to control costs. So if there's anything, any color, all you could provide to help us a little bit with modeling, I would really appreciate that.
Zuzanna Pusz: And then finally, maybe on the performance of various various consumer segments. So Have you seen any changes specifically in Q1 in terms of the higher end consumer performing weaker than previously or I presume your comments on perfumes and wines and spirits being weaker recently that means that maybe only the aspirational consumer is weaker in the current environment? Just any color around the sort of various consumer cohorts and what you're seeing would be very helpful, specifically in the US. Thank you.
Cecile Cabanis: Okay, thank you for your question. So, in terms of pricing, I'm not going to comment on Q2. On pricing, we have the rule that is quite clear. We refrain to use price as a growth driver. We rather use work on mix, selling more expensive items on average. Still in call, actually, we believe we have still some pricing power. And we've been proving that as long as the value perceived is the right one, products sell. And we've seen a current and recent innovation that can prove that in most of our brands. It's the case of the Mamad trendy, the Toujours Dior, the Biker LV, etc.
Cecile Cabanis: Now, to your point, it's true that we use prices sometimes to offset inflation moderately. Sometimes if there is some swing in currencies, and in the case of tariffs, it's a lever that we are going to consider. What you have to take into account is that it's not one-size-fits-all because we have very different brands, very different models. So, it's something that is done by the maison on a very precise basis to make sure that what we do is competitive and serve the brand. So, I will not comment further. And on your question in terms of impact in Q1, there was a very slight in the revenues, a very slight price positive impact.
Cecile Cabanis: So, that would be on pricing, on margins for fashion and leather goods. So, the usual answer I got from Jean-Jacques was it's a self-call. What I can say, obviously, given the uncertainty that we've been very mindful and very disciplined on the pace at which we allocate resources. You know that it's more difficult to control COGS than OPEX. And you also know that on OPEX, there are different nature of COGS. So, for example, we know that selling expense will continue to grow given their nature and given the acceleration and the investment behind the network. We are working hard on controlling G&A, but there's always some inertia, especially because it's mostly also people.
Cecile Cabanis: And still, we believe we have some room to adjust on marketing costs, which we will do when we need. Of course, we prefer to have growth in order to enhance and add leverage to improve margin. And having said what I said on cost, remember that for us it's key to continue to invest in our networks and behind the brand, because we want to make sure that we exist. downturn cycle very strong and ready when demand bumps back so it's all a matter of balance between adjusting to the current context and ensuring that we keep investing in our long-term growth.
Cecile Cabanis: With all that in mind, what you need to... to keep in mind is that the margin will certainly not improve in H1 because the basis of comparison of last year H1 margin was still very high and with today's assumption we are trying to ensure that we can have some sequential margin improvement versus the exit of last year but again tomorrow there might be new parameters because as you know these days parameters are changing every hour And lastly, on your question on consumer segment... So we are not really working, we do not believe that the offer structure is leading to what is the behavior of the aspirational customer.
Cecile Cabanis: We believe that it's a matter of sentiment, of cycle, of bearing the inflation, and so what we do is we continue to invest and innovate as you've seen in all kinds of price points, make sure that we address these two segments. There is no specific strategy for aspirational customer, and in Q1, there was no specific changing trend for aspirational customer versus Q4.
Cecile Cabanis: Thank you so much. Thank you.
Thomas Chauvet: We will now move to our next question from Thomas Chauvet from Citi. Please go ahead.
Thomas Chauvet: Good evening Cecile and Rodolphe. Thanks for taking my questions. I have three.
Thomas Chauvet: One on U.S. manufacturing. If I'm not mistaken, the three Vuitton ateliers in California and Texas produce about half of your volume output for Vuitton USA. Is there any opportunity to increase that share, particularly on the more sophisticated bags, to mitigate potential tariff risk? And could other brands be produced in this U.S. atelier, maybe some bags of Dior, Fendi, Céline, and share the sort of manufacturing platform with Vuitton?
