LVMH Sparks Luxury Stock Rally
Key Takeaways
- LVMH reported its first quarterly sales growth (1%) this year, with Q3 revenue of âŹ18.3 billion, surpassing forecasts.
- The strong results fueled a broad luxury sector rally, causing the CAC 40 index to jump nearly 2% and lifting shares of Hermès, L'Oreal, and others.
- LVMH's stock surged 12.2% in a single day, adding over $18 billion to Chairman Bernard Arnault's net worth.
- Analysts view LVMH's performance as a positive indicator and a "ray of hope" for the beleaguered luxury market ahead of upcoming earnings reports.
- The growth was led by LVMH's selective retailing unit, driven by a remarkable performance from beauty retailer Sephora, with solid demand in the U.S. and Europe.
LVMH's latest quarterly earnings revealed a sales growth of 1% for the first time this year, with revenue hitting âŹ18.3 billion, exceeding economists' expectations. This strong performance immediately triggered a broad rally in the luxury sector, with the CAC 40 index closing up nearly 2% on Wednesday. LVMH's stock jumped 12.2%, marking its largest single-day gain since January 2024 and adding approximately $18.18 billion to the fortune of its chairman, Bernard Arnault. Analysts from Citi suggested LVMH's results will set a positive tone for the upcoming luxury reporting season, viewing the figures as a crucial "ray of hope." Other major luxury players, including Hermès, L'Oreal, and Dior, also saw substantial stock increases following the bellwether's announcement. The conglomerate noted solid demand in the U.S. and Europe, alongside a noticeable improvement in trends across Asia (excluding Japan), with its selective retailing unit, led by Sephora, posting the strongest growth.
