"Wherever there is wealth creation...there is a strong appetite for luxury," LVMH's finance chief said yesterday, while announcing the company's latest results.

The world's biggest luxury goods conglomerate shines when middle-class consumers are getting richer. Right now, that's not what's happening.

LVMH said sales rose 3% in the second quarter, compared with the same period a year ago. The crucial fashion and leather goods division, which drives more than 70% of operating profit, returned to growth for the first time in seven quarters.

This is good news, but demand remains muted-sales in the unit ticked up 1%. Its biggest brand, Louis Vuitton, is barely growing. Christian Dior is doing better as collections by new designer Jonathan Anderson are selling well in the U.S. and Japan.

The results are a reminder that LVMH's stock is a bet on the global middle class, says Bernstein luxury analyst Luca Solca.

Louis Vuitton gets 55% of its sales from middle-income shoppers, Bernstein estimates. That was a huge advantage when these consumers were getting richer in key markets like the U.S. and China. Right now, stagnant real-wage growth and falling home values are crimping Chinese spending in particular.

The parts of LVMH's business that generate sales from richer consumers look healthy. Its watches and jewelry division grew 11% in the second quarter.

The most expensive jewelry ranges at Tiffany & Co. and Bulgari are in demand, especially in markets like South Korea and the U.S. where an AI rally has boosted household wealth.

LVMH will be the stock to own when middle-income households are feeling better about their finances. For now, the priciest brands that cater to the wealthiest households, like Brunello Cucinelli, Hermès and Cartier's owner Richemont, are a safer bet.