Jefferies sees LVMH facing further demand headwinds into year-end

what happened

According to analysts at Jefferies, as reported by Market Talk, LVMH could keep facing weak demand in the final three months of the year. The reason is a third quarter that came in below expectations and left the group with an underwhelming picture.

The French luxury conglomerate said sales at its main fashion and leather goods division fell 5% on the year, with a slowdown in Chinese demand weighing on the segment. In a research note, Jefferies says there are signs of a muted rebound in the fourth quarter, but the evidence is still thin, and the weaker trends of the third quarter likely carried into the past five weeks.

The analysts added that they remain cautious about the broader luxury outlook. LVMH shares fell 2.6% on the news.

why it matters

For markets, this is a signal that hopes for a rebound in Chinese demand for luxury goods may not materialise by year-end. For investors in the sector's largest players, it is a factor likely to weigh on expectations for upcoming quarterly results.

market impact

LVMH shares: weak Chinese demand pressures expectations for group revenue

• ▼LVMH shares pressure down — weak demand expected through year-end after third-quarter sales fell 5%

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instruments