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Ladies and gentlemen, good afternoon, and welcome to today's conference call. I'm Robert Fouzan, Director of Financial Communications at LVMH, and with me is Cécile Gabenis, our Chief Financial Officer. Cécile will start by taking you through the key highlights of the first quarter of 2025. I will then comment on performance by business groups, after which Cécile will conclude, and then we'll be happy to take your questions. As a reminder, certain information to be discussed on today's call is forward-looking and subject to important risks and certainties that could call actual results to defer materially. For these, I refer you to the safe harbor statement included in our press release and on slide two of our presentation. Turning now to our announcement, our release was issued a short while ago in both French and English and is available on the LVH website LVMH.com, as are the slides for today's call. Let's now move on to today's topic, our first quarter figures, passing on to Cecile.

Thank you, Rodolphe. Good afternoon, welcome, and thank you all for attending this call. Starting with slide three, let me give you a few broad comments on the first three months of the year, where LVMH continues to demonstrate resilience. Let me share a few highlights, first on Chinese demand. On the domestic market, trends were consistent with the end of last year. The main swing factor year-to-date is Chinese demand in Japan, as you can imagine. It remains strong in absolute terms, but recycled last year's sharp increase, and therefore no longer contributes to growth in a percentage point. Second comment, despite the context of uncertainty preceding tariffs announcement, American demand for fashion and leather goods and watches and jewelry remained well-oriented and accelerated modestly compared to the second half of last year. Sephora, on the other hand, faced very challenging comps after growing double-digit last year, and this explains the sequential deceleration of the U.S. market at group level. Third comment is that Europe continues to grow. I will let Rodolphe comment on the different activities. Maybe as a broader comment, we continue to witness across our brands the merits of innovation and creativity. When new products are exciting and functional, they perform very well. Moving now to slide four, where you have the revenue bridge for the first three months of 2025. Group revenues reached 20.3 billion euros, down 2 percent on a reported basis and 3 percent inorganic, including a positive 1 percent currency impact. Slide five details the geographical breakdown of revenues in euros. which, as you can see, has remained broadly stable. However, versus Q1 last year, Asia fell three points in the mix, while United States, France, and other markets all rose one point. This is the reflection of Q1 regional performance that you have on the next slide. Starting with U.S., moderate deceleration at minus 3 percent, despite, as I was mentioning, a good performance of fashion and leather goods and watches and jewelry. Japan is slightly negative at minus 1%, recycling last year's exceptional growth of 32%. Asia at minus 11% is reflecting a continued soft demand, which is consistent with the end of last year. And finally, Europe continuing to display positive dynamic with a 2% growth. Rodolphe will now comment the performance of our activities in more detail.

