Luxury giant LVMH posted third-quarter revenue of 18.5 billion euros ($21.3 billion). Stripping out currency and portfolio effects, that translates into organic growth of just 1 percent, down from 3 percent in the second quarter.

The group blames a less dynamic environment in China. The US, Europe, and Japan, by contrast, delivered solid growth.

In its core fashion and leather goods division, organic sales fell 5 percent. According to an analysis by Bank of America, spending by Chinese customers dropped by a percentage in the mid-teens, and by about 20 percent in mainland China.

Cheap – or Cheap for a Reason?

According to BofA Global Research, the stock now trades at its lowest valuation since 2016: 16.7 times estimated 2027 earnings, against a historical range of 20 to 25. The bank reiterates its buy rating, effectively betting on the return of Chinese shoppers.

Deutsche Bank, on the other hand, sees no turnaround in the near term. Whether the low valuation is an opportunity or the reflection of a lasting rupture hinges on one question: Will China come back?

Other luxury makers have already made up their minds.

Porsche Plans Without China

No one is adapting to the new reality more decisively than Porsche. In the first nine months of the year, the sports carmaker delivered 21,493 vehicles in China, a third fewer than a year earlier.

In 2020, China still accounted for more than a third of its sales. Today, the share is below 10 percent (as previously reported by finews, article in German).

Ahead of the company's Capital Markets Day, Porsche Chief Executive Michael Leiters spoke of a «self-destructive price war» in China. By year-end, Porsche will shrink its dealer network there from about 150 to between 75 and 80 outlets.

Its new break-even point of fewer than 200,000 cars a year rests explicitly on «very conservative» planning for China.

Ferrari Shifts Gears

Even Ferrari is selling fewer cars in China. In the second quarter, it shipped 185 vehicles to mainland China, Hong Kong, and Taiwan, down from 274 a year earlier.

At the same time, Ferrari delivered 210 more cars in Europe, the Middle East, and Africa. The Maranello-based carmaker can evidently redirect its scarce supply to other markets with ease.

Third-quarter results are due on November 3.

Swatch: Yes to Boutiques, No to Retailers

The Swatch Group lifted first-half sales by 8.5 percent at constant exchange rates to 3.12 billion Swiss francs ($3.9 billion). Sales in its own boutiques in mainland China, Hong Kong, and Macau rose 9 percent.

The group, however, described orders from third-party retailers as «modest».

For the watch industry as a whole, China remains a problem. Swiss watch exports to the country fell almost 17 percent in June, according to the Federation of the Swiss Watch Industry, pushing China out of the top six export markets.

Switzerland's free-trade agreement with China, upgraded in August, offers a glimmer of hope. It is set to gradually phase out the remaining tariffs on watches.

Jewelry Shines at Richemont

Richemont paints a more nuanced picture. In the first quarter of its 2026-27 fiscal year, which ran from April to June, sales rose 20 percent at constant exchange rates to 6.33 billion euros.

In mainland China, Hong Kong, and Macau, the group grew by double digits overall. The driving force were jewelry houses such as Cartier and Van Cleef & Arpels, whose sales rose 24 percent worldwide.

Watches tell a different story. Sales at its watch brands, including IWC, Jaeger-LeCoultre, and Vacheron Constantin, declined in mainland China, Hong Kong, and Macau.

Half-year results on November 13 will show whether that picture has changed since.

Kering Faces Its Test Tonight

Kering posted first-half revenue of 7.22 billion euros, up 1 percent on a comparable basis. The Gucci owner said mainland China remained challenging, albeit with improving trends.

Kering reports third-quarter revenue on Wednesday evening. Chief Financial Officer Armelle Poulou had warned in September of a difficult third quarter, citing China among other factors.