LVMH's Creaking Sales Cast Pall Over Luxury's Fragile Recovery — Update

By Joshua Kirby

French luxury giant LVMH said sales growth slowed, putting the brakes on a long-awaited recovery in Europe's struggling luxury-goods industry.

The Paris-based group, owner of a stable of fashion, jewelry and champagne brands that constitutes a bellwether for the wider sector, made sales of 18.50 billion euros ($20.72 billion) between July and September, it said Monday. That marks organic growth of just 1% from the same period last year, slowing from the 3% increase the company booked over the second quarter.

The result was in line with the expectations of analysts, according to those polled by Visible Alpha ahead of the print. Still, the group's mainstay fashion division, home to heavyweight brands Louis Vuitton and Dior, booked a 5% drop in sales on year to 8.245 billion euros, below analysts' forecasts.

The division had returned to growth in the second quarter, but the fast drop back into the red suggests LVMH--and its peers--will have to work hard to secure a sustained recovery. A slowdown in Chinese demand weighed on performance in the fashion business, LVMH said, pointing to a "less buoyant" environment in the key market.

The deceleration in sales growth at LVMH casts a pall over the wider sector, which had hoped to put a tough patch behind it. Investors are likely to stay shy of luxury stocks until brands can show firmer acceleration in their top lines, analysts at Bank of America wrote recently.

"Luxury demand has deteriorated in the third quarter," BofA warned.

Shares in the sector have plummeted in recent years as investors note flatlining sales with concern. Shares in Europe-based luxury firms have lost more than 20% on average so far this year, with LVMH among the worst performers. And analysts see little spur to demand on the horizon. A yearslong boom in Chinese demand has fizzled, and the West's aspirational middle classes, vital to brands like Louis Vuitton, are increasingly squeezed by price inflation, damping their confidence to splurge on high-end goods. The simmering war between the U.S. and Israel and Iran has only exacerbated those macroeconomic pressures.

"The reality is that the disposable income of the majority of luxury consumers is under pressure," analysts at brokerage Berenberg wrote in a recent note. That leaves brands struggling to generate reliable sales growth, the analysts said.

"The fragility of demand leaves the sector vulnerable to shocks," Berenberg said. "The luxury supercycle is over."

Other companies in European luxury are due to report their own latest sales figures this month and next, including Gucci parent Kering, exclusive-handbag maker Hermes and Italian fashion house Prada next week. There were some positive signs in LVMH's sales results; the watches and jewelry division--home to Tiffany and Bulgari, as well as a host of upmarket watch brands--recorded a 6% rise in sales on year. The travel-retail business recorded an even zippier 8% increase.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

October 12, 2026 12:33 ET (16:33 GMT)