Thank you, Cecile. And we'll start, as usual, with wines and spirits. On slide nine, we showed the wines and spirits business group delivered 1.3 billion euros in revenue for the first three months of 2025. This represents a 9% decrease on an organic basis versus the same period last year, and an 8% decrease on a reported basis after taking into account a positive 1% currency effect. Broken down, champagne and wine generated €0.7 billion in revenue over the three-month period, down 1% on both organic and reported basis. Cognac and spirits recorded €0.6 billion in revenue, down 17% on an organic basis and 15% on a reported basis after taking into account a positive 2% currency impact. On slide 10, we highlighted some of the elements which shaped the quarters with two different situations. Champagne and wines proved resilience in the first three months of 2025. We saw modest decline in volume in champagne, partly due to unfavorable phasing effects linked to distributors in Europe and to the timing of price increases in Japan. However, champagne benefited from positive price mix effect, and the outcome was broadly flattish trends. The start of the year was marked by the return of Moët et Chandon as the official champagne of Formula One, once again celebrating every victory on the podium with champagne, as well as the global launch of a limited edition Moët et Chandon collection in collaboration with Syed Williams. In Cognac and Spirits, Hennessy's first quarter reflected soft sellouts in the US and China, We replenished inventories at our distributors' level, but kept inventory days unchanged, and selling was as a result consistent with sellout. Given uncertainties around tariffs, we also kept a healthy level of inventories in our local warehouses. These cases have been shipped, but not sold in, and as such did not have any impact on our first quarter revenue. Finally, in spirit, Glenmore Energy welcomed Harrison Ford as the face of its whisky, unveiling a 12-episode series entitled Once Upon a Time in Scotland, and taking us behind the scenes at the distillery, and the Maison also benefited from the success of its triple cask reserve rollout. We're now turning to fashion and leather goods on slide 12. Revenue reached 10.1 billion euros for the first three months of 2025. This represents a 5% decrease on an organic basis, such as the same period last year, and a 4% decrease on the reported basis after taking into account a positive 1% currency impact. Moving on to slide 13, which is the key highlights of the quarter by brand. Louis Vuitton saw the unveiling of a new collaboration with renowned Japanese artist Takashi Murakami, which after a very successful first chapter revisiting the multicolored pattern created in 2003, recently unveiled chapter two featuring the cherry blossom pattern. The Maison also enriched its leather goods offering with the successful launches of the LV Biker and All In, and debuted the latest collections designed by Nicolas Ghesquière and Phile Williams, including a fashion show retracing Louis Vuitton's travel heritage in Paris, next to the iconic Gare du Nord station. Faithful to its rich heritage of innovation and extraordinary craftsmanship, Louis Vuitton unveiled a new venture in beauty called La Beauté Louis Vuitton, and welcomed internationally renowned make-up artist Dame Pat McGrath as Cosmetics Creative Director. The first of these new products will be available this fall. Lastly, Louis Vuitton crafted bespoke trophy trunks for major Grand Prix circuits and was the title partner of the first race of the season in Australia. Christian Dior saw inspiring fashion shows to unveil the new collections designed by Maya Gadziak-Uri as well as the successful start of recent novelties in leather goods, including the Dior Toujours and D-Journey bags, and in high jewelry, the Dior Milly Vantel collection, which drew inspiration from Christian Dior's beloved Milly Laforet gardens. Additionally, in just a few days' time, the Dior Retrospective Exhibition Christian Dior Designer of Dreams will open in South Korea, and to mark the occasion, JOR is renewing its partnership with Eva Women's University, a historic private women's university in Seoul. Now, to mention a few highlights from some of the other Maisons. Loro Pierre Marc continued to see strong momentum in ready-to-wear and leather goods, and unveiled its first ever exhibition at Shanghai's Museum of Art Pudong to celebrate the Maison's 100th anniversary. Likewise, Fendi, which also celebrated 100 years of craftsmanship, hosted a special co-ed runway show designed by Silvia Ventoli Fendi in the brand's Roman headquarters. Céline is embarking on its new creative journey with creative director Michael Ryder to unveil his first collection in the next few months. Loewe announced the appointment of Jack McCullough and Lazaro Hernandez as the house's new creative directors, succeeding JW Anderson after 11 exceptional years, and Givenchy unveiled its first collection by new creative designer Sarah Burton at the historic headquarters located on Avenue Georges V. Finally, Rimovar extended its recrafted service to the U.S., while Berluti welcomed several new brand ambassadors, and celebrated its 130th anniversary. Moving to perfumes and cosmetics on slide 15, revenue reached 2.2 billion euros for the first three months of 2025. This represents a 1% decrease on an organic basis, which after taking into account a positive 1% currency impact resulted in stable revenue on a reported basis. Turning on to slide 16, in perfumes and cosmetics, fragrances continued to outperform for most of our brands. Parfum Christian Dior benefited from the enduring appeal of J'adore, supported by a new eau de parfum with a fresh design for its legendary and for our bottle, and from a new Dior Homme parfum created by Francis Kirkdjian. La collection privée, Dior's high-end fragrance offering, enjoyed excellent growth. and now includes a new unisex perfume called Bois Talisman. Finally, the success of Dior Capture and Prestige Nectar de Rose also enabled Christian Dior to grow in skincare. Strong innovation was on display across the other Maison, with several new scents including Rose Verde by Guerlain, who also had a good performance in makeup with Rouge G, while Givenchy also added scents to both L'Interdit and Gentleman's Society, with Pierre Gasly announced as its new global ambassador, at which Di Parma continued to expand thanks to its emblematic Colonia collection with the release of Colonia Il Profumo and Maison Curzon released a new Curqui Eau de Parfum. In watches and jewelry on site 18, revenue came to 2.5 billion euros in the first three months, stable on an organic basis and up 1% on a reported basis after a positive 1% currency impact. On slide 19, as you can see, our maison made good progress on strategic priorities, starting with jewelry. Tiffany enjoyed excellent growth across all of its iconic lines, Tiffany T, lock, hardware, knot, The quarter was also marked by the third chapter of Tiffany Titan by Pharrell, which features an innovative setting for diamonds, and in high jewelry, by the latest Burl on a Pearl collection, revisiting Jean Schlumberger's iconic Burl on Rock design. In the first quarter, Tiffany made progress on its objective to renovate its store network. Recent openings include a new Taikuli flagship in Chengdu, China. And lastly, the Maison unveiled the official FIFA Club World Cup trophy, which will be awarded to the winning team and lifted for the first time this year at the final. Bvlgari, in celebration of the Year of the Snake, unveiled Serpenti Infinito, an exhibition in Shanghai and Seoul exploring the meanings and interpretation of the snake, which remains one of Bvlgari's most successful and distinctive designs. Bouguerie also unveiled its new flagship in Milan on Via Monte Napoleone and took this opportunity to display the first two Boga bracelets and watches created in the 1940s. And on the production front, Bouguerie inaugurated a new watchmaking workshop in Switzerland and announced plans to extend its jewellery manufacturing capacity in Valenza. Chaumet, meanwhile, unveiled his rejuvenated B. de Chaumet collection and paid tribute to Asia in a high jewelry collection called Bamboo, while Fred began a new chapter for its iconic Force Dis collection with Force Dis Rise. A few words about watchmakers, starting with Tag Heuer, which released a new edition of some of its best-known racing watches, to celebrate its return to Formula One as official timekeeper. Hublot unveiled the world's first multicolored ceramic watch, the Big Bang Unico Magic Ceramic, and then it released three chronographs powered by its high-frequency El Primero movement in the Maison's signature blue color. Now looking at our final business group, Selective Retailing, on slide 21. Revenue in the three-month period reached 4.2 billion euros, representing a 1 percent decrease on an organic basis, and stable revenue on a reported basis after taking into account a positive 1 percent currency impact. Moving on to slide 22, despite a demanding comparison basis, Sephora continued to grow in the first quarter of the year, driven by success of its exclusive burn curation strategy, which resulted in good growth in brick and mortar. The first quarter also saw good performance from Sephora's own product range. Additionally, Sephora premiered a first global film, Beauty and Belonging, at the Sundance Film Festival, which encapsulates Sephora's core values, and role as a catalyst for emotions and creativity. And Sephora hosted also a unique pop-up event in London called Rare Beauty and Sephora Dreamland. DFS continued to be held back by low traffic in Hong Kong and Macao, as previously announced DFS's Venice Galleria for Mako Deitelewski-Wilsh's operation in H1 this year. And lastly, Le Bon Marché continued its progress thanks to its exclusive and distinctive concepts and a rich array of cultural events. The quarter also saw Le Bon Marché and La Serre Maritaine reunited under a new single government structure. This ends the business group presentation and I'll hand back to Cécile who will conclude.

