LVMH shares soar 14% on strong China demand: European luxury stocks adds $80 bn, investors cheer sector revival – The Times of India

Shares of luxury giant LVMH had their best day in over two decades on Wednesday, soaring as much as 14% after reporting stronger-than-expected quarterly sales that signalled a possible revival in Chinese demand. The rally added nearly $80 billion to the combined market value of European luxury stocks, according to Reuters report.The world’s largest luxury group, which owns Louis Vuitton, Dior, Moët, and Hennessy, posted its first quarterly sales rise this year, beating forecasts and sparking a sector-wide surge. Rivals including Hermès, Kering, Richemont, Burberry, and Moncler gained between 5% and 9% as investors cheered signs that the industry may be pulling out of its two-year slump.“The sales figures indeed surprised investors positively and are likely to keep the sector’s share price momentum alive,” said Stefan Bauknecht, equity portfolio manager at DWS. Analysts at Bernstein noted that sales exceeded expectations across all divisions — from fashion and jewellery to spirits and hospitality.While optimism is returning, several analysts cautioned against reading too much into the rebound. Jefferies noted that it was “too early to talk about a general recovery” and questioned whether early signs from LVMH were being mistaken for an industry-wide turnaround.According to Reuters calculations, the LVMH-led rally added roughly $80 billion in market capitalisation to companies in the STOXX Europe Luxury 10 index — the biggest such jump since early 2024. The gains come amid hopes that sweeping creative and management changes at top brands will begin to pay off.Sales in mainland China — a key growth engine for global luxury — turned positive, with consumers responding well to immersive retail concepts such as Louis Vuitton’s ship-shaped boutique in Shanghai. Sales from travelling Chinese shoppers also improved, though they remained lower than last year.Chinese demand, which accounts for nearly one-third of global luxury sales, had been hit hard by the property downturn, US trade tensions, and economic uncertainty.Ariane Hayate, European equity fund manager at Edmond de Rothschild, said the third-quarter performance was “reassuring”, citing “idiosyncratic” growth factors such as Louis Vuitton’s initiatives in China. LVMH’s fashion and leather goods division — its core profit driver — improved sequentially but still recorded a 2% year-on-year decline.LVMH Chief Financial Officer Cecile Cabanis said on Tuesday that “economic uncertainty and unfavourable exchange rates” would continue to affect the group’s performance in the fourth quarter. UBS forecasts a 4% organic sales growth for the sector next year, expecting momentum to pick up only in the second half of 2026 as new designer collections reach stores.