LVMH shares rose the most in almost a quarter century after the owner of Louis Vuitton and Christian Dior unexpectedly returned to sales growth, suggesting a slump in luxury demand is easing.
The stock surged as much as 14 percent in Paris, the biggest intraday gain since September 2001. LVMH, widely considered a bellwether, gave a lift to luxury stocks across Europe and beyond.
While LVMH’s third-quarter revenue rose just 1 percent on an organic basis, the increase snapped two quarters of declines and stirred optimism that demand from China, long a driver of growth, might at last be returning. All the company’s divisions topped analysts’ estimates, and the region that includes China contributed to growth for the first time this year.
‘The pace of recovery, stemming from all regions, is encouraging and bodes well for a return to growth next year and beyond,’ JPMorgan analyst Chiara Battistini said in a note.
The results spurred share gains in companies ranging from Gucci-owner Kering SA, which rose as much as 8.8 percent in Paris, to Hermes International and Hong Kong-listed Prada SpA.
Investors will get more evidence on the state of demand, including in China, when Kering and Hermes report sales next week.
LVMH’s sales in the region that includes China rose 2 percent last quarter, after dropping by 9% in the first half, the company said late Tuesday. The group is seeing encouraging demand in the country, Chief Financial Officer Cecile Cabanis, told analysts on a call Tuesday.
Morningstar analyst Jelena Sokolova said in an email that she sees further potential for a pickup in China, where consumers are ‘still sitting on a big chunk of savings post-Covid.’
In the US, LVMH sales increased by 3 percent in the quarter, while revenue from Europe slipped 2 percent as American tourists spent less on pricey goods because of the weaker dollar.
Champagne recovery
LVMH’s struggling wines and spirits division, which suffered two-and-a-half years of slumping revenue, posted growth, helped by a restocking of Champagne in the US and sales of rosé wine.
Cabanis cautioned that the comparable basis for its performance will be tougher in the fourth quarter than in the third. In 2026, those comparables will be easier, she added.
In spite of the recent downturn, the world’s largest luxury group-led by billionaire Bernard Arnault-has kept investing. Earlier this year, Louis Vuitton began offering makeup, selling pound 140 lipstick that helped drive store traffic, Cabanis said. In Shanghai, the group’s biggest brand opened a flagship store, The Louis, in the shape of a ship, which has drawn crowds and garnered attention, the CFO added.
LVMH has also carried out changes at top brands, including Christian Dior Couture. Earlier this year, it named Jonathan Anderson as the new designer, overseeing womenswear, haute couture and menswear. The former Loewe creative director unveiled his first women’s fashion show this month in Paris. His new men’s designs should hit stores in January, with women’s arriving from the second quarter.
LVMH’s Fendi brand, meantime, appointed former Dior womenswear designer Maria Grazia Chiuri as its new chief creative officer, the label said Tuesday. Chiuri will unveil her first collection in Milan in February.