Thank you, Rodolphe. A few closing remarks on my part before moving to Q&A. We continue to face macro uncertainties and lack of visibility on external factors, and in that context we remain confident while staying, of course, alert and vigilant. The cycle continues its normalization phase after years of exceptional growth. The best way through the downturn cycle is to stay focused. As far as we are concerned, it means continue to deliver the best product with the highest level of quality and excellence. It is also a time to demonstrate our agility and capacity to adjust and react. And while we are being very disciplined in our resource allocation, We also make sure we keep the high level of investment behind our products and brands to continue to increase our competitive edge and be ready to accelerate when the cycle eases. That concludes the presentation, and Rodolphe, I propose we move to Q&A.

Rodolphe Leclerc Yes, Operator. Thank you. Please open the line for questions.

Thank you, certainly. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star 1 on your telephone keypad. If you wish to cancel your request, please press star 2. And please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, it is star 1 to ask a question. And our first question is from Arnold Bussmuth from HSBC. Please go ahead.

Yes, hi, Rodolphe and Cécile. So I'm Norby Smith from HSBC. I have three questions, please. The first one is about the performance by brands within the fashion and leather division. Sorry, for the fashion and leather division. So was Louis Vuitton in line with the division, worse or better? Is it the other smaller brand that brings down the overall performance of the division? What about Dior? So that's my first question. My second question is about the performance by nationality for the fashion and leather division. Would it be possible to have some indication? And finally, last question about the US. Since the announcement of tariff, have you seen an immediate impact on the feel-good factor and the trafficking stores? Thank you very much.

Thank you. So on your first question on performance by brand in fashion and leather goods, As you imagine, there is some discussion around the average. What we can say is that LV continues to perform slightly better than the average and Dior continues to perform slightly below than the average. Rodolphe mentioned the very strong performance of Loro Piana. He also mentioned that some of our brands are transitioning to a new creative era. So it's different realities. I'm not going to be more precise, but this is overall what we have. When it comes to nationalities, what we've seen in Q1 is that the main swing factor is really linked to last year's Chinese demand in Japan. So it continues to be strong in absolute terms. But given the fact that there was a sharp increase that I mentioned around 32% last year in Q1, we are not having the benefit of the growth this year. For other clientele, we have not witnessed major inflection. American clientele was rather well-oriented. European were slightly better, but of course the impact is very small to total growth. And overall, to your last question in terms of tariffs, we didn't see a major change in trend, and we have nothing to report specifically for Q1. What we can see is that on fashion and leather goods, we continue to see a solid growth, and it has been the case for the past six months. Now it's true that aspirational clientele is always more vulnerable in less positive economic cycles and uncertainties, and it might have had some impact in the recent weeks, but rather on categories like wine and spirits, and beauty.

