Luxury stocks are soaring after Louis Vuitton beats sales forecasts despite Hong Kong protests
- Luxury fashion stocks are soaring after LVMH, the parent company of Louis Vuitton and Moët, revealed better than expected sales for the third quarter.
- Investors feared the Hong Kong protests would dry up luxury brands' sales, but the strong showing by LVMH, a bellwether for fashion brands, suggested otherwise.
- LVMH climbed 4.6%, Hermes rose 3.4%, and Gucci-parent Kering rose 5.3%.
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Luxury fashion brands soared on Thursday after LVMH, the parent company of Louis Vuitton and Moët, revealed its third-quarter sales were better than expected.LVMH reported a 19% rise in organic revenue from fashion and leather goods in the period, beating the 15% increase expected by Bloomberg's analysts. The luxury goods titan's overall revenue jumped 17%, contributing to a 16% rise for the first nine months of 2019. Sales across its other divisions - wines and spirits, perfumes and cosmetics, watches and jewelry, and selective retailing - rose in the first three quarters.Advertisement
LVMH often serves as a canary in the coal mine for how other fashion brands are performing. Investors sent its stock up 4.6% in morning trading - surpassing the 0.2% rise for France's CAC 40 index - and drove shares in Hermes up 3.4%, Gucci-parent Kering up 5.3%, and Tiffany and Co. up 2.2%.
Investors had feared mass protests in Hong Kong would weigh on sales of luxury fashion brands, particularly after Tiffany's reported it lost six full shopping days due to unplanned store closures last quarter. However, LVMH's robust performance suggests the unrest hasn't changed buying habits, or other markets made up for regional weakness."The United States and Europe saw good progress in the third quarter, as did Asia, despite the difficult context in Hong Kong," LVMH said its press release. It added that it would continue to be "vigilant" in "an uncertain geopolitical context."
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