Thomas Chauvet: Secondly, a follow-up on pricing in Q2. I understand, Cecile, you want to reveal the commercial strategy, of course, but can you tell us how you think about future U.S. prices in the case of, you know, 10 percent or maybe 20 percent tariffs? Would you want to pass that on fully to the U.S. consumer or think maybe spread the price increase across multiple regions to also balance the regional price gap?
Thomas Chauvet: That's my second question. And finally, a follow-up on OPEX as well. Last year, I think you did – you put a very tight grip on expenses in both Q1 and Q2. You had 2 percent, I think, OPEX growth in each half with marketing costs down in absolute value. Is it the minimum threshold? You talked about how to continue to invest, to be ready for the end of that cycle. Is plus 2 percent OPEX growth sort of a sensible budget for at least the first half? And have you already taken specific cost control measures, particularly in the U.S.?
Cecile Cabanis: Thank you. Today is the specific rule of three questions per person. On your question on US manufacturing, yes, LV has three production facilities in the US, but on your numbers, it's rather around one third of local needs than the number you mentioned. There is still capacity, but we'll see at what pace and how much we want that to evolve.
Cecile Cabanis: On local manufacturing, we also have Tiffany, that is doing most of the US products in the US, but not all, so there are still some room in order to move that a bit between the production in Europe and the production in the US, so we are looking at that, obviously.
Cecile Cabanis: It's not something we can do overnight, because it takes quite some time to prepare, but it's something that we can contemplate in a reasonable framework and timeframe. Then, on your Q2 pricing question... and Tariq Mitigation, I think we all need to... stay very calm because we are in unknown territories 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 worst is never certain. Having said that, this is not under our control.
Cecile Cabanis: So back to what is under our control. If price increase is one part, but there are also some other mitigants. And on price, again, it will not be one size fits all. So it's very difficult to answer your question with one number because it can be very different depending on the brand, depending on the categories within the brand. Obviously, you have more pricing power when it comes to core luxury brands rather than wine and spirits where we need to be careful and also beauty. So it's a very detailed, precise and important work that we need to do quietly.
Cecile Cabanis: What I can say is that, and especially for wine and spirits, we have shipped some stocks. So this is not a sustainable solution, but it means that we have a bit of time to reflect and make sure that we have the proper parameters to take the informed decision when we will need to take action.
Cecile Cabanis: And on OPEX, so I should have done the Jean-Jacques way, and I will do it now. No, no, I won't go into more detail. I think already with what I said, I think it's good for a Q1 and a sales call. We are working on making the right balance. And what I said in terms of direction should help you model. Thank you.
Antoine Belge: And our next question is from Antoine Belge from BNP Paribas Exane. Please go ahead. Yes, good evening. It's Antoine at BNP. So, three questions.
Antoine Belge: I'd like to come back on the clusters because we need to explain the four-point delta quarter-on-quarter. And so, if I hear you that Europe actually is slightly improving, European, sorry, and US not collapsing. And I noted they were up to high single digit last quarter. So, have the Chinese gone from, I think, low single digit down to double digit down? Are there also other nations?
Antoine Belge: Question number two is about what you commented about the Vuitton brand doing a bit better, but not massively better. Isn't it a bit disappointing since the brand activated the Noakimi collaboration and launched this new biker bag, which I think is the first proper truly new bag in a number of years? So are we going to see a bit of when there will be the non-recurrence of Noakimi later in the year and softening on that innovation path?
Antoine Belge: And finally, sorry to come back on the margin to make sure I understood. So for fashion and leather, H2, there was a 35% margin at the time. So it was a trough, especially including some one-off, a lot of provisions. But now I see that there is a Formula 1 investment. And so with all this activation that I mentioned, I've seen more advertising recently. So was your comment about that 35% was the trough for H1 and the slight acceleration or re-acceleration in issue would be from that 35% bar? Thank you.
