LVMH Returns to Growth as Chinese Demand Lifts Third-Quarter Sales

LVMH (LVMH.PA), the world's largest luxury goods conglomerate and a key indicator for the sector, announced a return to sales growth in its third quarter, reporting a modest 1% increase. This slight upswing, the first recorded this year, was primarily attributed to an improvement in demand within the Chinese market, signaling a potential easing of the prolonged industry slump. According to statements from the company, trends in the Asia region, excluding Japan—a segment heavily influenced by China—showed a "noticeable" betterment over the nine-month period, with Mainland China specifically turning positive in the third quarter, as confirmed by Chief Financial Officer Cecile Cabanis. This positive report led to a 7.5% rise in LVMH's U.S. shares.

Analysts at Bernstein described the results as a "strong beat," suggesting a recovery trajectory driven both by the company's internal efforts and more favorable Chinese consumer demand. The group's quarterly sales, encompassing brands such as Louis Vuitton, Dior, Tiffany, and Moët & Chandon, reached €18.28 billion (approximately $21.17 billion). Crucially, the fashion and leather goods division, which contributes over two-thirds of the conglomerate's profits, saw its sales decline by only 2% year-over-year, a significant improvement from the 9% drop recorded in the second quarter and surpassing the overall flat sales and 4% divisional decline anticipated by an HSBC consensus.

The broader luxury industry has faced persistent challenges since the post-pandemic boom concluded, including diminished consumer appetite due to price increases, particularly among less affluent clients, and macroeconomic pressures such as the real estate crisis in China, U.S. tariffs, and rising production costs from increased gold and silver prices. Nevertheless, this update from the first major luxury player to release third-quarter results aligns with a recent shift toward cautious optimism among investors, who cite brands' efforts to introduce more accessible products and a "burst of creativity" from new design leadership as signs that the worst of the downturn may have passed. The resulting rally has propelled LVMH, which briefly ceded its status to rival Hermes this year, back to the top as France's most valuable company.