LVMH Stock Falls 2.4% as China Luxury Demand Pause Pressures Growth Forecasts

LVMH Moet Hennessy Louis Vuitton SE’s shares fell nearly 2.4% to €428.35, hitting a five-year low of €427 as the company faced renewed scrutiny over its China market performance. The decline followed Bernstein Research’s sector report, which warned that preliminary third-quarter data signaled a pause in the recovery of luxury spending in China, where the group’s organic growth had previously accelerated over the prior four quarters. Bernstein maintained an “Outperform” rating but adjusted its forecasts, reducing the industry’s organic growth forecast for 2026 by 110 basis points to 4.9% from 6.3%, and cutting LVMH’s own sales organic growth estimates for both 2026 and 2027 by 66 basis points each. Earnings per share projections were also downgraded, with LPA estimates reduced by 1% for 2026 and 6.1% for 2027. The downturn extended to competitors Kering and Hermès, whose growth forecasts were similarly revised, though Bernstein singled out Richemont as the standout performer, citing the resilience of its jewelry divisions in mainland China. The catalyst for the move stemmed from first-half 2026 data showing stagnant luxury spending in China, with consumer preferences shifting toward prestige beauty products rather than leather goods—a key driver for LVMH’s fashion and accessories division. Bernstein suggested that sustaining recovery in this segment may require Louis Vuitton to refine its product mix in the second half of 2026, targeting middle-class aspirational buyers. The decline underscored broader challenges in the luxury sector, where China’s economic conditions remain a critical wildcard for growth.