Danny Younis asks on LinkedIn: Which of the luxury giant LVMH’s products are the most profitable?

To find out, we look at Operating Profit (EBIT) margins:

• The cleanest & most trusted indicator of profitability
• It’s the go-to metric for serious analysts & investors – why?
• Because it captures real performance after the 4 biggest costs:
  • Manufacturing COGS (67% gross margin)
  • Advertising & Promotion spend (12% of sales)
  • Staffing costs (LVMH has 215,000 employees)
  • Store rents (LVMH has 6,307 stores globally)
• EBIT strips out tax & interest
• Which are external, variable & irrelevant to core operations

LVMH’s margins reveal the true powerhouses of luxury.

Each business segment tells a unique story of profitability and brand strength.

In 2024, LVMH EBIT fell -14% to €19.6 billion.

• Representing an EBIT margin of 23.1% for the group

But by category:

1. Fashion & Leather Goods is the clear #1 for the highest returns

• • It is 48% of LVMH’s total sales
  • But the real cash cow with 78% of its profit!
  • Highest EBIT margins of 37%
  • That’s the reason handbags are THE key foundation for luxury goods co’s
  • Louis Vuitton, Christian Dior Couture, CELINE, Fendi, Loewe, and Loro Piana drive this success

2. Selective Retailing lags with the lowest margins

• • Not surprising given how intensely competitive it is
    Luxury is very profitable
  • But not equally across all categories

Check out chart below for margin rankings: