LVMH's resilience gives luxury shares a boost amid economic gloom

PARIS (Reuters) - Shares in luxury goods companies rose on Wednesday, as LVMH set an upbeat tone with robust third-quarter sales, showing that shoppers have not lost their appetite for high-end designer fashions in the face of a gloomy economic backdrop.

The world's biggest luxury group brushed off concerns that the industry's post-pandemic boom could be cooling, with forecast-beating third quarter sales growth, as free-spending Americans took advantage of the dollar's strength in Europe and business began to improve in China.

"LVMH's 3Q22 print will likely reassure on the health of the high-end consumer in the run-up to the festive season," said Thomas Chauvet of Citi.

Analysts have worried the luxury sector could be hit by deteriorating macroeconomic conditions over the fourth quarter and into next year, but LVMH executives gave an upbeat assessment of the resilience of its affluent client base.

“Luxury is not a proxy for the general economy,” LVMH chief financial officer Jean Jacques Guiony told analysts in a conference call on Tuesday after the sales figures were published.

He said he had seen no signs that lower product categories were underperforming -- a category that has been closely eyed for signs of weakness.

Analysts have been on the look out for signs of weakness in more aspirational products as younger shoppers face rising living costs.

Guiony flagged a strong performance in watches -- luxury products that tend to do well in an inflationary environment because they hold their value. And he also noted a shift in purchases to gold jewelry, from silver, at Tiffany & Co.

LVMH shares were up 1.4% early on Wednesday, Richemont shares traded up 0.6% and Hermes shares were up 1.4%.

Hermes and Kering report third quarter sales on Oct. 20.

(Reporting by Mimosa Spencer. Editing by Jane Merriman)