Cecile Cabanis: Thank you Antoine. So, in terms of the different dynamics and clusters to help your math, the first swing factor and the main one is Chinese. And Chinese is very much linked to the deceleration of Japan. So this explains around, so you said four points in total, it explains around three points. So that's the main factor and it's really an important one. We don't see a change in trend in domestic demand for Chinese clientele. And then the rest of it is, we said that American demand has held pretty well and it's increasing versus H2 last year.
Cecile Cabanis: It's a bit less than Q4, so that might explain your last point and I think the maths are right. Then, on your question, so I am... I believe I heard it correctly.
Cecile Cabanis: It was on Murakami and the impact on Murakami. So first, what is very interesting is that Murakami was sold at a premium, and it sold out. So it was indeed a success, but it was not, in terms of proportion, the major part of the sales and the agenda of LV over the quarter. Still, it was a great success, and it also shows that when you have the right execution and the right product and collaboration, then it sells even if you put it at a premium, because again, it was sold out. The second phase is much smaller, but it's an interesting one.
Cecile Cabanis: Then, maybe I wasn't totally clear, but I really didn't want to enter into margin by segment and so on, so when I was commenting the overall margin improvement... Fournot versus Latière and the margin, I was talking overall and not for fashion and leather goods in particular. Again, if we could just refrain from looking at margin, there are many unknowns. What you need to understand is that we are adjusting, we are reacting, we are doing the work on what we can control and where we believe it's important to adjust, but I cannot say more. And lastly, maybe to your question on top line and close serve, keep in mind that Q1 is always over-weighted for Chinese, even Chinese New Year, which is always creating a boost in the proportion of Chinese demand versus the rest of the population.
Cecile Cabanis: Okay, thank you. Just to make sure, so I understood, so my mask, I think that just on the Chinese cluster, it was down probably low teens. Now, Voyageurs. I didn't give that number to... OK, but because if we have to explain three points divided by the weight, you're not close to... Antoine, I will let you make your math and maybe give the mic to others. OK. Thank you.
Chiara Battistini: We will now take our next question from Chiara Battistini from J.P. Morgan. Thank you very much. Good evening Cecil and Rodolphe. Also three questions for me. First one on fashion and leather goods on mix and volumes. Maybe you mentioned the pricing was slightly positive. Can you also comment on the mix and the volume components of growth? The second question on watches and jewellery. I was wondering whether the slowdown sequentially is also down to the Chinese consumer in Japan or maybe there was a bigger slowdown of the versus fashion and leather. And finally a very quick question on wines and spirits.
Chiara Battistini: We saw some articles today going around about a potential spin-off so just wanted to check on your latest thoughts about the wines and spirits division please. Thank you.
Cecile Cabanis: So maybe I start with this one, because we were quite surprised to see another false information by the same media that is now publishing very regularly more and more cases, including sometimes wrong information on numbers. It was the case for Tal Goyer last week or two weeks ago. And it starts to really be a problem to have people writing things that are both very precise but also very wrong. I don't want to give any airtime on this because I think we have more important things to discuss. But one piece of advice, if you want to know things around all those questions, please contact Investor Relations or the media at LVMH because we know the numbers and we know the stories.
Cecile Cabanis: And I will not comment more on this part.
Cecile Cabanis: Then on mix and volume, so yes, I made a comment saying that the price was slightly up, volume was slightly down, and the mix was sluggish overall. So that would be the way you can look at it. Then, on watches and jewellery, you're right to say that the Chinese sequence was a bit different because it started to decrease earlier than for fashion and leather goods last year. So the basis of comparison is a bit different and it's less and it's easier. And then, what we are seeing in watches and jewellery is that we have great progress on the execution of the transformation plan of Tiffany with both all the iconic brands and the renovated stores.
Cecile Cabanis: So we continue to deploy that very consistently and it's paying off. So we continue to progress. And overall, I think that's why I would comment on watches and jewellery.
Luca Solca: And our next question is from Luca Solca from Bernstein, please go ahead. Yes, good evening Cecile and Rodolphe. Maybe the first question on creativity. We saw a number of new appointments in the creative responsibility in the Fashion by the Goods divisions. Can you tell us where you stand in this updating of creative responsibilities? I think there may be a few loose ends still. I don't know whether I missed. the news, but we saw Jonathan Anderson, for example, leaving Louvre, but not being appointed anywhere else. I may be mistaken, but if you could... Give us a sense of where you stand in this process.
