Luxury stocks climbed on Wednesday after LVMH (EU:MC) signaled a rebound in demand, lifting sentiment across the industry.
LVMH shares surged 12% to over €599 in morning trading following stronger-than-expected third-quarter sales. Peers Hermès (EU:RMS), Kering (EU:KER), Richemont (BIT:1CFR), Burberry (LSE:BRBY) and Moncler (BIT:MONC) also rose between 5% and 8%, reflecting renewed optimism among investors.
The group posted a 1% increase in sales for the quarter, its first year-to-date growth, helped by stronger demand in China. The result offered a boost to the wider luxury sector, which has struggled with a slowdown in discretionary spending throughout the year.
Analysts at JPMorgan Chase & Co. commented: “We anticipate the luxury sector to also be strong today, with positive commentary on most nationalities boding well for a generally better luxury reporting season, especially for companies/brands that went into this more favourable backdrop with strong brand momentum.”
LVMH highlighted that trends in Asia excluding Japan — a key region influenced by Chinese consumers — showed a “noticeable” improvement over the first nine months of the year. “Mainland China turned positive in Q3,” said Chief Financial Officer Cecile Cabanis on a call with analysts.
Cabanis also cautioned that “headwinds remain in the fourth quarter,” citing currency fluctuations and macroeconomic uncertainty, though she reiterated the group’s confidence in the ongoing creative repositioning of its brands. She added that financial progress would “take time” with “gradual sequential improvement.”
Fashion and leather goods, including the powerhouse brands Louis Vuitton and Dior that generate the bulk of LVMH’s profit, recorded a 2% year-on-year decline in Q3 sales. Still, this represented a notable recovery from the 9% drop reported in the second quarter, suggesting a potential inflection point for the division.
The luxury industry overall remains under pressure after the post-pandemic boom faded. Years of aggressive price increases at flagship houses like Louis Vuitton and Dior boosted margins but have also softened demand, particularly among more price-sensitive consumers.
Adding to the challenges are broader economic headwinds, including tariffs imposed by U.S. President Donald Trump, continued stress in China’s property market, and rising jewelry production costs linked to the surge in gold and silver prices.
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