Highlights May 2025

While the sector adjusts its strategies, fragrances are consolidating their position as an accessible and resilient luxury. Experts point to the urgency of leading this scenario with creativity and personalisation to win back consumers that the luxury sector has been losing for the past two years.

Estée Lauder reported a 10% drop in sales and a 53% decline in net profit in its fiscal third quarter of 2025. The fragrance division, however, showed more resilience with a slight decline of 1%, with brands like Le Labo growing by double digits.

Stéphane de La Faverie, CEO of the group, reiterated that the transformation plan is starting to bear fruit. It will run until 2027 and envisages a reduction of between 5,800 and 7,000 jobs, 2,000 of which have already been implemented. However, he warns of the lingering impact of tariffs and the contraction of consumption in China and America.

Puig consolidated its position as one of the most dynamic players in the sector after growing by 7.8% in total sales in the first quarter of 2025. The Fragrances and Fashion segment, which represents 74% of its business, increased by 10.4% (€896.4 million), driven by launches of Byredo and the good performance of Carolina Herrera's Good Girl and Jean Paul Gaultier's Le Male.

The company maintains its growth forecast for the year (6-8% LFL) and expects to improve its adjusted EBITDA margin. It noted that price adjustments in the US and inventory build-up should offset the impact of proposed tariffs.

"Once again, our main segment, Fragrances and Fashion, led our performance, demonstrating the strength of our Prestige and Niche brands," said Marc Puig, the group's chief executive.

Interparfums avoided the downturn with growth of 10.7% in its first fiscal quarter of 2025, thanks to a boost from Jimmy Choo (+40%) and Lacoste (+34%). The Coach (+15%), Montblanc (+14%), Lanvin (15%) and Rochas (13%) brands also grew.

The group, however, has announced price increases in the US to mitigate the impact of tariffs, a measure that could affect volume if consumers perceive a loss of value.

"Despite economic and geopolitical uncertainties, the flexibility of our business model, the quality of our portfolio, with the recent additions of Off-White and Goutal, and the prospect of new licensing agreements give us confidence in the continued growth of our sales and results," said Philippe Benacin, chairman and CEO of Interparfums.

The L'Oréal Group posted growth of 3.5% globally (€11,734.7 million) with L'Oréal Luxury leading the way (+5.8%).

Specifically, the fragrance division grew double digits, outperforming the market with outstanding results in both the women's and men's segments, thanks to the success of Libre and MYSLF by Yves Saint Laurent; Born in Roma by Valentino; Paradoxe by Prada; Idôle by Lancôme; Emporio by Armani; and Wanted by Azzaro.

The company has moderately outperformed the global beauty market in a "particularly difficult and volatile" environment, according to CEO Nicolas Hieronimus.

LVMH closed its first quarter down 3%, although its Perfumes and Cosmetics division held up with a limited decline of 1% (2.178 billion euros), thanks to the strong performance of Dior, Guerlain, Givenchy and Francis Kurkdjian.

In a challenging environment, the group underlines its long-term strategy, based on the strength of its brands, investment in creativity and operational excellence. It will continue to build on the talent of its teams, the diversity of its businesses and the good geographic balance of its revenues to strengthen its global leadership in luxury goods by 2025.

Valued at 75 billion euros and with more than 1.4 billion potential consumers according to ICEX, China is one of the world's most demanding markets. It is forcing Western brands to rethink their storytelling, distribution and their relationship with young people.

Consumers, especially Generation Z, no longer respond to European prestige as before: they are looking for authenticity and emotional stories. Uniform strategies on networks such as WeChat have lost their effectiveness, revealing a crisis of cultural adaptation rather than demand. Brands such as Maison Francis Kurkdjian, Aesop or Shiseido have reduced their digital presence or closed shops.

In addition, the digital channel is becoming less effective as a conversion channel: consumers are becoming more cautious, delaying purchases and opting to purchase abroad. In response, groups such as Estée Lauder are betting on local brands and restructuring their presence. The challenge is no longer to enter China, but to consolidate their presence without losing brand identity.