PARIS: Shares in French luxury giant LVMH jumped as much as 14 per cent on Wednesday (Oct 15), their biggest daily gain in over two decades, after stronger-than-expected sales and signs of improving demand in China reignited investor optimism across the luxury sector.
The rally added nearly US$80 billion (S$110 billion) in market value to Europe’s leading luxury stocks, according to Reuters calculations.
LVMH, the world’s largest luxury group and owner of brands including Louis Vuitton, Moët & Chandon and Dior, reported its first quarterly sales rise this year, beating analyst forecasts.
RIVALS RIDE THE WAVE
Hermès, Kering, Richemont, Burberry and Moncler all gained between 5 and 9 per cent, as investors bet that the industry may finally be emerging from a two-year slump.
“The sales figures indeed surprised investors positively and are likely to keep the sector’s share price momentum alive,” said Stefan Bauknecht, equity portfolio manager at DWS.
Bernstein noted that sales exceeded expectations across all of LVMH’s divisions: spanning fashion, jewellery, beauty, spirits and hospitality.
Still, some analysts urged caution. Jefferies warned it may be premature to call a sector-wide rebound, suggesting LVMH’s strong performance could be “idiosyncratic” rather than indicative of a broader recovery.