Thank you.

We will now take our next question from Susanna Pust from UBS. Please go ahead.

Good afternoon. Thank you for taking my questions. I'll stick to free as well. So maybe first of all on pricing, would you be able to confirm, please, if there's been any pricing taken for Vuitton or just fashion leather goods as a whole in Q1? And if you plan anything incremental perhaps for Q2 in light of the potential US tariffs? So that's my first question. Then secondly, I know this is not necessarily an earnings call, but I guess I'll give it a go. Is there any chance you could tell us how we should maybe think about the margins for fashion leather goods? I don't know whether it's better to talk about H1 or full year. I guess just to understand, because minus five is obviously, it's probably quite difficult to control costs. So if there's anything, any color you could provide to help us a little bit with modeling, I would really appreciate that. And then finally, maybe on the performance of various consumer segments. So have you seen any changes specifically in Q1 in terms of sort of the higher end consumer performing weaker than previously or I presume your comments on perfumes and wines and spirits being weaker recently, that means that maybe only the aspirational consumer is weaker in the current environment. Just any color around the sort of various consumer cohorts and what you're seeing would be very helpful, specifically in the US. Thank you.

Okay, thank you for your question. So in terms of pricing, I'm not going to comment on Q2. On pricing, we have the rule that is quite clear. We refrain to use price as a growth driver. We rather use work on mix, selling more expensive items on average. Still in core luxury, we believe we have still some pricing power. And we've been proving that as long as the value perceived is the right one, product sales. And we've seen current and recent innovation that can prove that in most of our brands. It's the case of the Mama at Fendi, the Toujours at Dior, the Biker at LV, etc. Now, to your point, it's true that we use prices sometimes to offset inflation, moderately. Sometimes if there is some swing in currencies, and in the case of tariffs, It's a lever that we are going to consider. What you have to take into account is that it's not one-size-fits-all because we have very different brands, very different models. So it's something that is done by the Maison on a very precise basis to make sure that what we do is competitive and serves the brand. So I will not comment further. And on your question in terms of impact in Q1, there was a very slight, in the revenues, a very slight price positive impact. So that would be on pricing. On margins, for fashion and leather goods, H1 full year. So the usual answer I... I got from Jean-Jacques was it's a sales call. What I can say, obviously, given the uncertainty that we've been very mindful and very disciplined on the pace at which we allocate resources, you know that it's more difficult to control COGS than OPEX, and you also know that on OPEX there are different nature of costs. So, for example, we know that selling expense will continue to grow given their nature and given the acceleration and the investment behind the network. We are working hard on controlling GNA, but there's always some inertia, especially because it's mostly also people. And still, we believe we have some room to adjust on marketing costs, which we will do when we need. Of course, we prefer to have growth in order to enhance and have leverage to improve margin. And having said what I said on cost, remember that for us, it's key to continue to invest in our networks and behind the brand, because we want to make sure that we exit this downturn cycle very strong and ready when demand bounce back. So it's all a matter of balance between adjusting to the current context and ensuring that we keep investing in our long-term growth. With all that in mind, what you need to keep in mind is that the margin will certainly not improve in H1 because the basis of comparison of last year H1 margin was still very high. And with today's assumption, we are trying to ensure that we can have some sequential margin improvement versus the exit of last year. But again, tomorrow there might be new parameters because, as you know, these days parameters are changing every hour. And lastly, on your question on consumer segment, So we are not really working, we do not believe that the offer structure is leading to what is the behavior of the aspirational customer. We believe that it's a matter of sentiment, of cycle, of bearing the inflation. And so what we do is we continue to invest and innovate, as you've seen, in all kinds of price points to make sure that we address these two segments. There is no specific strategy for aspirational customer. And in Q1, there was no specific change in trend for aspirational customer versus Q4. Thank you so much.

Thank you. Next question from Thomas from Citi. Please go ahead.

