Recent third-quarter earnings have revealed that the luxury market is still experiencing a decline.

There are several aspects involved. Jean-Jacques Guiony, the chief financial officer of LVMH, said analysts during the company's results call on October 15 that consumer confidence in China "is back in line with the all-time low reached during COVID." The market is also slowing down as a result of higher costs, a wait-and-see mentality in the US related to the impending election, and a stronger yen in Japan.

However, Q3 was a mixed bag, so it's not all bad news. Brands at the top of the luxury pyramid, such as Hermès and Brunello Cucinelli, had positive growth as the ultra-rich remained resilient, but almost everyone else reported negative growth (so far). According to CFO Armelle Poulou, Bottega Veneta was "the bright spot," while Kering revenues fell 16%, with the brand seeing a 5% growth.

According to Guiony, Louis Vuitton did somewhat better than the [division] average [of -5 percent], and Loro Piana, Loewe, and Rimowa "confirmed their solid momentum," according to the press release, even though LVMH does not break out sales of specific homes. The Moncler Group had a 3% decline in sales, with Stone Island and the Moncler brand both seeing a 4% decline.

It is anticipated that Prada and Richemont will improve the mood when they release their quarterly financial results on October 30 and November 8, respectively. According to projections by Morgan Stanley analyst Édouard Aubin, the Prada Group is anticipated to increase 15.4% in the third quarter, with the Prada brand forecast to reach 3.5% growth and Miu Miu continuing to exceed expectations with 82% growth. In contrast, Morgan Stanley projects that Richemont will gain 2.3% thanks to its jewelry brands, which include Cartier and Van Cleef & Arpels, the latter of which is up 4%.

What comes next? Pointing out that the Chinese are "seriously" acting to bolster their economy and that the US Federal Reserve has begun to lower interest rates. According to Luca Solca, a luxury analyst at Bernstein, things ought to get better by 2025. He believes that 2024's second half will probably be the worst yet. For example, according to Solca, LVMH's fashion and leather goods business is anticipated to expand in the low to mid-single digits in the first half of 2025 after declining 5% in the third quarter and continuing to grow negatively in the fourth quarter, as predicted by analysts.