Luca Solca: That would be very helpful.
Luca Solca: Then, I was just wondering, in previous difficult times, when we look at 2008, 2009, or even more recently, LVMH has been on the attack when it comes to M&A and when it comes to potential opportunities to secure assets in a market which is more difficult. It seems that this is the shape to come if we look at the impact that all of this debate about tariffs and the most recent decisions in the US have produced. on the stock market and the macroeconomic expectations. Would there be any reason this time to expect a different approach and a different attitude from LVMH or would this be again one of the times when you work to consolidate your leadership in the industry?
Cecile Cabanis: And then third, in general, one of the excesses that industry insiders have been reporting is price. Is it sensible, you think, to anticipate that Mexico could potentially be negative as we normalize from the previous successes, especially if we look again at the fashion like the goods division. Thank you. Thank you, Luca. On creativity, what I would say is that we always need designers which are both creative and aligned with the DNA of the brand and are the right one for the journey that we want to put the brand on. We have some creative changes, as you rightly read, so you have the right information, and I think we are pretty excited by the different changes that will take place soon, some collections and shows, and I don't think I have more to add.
Cecile Cabanis: The second one is coming back a bit to the previous comments, so I won't comment much further. We are always working to consolidate our leadership. There are a lot of moving pieces, and so, as you said, we are very much focused on continuing to execute our agenda in a context where there are a lot of continuing to consolidate and to be very agile at the same time. And on the mix, so our our strategy is always to improve mix. It's the comment I made, we prefer to work on mix than to work on price, which is the comment I made, because price shouldn't be a gross driver, mix should be.
Cecile Cabanis: So we will aim at continuing to work on the mix. And as we saw on recent launches, and Muagami, I said it was priced at the premium and it was sold out. And on the recent launches in terms of bags, it was also a success. So back to the point that whenever you are able to deliver the right product with the right level of quality and in with the demand, then products sell and you have pricing power.
Cecile Cabanis: Thank you, Cecile. Thank you.
Edouard Aubin: Over now to our next question from Edouard Aubin, from Morgan Stanley. Please go ahead. Yeah, good afternoon, Cecile and Rodolphe. So just sorry to come back on the on fashion leather goods. So your CEO at the end of January talked about the year starting well and Vuitton being up 10%. So yet you publish, you reported a double dip kind of decline in terms of Q1. Can you just comment on the trends throughout the quarter? I know it's quite difficult to read, given the timing of Chinese New Year, which obviously helped January. But did things get worse in a linear fashion or clearly towards the end of the quarter?
Edouard Aubin: So that's number one. Number two on the nationality. Cecile, if you can just come back on the Europeans and Japanese, are we right to understand that they remain negative, maybe low single digits for European and need to high single digits for the Japanese in Q1? And then lastly on Sephora, I think earlier, I don't know if you or Rodolphe talked about Sephora being positive still in Q1. But obviously, it looks like there was there was a sequential deceleration. Can you just comment about Sephora by geography? And if you think you're still gaining share in the main US and European markets?
Edouard Aubin: Thank you. Okay, thank you for your question. So on fashion and leather goods and regarding your question in terms of volatility intra-quarter, a few comments there. So yes, because also Chinese New Year was in January and most of Mahakami was launched in January. We had a very good month of January, especially for Vuitton. But overall, we have not seen and that's what I was trying to explain when I said, when I commented on the American demand, the American demand continued to be positive throughout the quarter. So this is an important one because since now six months, we've been enjoying positive growth in fashion and leather goods.
Cecile Cabanis: So, we didn't see any specific change. The only thing is that February did offset January because of the Chinese New Year reversal, and it was last year in February. So, this is overall what happened.