Good evening, Cecile and Rodolphe. Thanks for taking my questions. I have three, one on U.S. manufacturing. If I'm not mistaken, the three Vuitton ateliers in California and Texas produce about half of your volume output for Vuitton USA. Is there any opportunity to increase that share particularly on the more sophisticated bags to mitigate potential tariff risk? And could other brands be produced in this U.S. atelier? Maybe some bags of Dior, Fendi, Celine, and share the sort of manufacturing platform with Vuitton. Secondly, a follow-up on pricing in Q2. I understand, Cécile, you want to reveal the commercial strategy, of course, but can you tell us how you think about future U.S. prices in the case of a you know, 10% or maybe 20% tariffs. Would you want to pass that on fully to the U.S. consumer or think maybe spread the price increase across multiple regions to also balance the regional price gap? That's my second question. And finally, on the follow-up on OPEX as well, last year, I think you did the, you put a very tight grip on expenses in both Q1 and Q2. You had 2%, I think, OPEX growth in each half with marketing costs down in absolute value? Is it the minimum threshold? You talked about how to continue to invest, to be ready for the end of that cycle. It's plus 2% OPEX growth, sort of a sensible budget for at least the first half. And have you already taken specific cost control measures, particularly in the US? Thank you.

Today is the specific rule of three questions per person. On your question on U.S. manufacturing, yes, LV has three production facilities in the U.S., but on your numbers, it's rather around one-third of local needs than the number you mentioned. There is still capacity, but we'll see at what pace and how much we want that to evolve. On local manufacturing, we also have Tiffany that is doing most of the U.S. products in the U.S., but not all, so there are still some room in order to move that a bit between the production in Europe and the production in the US. So we are looking at that, obviously. It's not something we can do over time, overnight, sorry, because it takes quite something to prepare, but it's something that we can contemplate in a reasonable framework and timeframe. Then on your Q2 pricing question, And tariff mitigation, I think we all need to stay very calm because we are in unknown territories. And we are now in a process with 90-day suspension period, which we can hope will enable some negotiation and bring some maybe positive outcome. The worst is never certain. Having said that, this is not under our control. So back to what is under our control. Price increase is one part, but there are also some other mitigants. And on price, again, it will not be one size fits all. So it's very difficult to answer your question with one number because it can be very different depending on the brand, depending on the categories within the brand. Obviously you have more pricing power when it comes to core luxury brands rather than wine and spirits where we need to be careful and also beauty. So it's a very detailed, precise and important work that we need to do quietly. What I can say is that, and especially for wine and spirit, we have shipped some stock, so this is not a sustainable solution, but it means that we have a bit of time to reflect and make sure that we have the proper parameters to take the informed decision when we will need to take action. And on OPEX, So I should have done the Jean-Jacques way, and I will do it now. I won't go into more details. I think already with what I said, I think it's good for a Q1 and a sales call. We are working on making the right balance, and what I said in terms of direction should help you model.

Thank you.

Thank you. And our next question is from Antoine Belch from BNP Paribas Exxon. Please go ahead.

Yes, good evening. It's Antoine at BNP. So three questions. I'd like to come back on the clusters because we need to explain the four-point delta quarter on quarter. And so if I hear you, that Europe actually is slightly improving, European, sorry, and U.S. not collapsing and I noted they were up mid to high single digit last quarter. So have the Chinese gone from, I think, low single digit down to double digit down? Are there also other nationalities? Question number two is about what you commented about the Vuitton brand doing a bit better, but not massively better. Isn't it a bit disappointing since the brand activated last collaboration and launched this new bag, which I think is the first proper, truly new bag in a number of years. So are we going to see a bit of when there will be the non-recurrence of Morakemi later in the year and softening on that innovation path? And finally, sorry to come back on the margin to make sure I understood, so the For fashion and leather, H2, there was a 35% margin, which we, at the time, saw it was a trough, especially including some one-off, a lot of provisions. But now I see that there is a Formula One investment, and also with all this activation that I mentioned, I've seen more advertising recently. So what is your comment about that 35% was the trough for H2? H1 and the slight acceleration or re-acceleration in H2 would be from that 35% bar. Thank you.

Thank you, Antoine. So in terms of the different dynamics and clusters to help your math, the first swing factor and the main one is Chinese. And Chinese is very much linked to the deceleration of Japan. So this explains around, so you say four points in total, it explains around three points. So that's the main factor, and it's really an important one. We don't see a change in trends in domestic demand for Chinese clientele. And then the rest of it is we said that American demand held pretty well, and it's increasing versus H2 last year. It's a bit less than Q4, so that might explain your last point, and I think the math are right. Then on your question, so I am... I believe I heard it correctly. It was on Murakami and the impact on Murakami. So first, what is very interesting is that Murakami was sold at a premium and it sold out. So it was indeed a success, but it was not in terms of proportion the major part of the sales and the agenda of LV over the quarter. Still, it was a great success and it also shows that when you have the right execution and the right product and collaboration, then it sells even if you put it at a premium because, again, it was sold out. The second phase is much smaller, but it's an interesting one. Then maybe I wasn't totally clear, but I really didn't want to enter into margin by segment and so on. So when I was commenting the overall margin improvement or not versus last year and the margin, I was talking overall and not for fashion and leather goods in particular. Again, if we could just refrain from looking at margin, there are many unknowns. What you need to understand is that we are adjusting, we are reacting, we are doing the work on what we can control and where we believe it's important to adjust. But I cannot say more. And lastly, maybe to your question on top line and cluster, keep in mind that Q1 is always overweighted for Chinese, given Chinese New Year, which is always creating a boost in the proportion of Chinese demand versus the rest of the portfolio.

