LVMH’s weaker-than-expected quarterly fashion and leather goods sales, hit by a deterioration in Chinese consumer demand for its flagship Louis Vuitton brand, have raised fresh doubts about the luxury industry’s recovery prospects.
Four sell-side analysts have cut their target price on LVMH shares by an average 9% following the results, the first quarterly report by a major sector player, expecting the miss to also signal weak performance at some of its competitors.
LVMH shares were down 1.5% by 7.30am GMT (3.30pm Singapore time). Its peers Hermes, Kering and Richemont were down by a similar degree.
Europe’s leading luxury groups, mired in a three-year slowdown, have lost around €330 billion (S$472.79 billion) in market value since the start of 2026, with LVMH alone shedding roughly 40%.
“Despite the recent share price weakness, we expect some further pressure on the space as a whole today, with confirmation that the Chinese cluster seems to have taken a material (and bigger than feared) step down”, JPMorgan analysts said in a note to clients.
Recovery to take time, CFO says
LVMH on Oct 12 posted a 5% drop in organic sales at its fashion and leather goods division, which generates nearly half of group revenue, missing expectations in a Visible Alpha consensus for a 1.8% decline.
The group said a “less buoyant environment” in China impacted its revenues, contributing to 1% organic sales growth overall, excluding currency swings, to €18.5 billion, below expectations for 1.3% growth.
Asked about Louis Vuitton’s recovery prospects in a call with analysts, the group’s Chief Financial Officer Cecile Cabanis said: “It takes a bit of time, but I don’t think there are a lot of shortcuts here”.
Adding to investor concerns, growth in LVMH’s watches and jewellery division, home to brands including Bulgari and Tiffany, slowed to 6% from 9% in the first half of 2026, marking a changing trend in one of luxury’s few bright spots. REUTERS
Source : https://www.straitstimes.com/business/market-turns-cold-on-luxury-after-lvmhs-china-letdown
