Swatch and Richemont shares fell on Tuesday as disappointing Chinese retail data weighed on the luxury goods sector, with LVMH leading the decline among European peers.
LVMH shares dropped more than 2.6% to €406.55, wiping out the previous day's modest recovery and bringing the stock to a level last seen six years ago. European rivals also retreated: Hermès fell 2.1%, Dior declined 2.1%, and Brunello Cucinelli lost 1.3%. In Switzerland, Richemont shed over 2.5% to CHF 168.70, hitting a three-month low, while Swatch dropped roughly 2.1% to CHF 171.95, erasing nearly all of the more than 12% it had gained since the end of July.
The trigger was a combination of a weak broader market and Chinese retail sales that came in well below expectations. August retail sales rose just 0.4% year on year, against economist forecasts of 0.8%. "That would represent the lowest growth since the pandemic," one trader said, citing a Barclays study. The bank cut its full-year growth forecast for 2025 from 3.7% to 1%.
Chinese consumer demand is central to the sector, with roughly one-third of industry revenue tied to the market. Analysts have already adjusted earnings estimates for the Swiss names: over the past three months, the consensus EPS growth forecast for Swatch was trimmed from minus 10% to minus 11%, while Richemont's was cut from 11.4% to 9.2%.
Sentiment diverges sharply between the two. Fourteen of 20 analysts rate Richemont a buy, with one a sell, and the average price target sits almost 25% above the current share price. For Swatch, only two of 17 analysts recommend a buy, nine advise holding and six a sell, with the average target roughly 1.9% below the current level.
Further data points are on the horizon: LVMH reports third-quarter results on October 9 after the close, Richemont publishes half-year figures on November 13, 2026, and Swatch releases its annual results in January 2027 — each expected to offer additional insight into the health of Chinese consumer spending.
