L’Oréal Overtakes LVMH at €203B as Luxury Valuations Reprice

LVMH has not stopped producing elite margins. Its market-value loss reflects a lower price on the assumption that Fashion & Leather Goods can compound scarcity-driven growth for years.

L’Oréal ended Tuesday worth roughly €203 billion, just ahead of LVMH at about €201 billion, making the cosmetics group the largest company on the Paris market. LVMH’s fall also pushed it out of Europe’s ten largest listed companies for the first time since 2017.

The crossover reflects valuation compression far more than operating deterioration.

LVMH generated €38.6 billion of revenue in the first half of 2026. Second-quarter organic growth returned to positive territory, and first-half profit from recurring operations was €8.7 billion, a 22.5% margin. Those are not distressed-business economics.

L’Oréal’s first half offered steadier numbers: roughly €23.8 billion of sales, 6.5% adjusted like-for-like growth and a 21.3% operating margin, up 20 basis points. Its mix spans mass beauty, dermatological products, professional products and luxury cosmetics rather than concentrating the equity narrative on a narrower set of very high-priced discretionary categories.

That mix matters when the market changes how much it will pay for long-term growth. Luxury equities were rewarded after the pandemic not only for current earnings but for the belief that brand scarcity, Chinese demand and aspirational consumption would sustain high-margin growth for many years. When that assumption falls, the multiple can compress much faster than reported revenue.

LVMH shares are now roughly 55% below their 2023 peak even though the group remains highly profitable. The market is demanding evidence that stabilisation in Fashion & Leather Goods can become a sustained recovery in volume, mix and pricing power.

L’Oréal’s move ahead shows the price investors currently assign to repeatability. A broader beauty portfolio with mid-single-digit growth is currently worth more than a luxury franchise whose margins remain exceptional but whose long-duration growth assumptions have been reset.

LVMH does not need to prove that it can remain highly profitable. It needs Fashion & Leather Goods to produce enough volume, mix and pricing growth for investors to pay again for a long runway of compounding. A quarter barely above zero organic growth will not restore the old multiple.

Sources

• LVMH, July 27, 2026, H1 results: https://www.lvmh.com/en/publications/accelerating-growth-in-the-second-quarter---solid-first-half-results
• L’Oréal, July 29, 2026, H1 results: https://www.loreal-finance.com/eng/press-release/2026-half-year-results
• MarketScreener, September 15, 2026, Paris market-cap crossover: https://sa.marketscreener.com/news/l-oreal-steals-french-stock-market-crown-from-lvmh-ce785bdddf8df124