By Adam Whittaker

European luxury stocks fell after third-quarter results from industry bellwether LVMH dashed hopes that a sector recovery is under way and renewed concerns over the Chinese market.

In early morning European trade, shares in Louis Vuitton owner LVMH traded 5.9% down at 588.60 euros after reporting a 3% fall in third-quarter organic revenue late Tuesday, missing market expectations.

Kering shares fell 5.4%, Salvatore Ferragamo was down 4.6%, Moncler dropped 3.3%, Hermes fell 3.1%, Swatch Group slipped 3%, Compagnie Financiere Richemont was down 2.5% and Burberry fell 2.2%.

The sector has struggled with falling sales in China as the country experiences an economic slowdown. LVMH said trends among Chinese consumers continue to deteriorate fueling fears on a key market for the industry.

The company gave limited clarity on whether demand in China is bottoming out, and the results show hopes of a recovery across the luxury market were premature, RBC Capital Markets analysts wrote in a research note.

In recent weeks, the performance of European luxury stocks has been heavily tied to the economic outlook in China. Earlier this week, shares across the sector traded down after an update from Chinese officials failed to outline measures to support domestic consumption, partly reversing gains logged earlier this month on hopes about country's fiscal stimulus plan.

Speaking to analysts after the company's third-quarter results Tuesday, LVMH's Chief Financial Officer Jean-Jacques Guiony said Chinese demand will recover when consumer confidence returns, and that china's stimulus measures show that authorities are taking the issue seriously.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

October 16, 2024 03:40 ET (07:40 GMT)

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