Luxury’s big day after LVMH: comeback underway or just a blip?

Key takeaways

• LVMH’s quarterly update hinted at stabilising demand; the sector jumped on the read-through.
• Strength is uneven by brand and channel; pricing discipline matters more than volume.
• Next leg hinges on holiday sell-through, China cadence, and guidance tone.

Set-up: why this week mattered

Luxury has been our laggard theme this year. Sentiment turned sour as growth slowed, China wobbled, and a cautious consumer pinched big-ticket spend. Then came a cleaner signal. LVMH said trends improved in Q3, with firmer demand in Asia and steadier local customers—its first quarter back to growth in 2025. One bridge metric: full-price mix—if it climbs, margins and momentum follow.

High full-price sell-through signals real demand and brand strength. That means how much stock sells at the original price. It protects margins and keeps products desirable. Promotions can boost one quarter by cutting prices. They also train shoppers to wait for discounts and hurt margins. They pull demand forward and weaken the brand if overused.

LVMH’s message pointed to healthier mix and focus on full-price. Read: less deal-driven volume, more demand for core products at list price. Markets took that as stabilisation, not a boom. Shares in LVMH jumped and pulled peers higher across Europe, delivering the sector’s best day in a long while. The question is simple: is luxury back, or is this a relief bounce?

Why luxury stocks jumped yesterday

Two things. First, a bellwether finally printed an upside surprise. LVMH framed Q3 as an improvement in trends, with better momentum in China and resilient local shoppers in Europe and the US, exactly where doubts were highest.

Second, the read-through to the group was broad: investors extrapolated a bottoming process rather than a one-off beat, lifting names from Hermès to Moncler and Richemont. That’s why the move felt bigger than a single earnings day.

Demand is steadier, not uniform

This is not “everything up.” Local spending improved. Travel retail remains patchy. China looks better, but it is not even close to pre-covid levels. China’s luxury market fell roughly 20% in 2024 and is expected to be flat in 2025, according to Bain. Chinese outbound travel is still below pre-Covid: 87 million trips abroad in 2024, about 40% under 2019, and spend 24% lower vs 2019, per U.N. Tourism data cited by Reuters.

Beauty and jewelry are steadier. Lipstick, skincare, and bracelets get bought year-round. Prices are lower. People restock. That makes these lines smoother. Fashion and leather swing more. Handbags, shoes, and ready-to-wear depend on new collections and “hero products”. When these hit, sales and sentiment jump. When they miss, both fade. That is why they “decide the narrative.”

Bottom line: stabilising, not a boom—monitor full-price sell-through in fashion and leather to see if the turn is real.

The bottlenecks are macro and mix

Macro still matters. Currency swings change tourist spending and the value of overseas sales when translated back. Geopolitics and visas can choke travel routes. Uneven flight capacity and higher costs keep some shoppers closer to home. All of this complicates pricing plans across regions and the timing of new collections.

How the tape read it

High-end houses with clear brand heat and tight distribution tend to lead on price and mix. Turnaround stories can work, but execution must show up in product cycles, store productivity, and clean inventory.

Expect the market to reward pricing power and discipline and to fade any “growth” built on discounting. The week’s rally reflected a sector reset, yet leadership will likely narrow to franchises that compound brand equity over time.

The bar was low after months of gloom; LVMH cleared it. That reset the group’s narrative from “falling knife” to “stabilising base.” Peers rallied as investors priced a better holiday set-up and fewer negative surprises. In plain English: proof of stabilisation beat macro noise.

Prefer ideas over single-stock picks? Use Saxo’s Luxury investment theme as an information hub—curated companies, sector context, and updates. For inspiration and education only. Not investment advice.

Four leaders from our luxury theme

LVMH — multi-house scale
Runs leading maisons across fashion, leather, beauty, watches, and spirits. Strengths: unmatched brand portfolio, pricing power, global retail network. Risks: fashion/leather cyclicality, China sensitivity, FX.

Richemont — hard luxury focus
Owner of Cartier, Van Cleef & Arpels, plus specialist watchmakers. Strengths: high-margin jewellery, heritage, controlled distribution. Risks: watch demand swings, wholesale exposure, managing sales mix execution (what you sell, where, and through which channel).

Ferrari — ultra-luxury performance
Low-volume, high-margin cars with a protected order book and strong personalisation. Strengths: scarcity, pricing discipline, diversified lifestyle brand extensions. Risks: model cadence, regulatory costs, macro shocks to ultra-wealth demand.

Hermès — scarcity and craftsmanship
Iconic leather goods with long waitlists and tight distribution. Strengths: extreme brand equity, full-price sell-through, best-in-class margins. Risks: capacity constraints, counterfeiting, FX.

What decides the next move

Cadence, not headlines. Holiday sell-through and full-price mix will trump top-line prints. China cadence—local demand and travel trends—needs to firm without relying on promotions. Guidance tone is the swing factor: look for language on inventory, pricing discipline, and store productivity.

Dates matter: both Kering and Hermès will release third-quarter sales on 22 October, and Richemont interim results on 14 November will either confirm stabilisation or cool the tape. Price discipline plus a steadier China turns hope into trend.