LVMH Moët Hennessy Louis Vuitton SE, the world’s largest luxury group, reported a 5% drop in third-quarter organic revenue for its fashion and leather goods division, the first decline since the pandemic. This downturn, driven by weakened demand from Chinese consumers, led to an overall 3% dip in the company’s sales, below analyst expectations.
“Most markets, including mainland China, face economic challenges,” said LVMH CFO Jean-Jacques Guiony. Consumer confidence in China has fallen to pandemic-era lows, despite recent economic stimulus from Beijing, which has yet to meaningfully boost luxury demand.
Sales in China fell 16%, with weaker-than-expected performance in Japan, the US, and Europe further contributing to the slump. LVMH’s disappointing results sent shares of other luxury brands like Ralph Lauren and Estee Lauder lower.
As China’s middle-class shoppers grapple with economic strain, the luxury sector faces continued uncertainty, with analysts noting a more pronounced slowdown than anticipated.
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