Cecile Cabanis: And then, I mean, we could find a thousand reasons to explain small movement and volatility if we go into the details, but I think we would be here for the full night, and I'm not sure it would really help you in terms of understanding the trends, so I will stop there. As for Japan demand, largely the Japan local demand was consistent with what we had in previous quarters. So, we didn't see any change on the trend on local clientele. And then on Sephora, so yes, there was normalization, which we expected given the pace and the rhythm of growth that we enjoyed throughout last year sequentially.
Cecile Cabanis: In terms of geographies, what we can say is that in the U.S. and quite across the region, including Middle East and Europe, we continue to have successful sephora models when it comes to exclusive brands and stores, and we continue to gain market share in those. In the U.S., we have a bit less momentum when it comes to e-commerce, especially because Amazon is being very aggressive, and being aggressive is mostly regarding price, and we try to avoid this technique, so that would be a place where there is a little bit less momentum.
Cecile Cabanis: But otherwise, it continues to be very strong and gain market share, and the model which has really made sephora differentiation OK, thank you. Thank you.
Louise Singlehurst: And we will now move to our next question from Louise Singlehurst from Goldman Sachs. Please go ahead. Hi, good evening, Cecile and Rodolphe. Thank you for taking my questions. Just two for me. I'm going to come back on the US and fashion and leather. Sorry, can you speak a bit louder because we hear you from afar. Apologies. Can you hear me? Perfect. Thank you very much. I'm going to apologize. I will come back again to the US and just fashion and leather. The minus three for the group for the US. And you talked about fashion and leather being a good performance relatively.
Louise Singlehurst: I think in the last question, you were talking about the American cluster obviously still being positive, but presumably in the US, that was negative given the weight. And just thinking about the performance during the period, presumably there was a bit of a benefit for the American cluster at the beginning with currency dynamics. When we think about spending into Europe, I suppose what we're trying to understand, we've had a period of unprecedented headlines. Typically, when we think historically, you would assume there's an immediate reaction to the consumer. And it'd be really helpful to understand that exit of the American cluster regionally and locally as we look into Q2.
Louise Singlehurst: I know we can't have the answer or crystal ball, but it'd be very helpful to get some context. Thank you.
Cecile Cabanis: Thank you, Louise. So. Several points on the U.S., the first one is that, again, on fashion and leather goods, as well as watch and jewellery. The growth was consistent within the second half of the year and slightly above when we include tourist demand. So that's the first one. The second one, US deceleration, was essentially driven by Sephora, which paid double-digit comps in Q1 given the rate of growth of last year. and Beauty, where the demand is softer than last year, as well as wine and spirits. And we believe that on this path, there might be...
Cecile Cabanis: uh in in the most recent week uh some uh impact of demand given the uncertainty but overall honestly We don't have much to report regarding an underlying trend that would have changed in Q1. is not what we see in the numbers at this stage. April will maybe be different, but in March, except for a soft demand in beauty and a continued soft demand in cognac, the rest was holding pretty well and sometimes better than sequentially lasting. Thank you. That's very helpful. And given the environment we're in, I know you mentioned to demonstrate agility earlier on in the call, and that's clearly what we're looking for.
Cecile Cabanis: But in terms of the plans for the year ahead, is it now time to think a little bit more about the streamlining of activities, a different allocation of investment by region? Is there a review of some of the smaller brands, i.e. in beauty or selective retail? Can you give us any colour in terms of what you're asking from the team? Thank you. Yeah, I think it's not really in the group DNA to just cut activities whenever we face a difficult context. So, I think today the focus is really on managing the current context. We mentioned all the mitigation plans and the upcoming news that we continue to have on U.S.
Cecile Cabanis: tariffs, as well as monitoring the demand, and at the end of the day, doing what we do best, which is continue to ensure that we have the right creative work and the highest quality of products to put on the market. And I think that's really our response.
Operator: Thank you very much. We're approaching an hour. I suggest we take another two questions. Sir, noted.
Charles-Louis Scotti: And the next question is from Charles-Louis Scotti from Kepler-Chevron. Please go ahead. Good evening. Thank you for taking my questions. I have two, please. The first one on the wines and spirits. The CEO mentioned a two year time frame to turn the wine and spirit divisions around and return to growth.
Charles-Louis Scotti: Could you please elaborate on the key initiatives currently being implemented and particularly within the cognac segment? And has there been, in your view, a structural shift in demand for cognac in China or is it purely cyclical?
Charles-Louis Scotti: And second question, could you please provide more granularity on the performance of jewelry brands versus watch brands in shoe one? It appears that jewelry, especially Tiffany, has probably proven more resilient. So can you share any insight on that, please? Thank you.
Cecile Cabanis: Okay, so on your first question, maybe I'll start with the demand on wine and spirit. So overall, what we've seen is champagne held up reasonably well in the U.S. and in Europe. And Cognac continues to suffer from weak demand. And probably, this is what I mentioned, but it's anyone's guess, the U.S. political context might have not helped on demand in the most recent years. As you know, Wine and Spirits. is a category that remains very much linked to contextual issues as it addresses aspirational customers. So on that part, we didn't see any change in demand and we continue to have, in Cognac, a soft demand.
Cecile Cabanis: And then your second question, sorry, I didn't catch... So jewellery versus watches. On jewellery, I think I mentioned that we are seeing continued very good progress on Tiffany transformation plan. We continued to, we said last time that we would continue to renovate stores at a rhythm of 10% per year. We are now around 27%, and we continue to see that renovated stores are performing very well. And same for the Icon, where we've been very. Last year, putting all the efforts behind the icons, they continued to gain some weight within the total portfolio and overperform versus the rest of the portfolio.
Cecile Cabanis: So this is for Tiffany. Bulgari is very much resilient, enjoyed quite a good Chinese New Year. You know, it was the snake year. But the idea was not to do a very big thing around that. So we continue to be very focused on the core product. and to deliver growth. There were some feeding topics for Bulgaria last year, but I will not enter into details because we'll end by commenting the performance in the district for one specific SKU. And I don't think. Good.
Cecile Cabanis: And on watches, we had quite a good response at Watches and Wonders. And we continue to, so Tagoyer is doing very well. You've seen that we have now named Mr. Bavin who will take over, so the Maison will stay independent, but he will continue to, he will coordinate and build on the very good work from Frédéric Arnault on this brand and the others. And then Hublot has been in more difficult times and we are really making sure that we have the right innovation and the right product to put back some energy behind the brand. So that's overall in watches and jewelry.
Dana Telsey: Thank you and we will take now our final question today from Dana Telsey from Telsey Advisory Group. Hi. Good evening, Cecile and Rodolphe. As you think about the U.S.
Dana Telsey: and capital expenditures, is the remodel program on Sephora going as planned or any adjustments? And also, as you think about Tiffany? And lastly, as you think about your production in the U.S., will that stay the same, increase? How do you think of that in the grand spectrum of, as you said, Cecile, every half hour something is Yeah, you're right to mention that. So it will be part of my answer. It depends when you ask me. No, no. More seriously, so today we have some production facility for both LV, which is one third of the production, and Tiffany, which is the majority of what we sell in the US.
Cecile Cabanis: So for both, we can increase the capacity of the production for the US. Still, it's something that you don't do overnight. It's with some constraints in terms of recruiting, training, having the right level of experience and expertise. We are not today contemplating to change radically. But this is what we could do.
Cecile Cabanis: And there was another question on Sephora. Yeah, no, on Sephora, honestly, the performance continues. I mean, they continue to grow. They continue to gain market share. Their model is very strong when it comes to their own store and their shops in shops in shops with all their differentiation with exclusive brands and models. So today, we are being disciplined for any brand when it comes to investment. So it will really depend where, what is the growth plan. I mean, it's like for any investment, it will depend on the ambition and the place and the time. Thank you.
Cecile Cabanis: Now, thank you very much. Please go ahead. Thank you, Operator. Thank you very much on all a nice evening and thank you for attending the call. This concludes today's conference call. Thank you for your participation, ladies and gentlemen.