LVMH Plans US Manufacturing Expansion Amid Tariff Concerns

LVMH is closely monitoring ongoing U.S.-EU tariff negotiations, with CEO Bernard Arnault urging both sides to resolve the dispute to protect international commerce. The company reported a modest decline in sales, noting that while tariffs have not yet significantly impacted revenue, future changes could affect certain divisions, such as wines, spirits, and beauty. LVMH Chief Financial Officer Cécile Cabanis indicated that the company is prepared to implement mitigation strategies, including potential price increases and considering shifting more manufacturing to the U.S., though such moves would take time due to operational constraints. The company currently meets about a third of U.S. demand for Louis Vuitton and Tiffany & Co. through domestic production, but expanding this is not an immediate solution. Cabanis emphasized that luxury customers are less price-sensitive, but broader economic downturns could still influence demand, especially in non-luxury segments like Sephora. LVMH remains cautious, focusing on flexibility and resource allocation as the tariff situation evolves.