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LVMH shares surged 13 per cent on Wednesday, leading a rally across the luxury sector, as investors hailed the group’s return to growth in the third quarter and bet that the industry was through the worst of a multiyear downturn.
The luxury powerhouse, controlled by French billionaire Bernard Arnault, late on Tuesday reported that revenues rose 1 per cent on an organic basis to €18.3bn in the period, snapping two quarters of decline and surpassing analysts’ forecasts.
Shares in Cartier owner Richemont were up 6 per cent, Moncler climbed 9 per cent and Hermès jumped 7 per cent. Kering, which has struggled to reboot its flagship brand Gucci, was also up 6 per cent.
Cécile Cabanis, LVMH’s chief financial officer, said on a call with analysts that the group was “encouraged by the pockets of improvement we see in all businesses”.
The results, which kicked off the luxury industry’s reporting season, will raise hopes that a corner is being turned after a challenging couple of years. Most other listed luxury companies will report their results over the next two weeks, including Kering and Hermès both reporting on October 22, Brunello Cucinelli on October 16 and Prada on the 23rd.
LVMH’s Paris-listed shares were up 13 per cent at €601.8 in Wednesday morning trading, boosting its market capitalisation by €39bn to €304bn. Before Wednesday’s bounce, the shares had fallen 16 per cent this year.
“The investor hope is that LVMH, and potentially the wider luxury sector, has turned the corner . . . driven by a stronger mainland China,” analysts at Deutsche Bank wrote.
However, they cautioned that “this is more a case of fashion and leather goods numbers being better than relatively subdued expectations rather than a reason to bring out the champagne”.
The luxury leader’s key fashion and leather goods division, which houses brands including Dior and Louis Vuitton, reported an organic sales decline of 2 per cent to €8.5bn in the third quarter — a smaller drop than expected by analysts, and which marked a sequential improvement from a 9 per cent fall in the second quarter.
The industry’s downturn came in the wake of a boom in sales during the pandemic, followed by aggressive price rises that alienated aspirational customers and raised questions about whether improvements in quality had been commensurate with the increases in price.
Weak consumer confidence in China and the imposition of US tariffs this year have added to the industry’s problems. Cabanis said on Tuesday that LVMH would probably push through some moderate price increases to compensate for the impact from tariffs.
Overall, LVMH’s third-quarter sales in mainland China increased 7 per cent, while the US rose 3 per cent. Revenues in Europe declined 2 per cent on lower tourist spending.
Cabanis said the group’s fashion and leather goods division — its biggest by revenues and profits — benefited from “solid local demand” and that the division’s sales in China turned positive in the quarter. The finance chief called out “steep improvements” in sales of Louis Vuitton, a key profit driver, in China.
“After a challenging multiyear period, we believe the business is closer to the trough,” analysts at RBC wrote, though they noted that “question marks remain” around the underlying demand for “soft luxury”, namely handbags, clothes and shoes.
LVMH and its luxury peers are hoping that the arrival of new creative talent at brands including Dior, Loewe, Gucci and Chanel will help reignite demand.
Dior’s new creative director, Jonathan Anderson, showed his first women’s collection in Paris this month, though most of his product will not be available in stores until later this year. Cabanis said she expected the new creative teams to have an impact in the first half of 2026.
LVMH said Dior, which has been the harder hit among LVMH’s big brands during the downturn, saw improvements in demand from Chinese, South Korean and American consumers.
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