Okay, thank you. Just to make sure I understood, so my math is in the chat. On the Chinese cluster, it was down probably low teens.

No. Why low teens? I didn't give that number.

Okay. But because if we have to explain three points divided by the weight, you're not close.

I will let you make your math and maybe give the mic to others. Okay. Thank you.

All right.

Thank you. We will now take our next question from Chiara Battistini from JP Morgan. Please go ahead.

Thank you very much. Good evening. Also three questions for me. First one on fashion and leather goods on mix and volumes. Maybe you mentioned the pricing was slightly positive. Can you also comment on the mix and the volume components of growth? The second question on watches and jewelry, I was wondering whether the slowdown sequentially is also down to the Chinese consumer in Japan, or maybe there was a bigger slowdown of the American consumer there versus fashion and leather. And finally, a very quick question on wines and spirits. We saw some articles today going around about a potential spinoff, so just wanted to check on your latest thoughts about the wines and spirits division, please. Thank you. Thanks.

So maybe I start with this one, because we were quite surprised to see another false information by the same media that is now publishing very regularly more and more cases, including sometimes wrong information on numbers. It was the case for Tagoyer last week or two weeks ago. And it starts to really be a problem to have people writing things that are both very precise but also very wrong. I don't want to give any airtime on this because I think we have more important things to discuss. But one piece of advice, if you want to... No things around all those questions. Please contact Investor Relations or the media at LVMH because we know the numbers and we know the story. And I will not comment more on this part. Then on mix and volume, so yes, I made a comment saying that price was slightly up. volume were slightly down and the mix was flattish overall. So that would be the way you can look at it. Then on watches and jewelry, so you're right to say that the Chinese sequence was a bit different because it started to decrease earlier than for fashion and leather goods last year. So the basis of comparison It's a bit different and it's less and it's easier. And then what we are seeing in watches and jewelry is that we have great progress on the execution of the transformation plan of Tiffany with both all the iconic range and the renovated stores. So we continue to deploy that very consistently and it's paying off. So we continue to progress. And overall, I think that's what I would comment on watches and jewelry.

Great. Thank you very much.

And our next question is from Luca Solka from Bernstein. Please go ahead.

Yes. Good evening, Cécile and Rodolphe. Maybe the first question on creativity, we saw a number of new appointments in the creative responsibility in the fashion and leather goods divisions. Can you tell us where you stand in this updating of creative responsibilities? I think there may be a few loose ends still. I don't know whether I missed the news, but we saw Jonathan Anderson, for example, leaving but not being appointed anywhere else. I may be mistaken, but if you could give us a sense of where you stand in this process, that would be very helpful. Then, I was just wondering, in previous difficult times, when we look at 2008, 2009, or even more recently, LVMH has been on the attack when it comes to M&A and when it comes to potential opportunities to secure assets in a market which is more difficult. It seems that this is the shape of things to come if we look at the impact that all of this debate about tariffs and the most recent decisions in the US have produced. on the stock market and the macroeconomic expectations. Would there be any reason this time to expect a different approach and a different attitude from LVMH? Would this be, again, one of the times when you work to consolidate your leadership in the industry? And then third, in general, one of the excesses that LVMH Industry Insiders has been reporting its price. Is it sensible, you think, to anticipate that mix could potentially be negative as we normalize from the previous successes, especially if we look again at the fashion leather goods division? Thank you.

Thank you, Lucas. So on creativity, what I would say is that we always need designers which are both creative and aligned with the DNA of the brand and are the right one for the journey that we want to put the brand on. We have some creative change, as you rightly read, so you have the right information and I think we are pretty excited by the different changes that will display soon some collections and shows and I don't think I have more to add. The second one is coming back a bit to the previous comments so I won't comment much further. We are always working to consolidate our leadership. There are a lot of moving pieces. And so, as you said, we are very much focused on continuing to execute our agenda in a context where there are uncertainties and we need our full concentration to be continuing to consolidate and to be very agile at the same time. And on the mix, so our strategy is always to improve mix. It's the comment I made. We prefer to work on mix than to work on price, which is the comment I made, because price shouldn't be a growth driver. Mix should be. So we will end by continuing to work on the mix. And as we saw on recent launches and Murakami, I said it was priced at the premium and it was sold out. And on the recent launches in terms of bags, it was also a success. So back to the point that whenever you are able to deliver the right product with the right level of quality, And in trend with the demand, then products sell and you have pricing power.

