⚠ Still One Luxury CycleModerate threat

Diversification across categories, brands, and regions smooths LVMH's ride, but it is diversification within a single master cycle, and that limit showed plainly in 2024-25. Every LVMH business ultimately sells discretionary indulgence to the world's affluent, so when a broad luxury downturn hits — as the China-led one did — the categories tend to weaken together, and the portfolio cushions the blow rather than avoiding it. Fashion, jewellery, wine, and beauty have their own rhythms, but they share exposure to the wealth, confidence, and spending of the same rich consumers and the same handful of key markets.

So the diversification is real but shallower than it looks: it protects against a problem at one house, not against a downturn in luxury itself. Owners expecting the breadth to deliver steady, all-weather earnings will be disappointed when the master cycle turns. It is a modest but genuine limit on the portfolio's protective power — a reason the group's earnings still swing with the fortunes of the global rich — net profit fell from the 2023 peak to ~€10.9B¹.