LVMH Faces Profit Margin Pressure from Soaring Gold Prices Ahead of Q3 Earnings
LVMH Moët Hennessy Louis Vuitton, the luxury conglomerate behind Tiffany & Co., braces for margin compression as Gold prices breach $4,000/oz. The surge in raw material costs threatens profitability in its high-end jewelry segment, which contributes over 12% of group revenue. Analysts project flat Q3 sales overall, with a 4% decline in fashion/leather goods partially offset by 1% growth in watches/jewelry.
Market participants await the October 13 earnings release for clarity on cost pass-through strategies. The Paris-based luxury giant's ability to maintain pricing power across brands like Bulgari and Tiffany—while navigating input cost inflation—will test its sector leadership. HSBC notes visible weakness in Core fashion categories, representing half of total revenue.