Thank you, Cécile. Thank you. We will now move to our next question from Edouard Aubin from Morgan Stanley. Please go ahead.

Yeah, good afternoon, Cécile and Ronald. So just sorry to come back on fashion leather goods. So your CEO at the end of January talked about the year starting well and Vuitton being up 10%. So yet you published, you reported a double-day kind of decline in terms of Q1. Can you just comment on the trends throughout the quarter? I know it's quite difficult to read given the timing of Chinese New Year, which obviously helped January, but did things get worse in a linear fashion or clearly towards the end of the quarter? So that's number one. Number two, on the nationality, Cécile, if you can just come back on the Europeans and Japanese, are we right to understand that they remain negative, maybe low single digits for Europeans and mid to high single digits for the Japanese in Q1? And then lastly on Sephora, I think earlier, I don't know if it's you or Rodolphe talked about Sephora being positive still in Q1, but obviously it looks like there was a sequential deceleration. Can you just comment about Sephora by geography and if you think you're still gaining share in the main US and European markets? Thank you.

Okay, thank you for your question. So on fashion and leather goods, and regarding your question in terms of volatility intra-quarter, a few comments there. So yes, because also Chinese New Year was in January, and most of Moakami was launched in January. We had a very good month of January, especially for Vuitton. But overall, we have not seen, and that's what I was trying to explain when I said, when I commented on the American demand, the American demand continued to be positive throughout the quarter. So this is an important one because since now six months, we've been enjoying positive growth in fashion and leather goods. So we didn't see any specific change. The only thing is that February did upset January because of the Chinese New Year reversal and it was last year in February. So this is overall what happened. And then, I mean, we could find thousands of reasons to explain small movements and volatility if we go into the details, but I think we would be here for the full night, and I'm not sure it would really help you in terms of understanding the trends, so I will stop there. As for Japan's demand, largely the the Japan local demand was consistent with what we had in previous quarter. So we didn't see any change on the trend on local clientele. And then on Sephora, so yes, there was normalization, which we expected given the pace and the rhythm of growth that we enjoyed throughout last year sequentially. In terms of geographies, what we can say is that in the US and quite across the region, including Middle East and Europe, We continue to have successful Sephora models when it comes to exclusive brands and stores, and we continue to gain market share in those. In the US, we have a bit less momentum when it comes to e-commerce, especially because Amazon is being very aggressive, and being aggressive is mostly regarding price, and we try to avoid this technique so that would be a place where there is a little bit less momentum but otherwise it continues to be very strong and gain market share and the model which is really made safe for us differentiation is continuing to work well.

Okay, thank you. Thank you and we will now move to our next question from Louise Singlehurst from Goldman Sachs. Please go ahead.

Hi, good evening, Cecile and Rudolf. Thank you for taking my questions. Just two for me. I'm going to come back on the U.S. and fashion.

Sorry, can you speak a bit louder because we hear you from... Apologies.

Can you hear me? Perfect. Thank you very much, Cecile. I'm going to apologise. I will come back again to the US and just fashion and leather. The minus three for the group for the US, and you talked about fashion and leather being a good performance relatively. I think in the last question, you were talking about the American cluster obviously still being positive, but presumably in the US... That was negative given the weight and just thinking about the performance during the period, presumably there was a bit of a benefit for the American cluster at the beginning with currency dynamics when we think about spending into Europe. I suppose what we're trying to understand, we've had a period of unprecedented headlines. typically when we think historically you would assume there's an immediate reaction to the consumer and it'd be really helpful to understand that exit of the American cluster regionally and locally as we look into q2 I know we can't have the answer or crystal ball would be very helpful to get some context thank you thank you so

Several points on the U.S. The first one is that, again, on fashion and leather goods as well as watch and jewelry, the growth was consistent within the second half of the year and slightly above when we include tourist demand. So that's the first one. The second one, U.S. deceleration, was essentially driven by Sephora which faced double-digit comps in Q1, given the rate of growth of last year, and beauty, where the demand is softer than last year, as well as wine and spirits. And we believe that on this part, there might be, in the most recent week, some impact of demand, given the uncertainty. But overall, honestly, We don't have much to report regarding an underlying trend that would have changed in Q1. This is not what we see in the numbers at this stage. April will maybe be different, but in March, except for a softer demand in beauty and a continued soft demand in cognac, the rest was holding pretty well and sometimes better than sequentially last year.

