LVMH's fashion and leather goods business reported a 5% sales decline in Q3 2026, marking a setback after a previous quarter of growth. The drop exceeded analyst expectations of 1.8% and reflects weakening demand in China, where early hopes for a turnaround have faded. Broader macroeconomic factors including geopolitical turmoil, inflationary pressures, and conflict in the Middle East have dampened consumer confidence, particularly among "aspirational" luxury buyers.
While the group's overall organic revenue rose 1% to €18.5bn, driven by strong jewelry and beauty retail performance, the fashion division continues to face headwinds. LVMH CFO Cécile Cabanis noted the recovery is being delayed but remains intact, stating there is "nothing structural" impairing the outlook. The luxury sector faces a challenging reporting season, with even top-end brands feeling pressure.
Louis Vuitton specifically suffered reputational damage in China following a trademark dispute with tea brand Molly Tea, impacting consumer trends. Analysts at Jefferies observed the brand has adopted a low-profile marketing approach in response. With LVMH's market value more than halved from its 2023 peak and US luxury spending also showing signs of slowing, the group looks to jewelry and selective retailing divisions to offset ongoing weakness in its core fashion and leather goods segment.
Source: Financial Times Companies · Summarized by HeadlinesBriefing