Luxury stocks drop as LVMH disappoints; weak China demand.

LVMH's commentary on demand in China was a warning for luxury brands, which have relied on Chinese consumers to drive growth in recent years.

October 17, 2024

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LVMH’s earnings report led to a 3.7% drop in its stock, affecting competitors like L’Or�al (down 2.2%) and Herm�s (down 1.3%).
The company reported weak consumer demand in China.
Analysts doubt China’s recent stimulus will boost spending.

Luxury stock values fell sharply Wednesday, largely due to LVMH’s disappointing earnings and concerns about weak demand from Chinese consumers.

LVMH’s shares decreased by 3.7%, while L’Or�al and Herm�s also saw losses.

The company reported a 3% decline in sales for the third quarter and noted significant drops in demand in China, where organic sales fell 16%.

Despite a challenging environment, LVMH’s CFO mentioned potential recovery in 2024.

However, analysts emphasized that recent policy changes have not significantly improved luxury spending in China.

China’s latest stimulus aimed to increase consumer activity but hasn’t yet shown effective results for luxury brands.

Guiony from LVMH expressed uncertainty about the impact of these measures on consumer spending.

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