Thank you. That's very helpful. And given the environment we're in, I know you mentioned to demonstrate agility earlier on in the call, and that's clearly what we're looking for. But in terms of the plans for the year ahead, is it now time to think a little bit more about the streamlining of activities, a different allocation of investment by region? Is there a review of some of the smaller brands, i.e. in beauty or selective retail? Can you give us any colour in terms of what you're asking from the team? Thank you.

Yeah, I think it's not really in the group DNA to just cut activities whenever we face a difficult context. So I think today the focus is really on managing the current context. We mentioned all the mitigation plans and the upcoming news that we continue to have on U.S. tariffs, as well as monitoring the demand. And at the end of the day, doing what we do best, which is continue to ensure that we have the right creative work and highest quality of products to put on the market. And I think that's really our response.

Thank you very much.

We're approaching an hour. I suggest we take another two questions.

Thank you, sir. Noted. And the next question is from Charles-Louis Scotty from Kepler-Chevreau. Please go ahead.

Good evening. Thank you for taking my questions. I have two, please. The first one on the wines and spirits, the CEO mentioned a two-year timeframe to turn the wine and spirit divisions around and return to growth. Could you please elaborate on the key initiatives currently being implemented, and particularly within the cognac segment? And has there been, in your view, a structural shift in demand for cognac in China, or is it purely cyclical? And second question, could you please provide more granularity on the performance of jewelry brands versus watch brands in Taiwan? It appears that jewelry, especially Tiffany, has probably proven more resilient. So can you share any insight on that, please? Thank you.

Okay, so on your first question, maybe I'll start with the demand on wine and spirits. So overall, what we've seen is champagne held up reasonably well in the U.S. and in Europe, and cognac continues to suffer from weak demand. And probably this is what I mentioned, but it's anyone's guess, the U.S. political context might have not helped on demand in the most recent week. As you know, wine and spirit is a category that remains very much linked to contextual issues as it addresses aspirational customers. So on that part, we didn't see any change in demand, and we continue to have in Cognac a soft demand. And then your second question, sorry, I didn't catch...

Jewellery versus watches.

So, jewellery versus watches. On jewellery, I think I mentioned that we are seeing continued very good progress on Tiffany transformation plan. We continued to, we said last time that we would continue to renovate stores of tourism of 10% per year. We are now around 27% and we continue to see that renovated stores are performing very well. And same for the icons, where we've been very consistently last year putting all the effort behind the icons and continue to gain some weight within the total portfolio. and overperform versus the rest of the portfolio. So this is for Tiffany. Bulgaria is very much resilient, enjoyed quite a good Chinese New Year. You know, it was the snake year. But the idea was not to do a very... big thing around that, so we continue to be very focused on the core product and to deliver growth. There were some fading topics for Bulgari last year, but I will not enter into details because we'll end by commenting the performance in a district for one specific SKU, and I don't think It's good. And on watches, we had quite good response at Watches and Wonders. And we continue to... So Tagoyer is doing very well. You've seen that we have now named Mr. Vavin who will take over. So the Maison will stay independent, but he will continue to... He will coordinate and... and built on the very good work from Frederic Arnault on this brand and the others. And then Hublot has been in more difficult times, and we are really making sure that we have the right innovation and the right product to put back some energy behind the brand. So that's overall in watches and jewelry.

Thank you very much.

Thank you. And we will take now our final question today from Dana Telsey from Telsey Advisory Group. Please go ahead.

Hi. Good evening, Cecile and Adolf. As you think about the U.S. and capital expenditures, is the remodel program on Sephora going as planned or any adjustments? And also, as you think about Tiffany. And lastly, as you think about your production in the U.S., Will that stay the same, increase? How do you think of that in the grand spectrum of, as you said, Cécile, every half hour something is changing?

Yeah, you're right to mention that. So it will be part of my answer. It depends when you ask me. No, no. More seriously, so today we have some production facility for both LV, which is one-third of the production, and Tiffany, which is... the majority of what we sell in the U.S. So for both, we can increase the capacity of the production for the U.S. Still, it's something that you don't do overnight. It's with some constraints in terms of recruiting, training, having the right level of experience and expertise. We are not today contemplating to change radically, but this is what we could do. And there was another question. On Sephora, honestly, the performance continues. I mean, they continue to grow. They continue to gain market share. Their model is very strong when it comes to their own store and their shops-in-shop. with all their differentiation with exclusive brands and models so today we are being disciplined for any brand when it comes to investment so it will really depend where what is the growth plan it's like for any investment it will depend on the ambition and the place and the time

Thank you.

Thank you. Any more questions?

No, thank you very much. Please go ahead, sir. Thank you, operator.

Thank you very much. Have all a nice evening, and thank you for attending the call.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.