The market’s infatuation with all that shimmers continued in earnest last week, with gold and silver making new all-time highs. But precious metals aren’t the only shiny assets spurring investors into action. High-end luxury brands have also been racing past their more affordable peers as affluent consumers continue to spend like there’s no tomorrow.
Can this trend continue despite tariffs and the increasingly toxic trade war? Recent earnings from premier companies like Louis Vuitton hint at reasons for optimism, but also caution in the face of an unpredictable economic environment.
Bifurcation in Consumer Trends Highlights Luxury Brand Earnings
Diverging consumer trends is a topic we highlighted last month as luxury brands continue to report robust sales growth while mid-to-low tier brands struggle.
A few key dynamics are driving the trend include:
- Affluent consumers feel less of a pinch from tariffs and high-interest rates compared to middle or lower-end consumers.
- Stock market growth over the last three years has boosted more asset-owning households into the affluent level, providing tailwinds toward high-end brands.
- High prices and inflation are forcing all consumers to narrow their purchasing focus, and they’re repeatedly choosing high-end products with long-lasting value.
Prestige brands are exerting their influence right now, and the resulting earnings are sending their stocks soaring. Louis Vuitton is one of these top brands, with more than $90 billion in annual sales and a vast product line across multiple divisions.
LVMH Posts a Surprise Q3 Rebound—But Headwinds Remain
LVMH-Moet Hennessy Louis Vuitton Today
As of 04:05 PM Eastern
- 52-Week Range
- $101.80
▼
$159.97
- Dividend Yield
- 2.10%
Louis Vuitton became LVMH Moet Hennessy Louis Vuitton SE OTC: LVMUY in 1987 when the two companies merged to form a luxury brand conglomerate that sells everything from handbags to jewelry to wines. The company is divided into five divisions, including the legacy Fashion and Leather Goods division and the growing Perfumes and Cosmetics division.
With a market cap approaching $350 billion, LVMH is one of the largest and most recognizable luxury brands in the world.
But despite its prestige, recent quarters had been a struggle for LVMH. Tariffs, inflation, and elevated gold and silver spot prices all hovered over the company like a specter to start the year. However, the company’s Q3 results yielded some positive news that has investors once again optimistic.
During the conference call, CFO Cecile Cabanis was eager to highlight improved performance across all five divisions, including better-than-expected growth from the Perfumes and Cosmetics and Selective Retailing divisions.
Fashion and Leather Goods saw a 2% year-over-year (YOY) decline in growth, which is better than the expected 4% drop and a massive improvement over Q2’s 9% decline. Wine and Spirits grew 1% YOY, while Watches and Jewelry grew 2%.
Overall, LVMH Q3 sales totaled over $21 billion (based on current EUR/USD rates), which represented 1% YOY organic growth. One geographical area Cabanis highlighted is China, where LVMH sales are close to turning positive YOY following a long period of listlessness.
Analysts in general liked what they heard from the LVMH team, and the stock received four upgrades in the last four weeks, including one from Hold to Strong Buy from UBS Group.
Cabanis did note that headwinds remain from LVMH, and they’re coming from several angles. High tariffs remain on luxury goods entering the United States from Europe, and exploding gold and silver prices threaten the margins of LVMH’s Watches and Jewelry Division.
Additionally, China is still a volatile sales environment, and a complete rebound will require incremental progress. Like many conference calls from the retail sector, the tone continues to be one of cautious optimism.
Chart Points to Increasing Upward Momentum
LVMH’s long-term view might be one of cautious strength, but the short-term view is looking more enticing thanks to the daily chart. The stock has lagged for much of the year, up only 7% over the last 12 months and a mere 38% in the previous five years. However, momentum finally appears to be gaining strength in LVMH shares.
The stock bottomed out during the Liberation Day tariff bear market and languished between $100 and $110 per share until August, when the price finally broke above the 50-day simple moving average (SMA) for the first time since March.
A breakout above the 200-day SMA soon followed, and the stock ripped 13% higher on the day after its Q3 2025 earnings release.
The stock has risen by over 25% in the last three months, and the 50-day and 200-day SMAs are on track to form a Golden Cross, a prominent bullish technical signal. The Relative Strength Index (RSI) confirms the upward momentum, although it’s quickly approaching the Overbought threshold, which does flash a warning sign for investors looking to take profits.
However, the short-term trend still looks promising, and long-term fundamentals are improving.
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