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:
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:
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