On LVMH’s first-quarter 2025 earnings call on Monday afternoon, the French luxury giant revealed slightly lowered sales while highlighting recent successes like the debut of Sarah Burton designing for Givenchy and Tag Heuer’s return to sponsoring Formula 1.
But the question on every analyst’s mind was: How is LVMH feeling about tariffs? President Trump’s rollout of disruptive tariffs has been causing headaches for fashion brands for weeks. LVMH is a leader in the fashion space and its CEO, Bernard Arnault, has close ties to Trump. Its reaction to the tariff rollout could serve as an indicator for the rest of the industry of just how dire things could be.
LVMH chief financial officer Cecile Cabanis fielded numerous questions about tariffs from analysts during the company’s investor call. LVMH’s modest downturn in sales, with a 5% decline from the previous quarter, had little to do with tariffs, she said.
But that may change soon. Cabanis said, “Given the uncertainties, we have to be very mindful about how we allocate resources” in the near future. That may translate to higher prices on goods in the U.S., but Cabanis stressed that raising prices is just one tool LVMH has to manage a slowdown in American demand for luxury goods.
For another option, reducing marketing spending would help manage expenses at a time when the American market may be less hot. LVMH is also turning its attention to markets besides the U.S., putting special emphasis on Chinese tourists in Japan, for example.
Trump’s tariffs are ostensibly meant to bring manufacturing back to the U.S., and Cabanis also gave an update on LVMH’s feelings on that. Louis Vuitton has three manufacturing facilities in the U.S. and makes around a third of its volume of U.S.-sold products in the states. Tiffany & Co. also does the majority of its production of U.S.-sold products in the U.S., although both brands rely on materials brought in from other countries.
“There is still capacity to increase, still room to move more production from Europe to the U.S.,” Cabanis said. “We are looking at that, obviously, but it’s not something we can do overnight. It takes quite some time to prepare. We will see at what pace we want to evolve that.”
Cabanis’s comments echo a sentiment held widely across the industry: Even if brands can move their production and manufacturing to the U.S., it’s not something that can be done quickly. Melanie Travis, founder and CEO of the swim brand Andie, which manufactures entirely in China, told Glossy last week that it would take her brand between six and nine months to get a new factory up and running.
A large company like LVMH may be able to absorb the extra costs associated with tariffs while expanding its U.S. production capacity, but smaller brands and startups would have a much harder time managing those increased costs.
LVMH’s CEO Bernard Arnault has previously downplayed the expected impact of tariffs on the company and made statements indicating he was looking to love more production to the U.S.
“It’s clear that we are being strongly pushed by the American authorities to continue to build out our presence. In the current context, this is something that we’re looking at seriously,” Arnault said in January.
But Cabanis’s statements on Monday made that prospect sound far less certain.
“[Moving production] would come with many constraints, like training, having the right level of experience and expertise,” she said. “We are not today contemplating to change our strategy radically, but it is something we could do.”
