LVMH reported a 2% decline in year-to-date revenue through Q3 2024, with fashion and leather goods—the company's largest division—missing consensus by 4.8%. Shares traded at €612 Friday morning, down 31% from the April 2023 high of €890 and erasing roughly €90 billion in market capitalization. Kering fell 6.2% on the session to a three-year low; Hermès declined 3.1% but remains only 14% off its own peak, outperforming peers by sixteen percentage points year-to-date.
The fashion division at LVMH posted organic growth of negative 3% in Q3, the first contraction since 2020. Watches and jewelry fell 8%. Selective retailing, anchored by Sephora, grew 5%, but that figure decelerated from 9% in Q2. Management attributed the softness to Chinese consumers, who account for roughly 30% of global luxury spending and have retrenched sharply since mid-2023. Mainland China revenue for the group fell 16% in constant currency terms. North American sales, which had been carrying growth, slowed to 2% from 6% the prior quarter.
Kering's Q3 results were worse. Gucci revenue declined 25% on an organic basis, marking the sixth consecutive quarter of contraction. Saint Laurent fell 12%, and Bottega Veneta dropped 6%. The company's total revenue came in at €4.5 billion, down 15% year-on-year and below the €4.7 billion consensus. Operating margin guidance was cut for the third time this year. Shares closed Friday at €224, the lowest print since November 2017. Hermès, by contrast, posted 11.3% organic growth in Q3, driven by strength in Japan and Europe, where price increases held and foot traffic at flagship stores in Paris and Milan exceeded 2023 levels.
The divergence reflects product cycles and brand discipline. Hermès maintains waitlists on Birkin and Kelly bags, limiting supply even as demand softens. LVMH's Louis Vuitton has flooded certain categories—monogram canvas bags, entry-level shoes—and is now facing inventory clearance in select Asian markets. Kering attempted a creative reset at Gucci in 2023 under designer Sabato De Sarno, but the new aesthetic has not yet converted to sales velocity. Wholesale partners in the U.S. reduced Gucci orders by an estimated 18% for spring 2025 delivery.
What allocators should watch: November 15 is the likely date for LVMH's formal Q3 analyst call, where management will clarify inventory levels and any price adjustment plans for 2025. Kering's CEO transition—Francesca Bellettini was promoted in September—means the next capital markets day, expected in Q1 2025, will set the tone for restructuring timelines and cost targets. Chinese stimulus measures announced in late September have not yet shown up in luxury foot traffic data; October Golden Week figures from UnionPay and Alipay will be published around November 8-10 and will indicate whether consumption is stabilizing. Hermès will report full Q3 details on October 24, and any deceleration there would remove the last pillar of sector optimism.
The sector trades at 16.2x forward earnings, down from 22x in early 2023 but still above the 14.5x trough reached in March 2020. If Chinese demand does not recover by year-end, that multiple compresses further.
The takeaway
Luxury sector sheds €90bn on China slowdown; only Hermès supply discipline holds margins as LVMH and Kering clear inventory.
Editorial & Disclosure Notice: This article was written with artificial intelligence from public sources and is published without individual human review. Artificial intelligence and other digital tools are also used for research, analysis, editing, formatting, and production. Errors, omissions, outdated information, or inaccuracies may occur. References to companies, brands, products, services, organizations, or individuals are for informational and editorial purposes and do not imply endorsement, sponsorship, affiliation, partnership, or approval unless expressly stated. All trademarks and other intellectual property remain the property of their respective owners. Opinions, analysis, estimates, and commentary are informational only and should not be construed as financial, investment, legal, tax, medical, procurement, or other professional advice. Information may be corrected, clarified, or updated after publication. Corrections or removal requests: jenny@pops4.com.
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