European Luxury Demand Cycle

Dated events

1. Oct. 9, 2019 · LVMH third-quarter sales beat forecasts despite Hong Kong protests
   LVMH reported third-quarter 2019 sales that were stronger than expected, even though Hong Kong protests had disrupted a major luxury shopping hub and the US-China trade war was making people nervous. Investors were relieved because it showed that wealthy Chinese shoppers were simply buying elsewhere, in mainland China, Europe, and Japan, rather than stopping altogether. This reassured the market that luxury demand could survive geopolitical disruptions by shifting where people shopped.
2. Jan. 26, 2023 · LVMH reports record 2022 results and says Chinese shoppers are returning
   LVMH reported its strongest-ever annual sales and said Chinese shoppers were starting to return after nearly three years of strict COVID restrictions ended in December 2022. Investors across the entire luxury industry got excited because Chinese buyers make up a huge share of global luxury spending, and their return meant a potential boom for handbag, jewelry, and fashion companies. In the weeks that followed, shares of most European luxury companies climbed as tourists from China began traveling again.
3. July 25, 2023 · LVMH Q2 sales growth only narrowly beats forecasts as US demand weakens
   LVMH reported second-quarter sales growth that only narrowly beat forecasts, as shoppers in the United States cut back while Chinese demand stayed strong. This worried investors because the whole luxury sector had been priced for strong growth to continue everywhere. Shares of LVMH and rivals such as Hermès and Kering fell the next day.
4. Jan. 25, 2024 · LVMH reports 2023 results; fourth-quarter sales growth beats forecasts
   LVMH reported fourth-quarter 2023 sales growth that was better than analysts had expected, easing fears that wealthy shoppers were pulling back. Its shares rose about 13% the next day, their biggest one-day gain in 15 years, and other luxury stocks such as Kering, Richemont and Hermès also rose. Growth for the whole year had still slowed from the post-pandemic boom.
5. July 24, 2024 · Luxury shares fall on weak LVMH results; Kering warns of 30% profit drop
   Kering, the owner of Gucci, had already warned that profits would drop sharply, and then LVMH reported disappointing sales, particularly in China and among aspirational shoppers. This double blow made people fear that the slowdown was not just a blip but a deeper downturn in how much people around the world were willing to spend on luxury goods. European luxury shares broadly fell as analysts lowered their expectations for the rest of the year.

Assets named in this scenario · 9

EssilorLuxotticaFerrari N.V.HermèsInditexKeringLVMH Moët Hennessy - Louis Vuitton, Société EuropéenneMonclerPorsche AGRichemont

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