The insight: A string of solid earnings from luxury companies could be a sign of a broader sector turnaround.

• Kering had “clear sequential improvement” in Q3, CEO Luca de Meo said. While the company’s comparable sales declined 5% YoY, that was markedly better than the 8.7% drop analysts expected.
• Prada’s net sales rose 6.3% YoY in the first nine months of 2025, boosted by soaring demand at Miu Miu, where sales jumped 41%.
• Hermès sales increased 9.6% YoY in Q3 as shoppers spent more on pricey handbags as well as scarves, clothing, and jewelry.
• LVMH unexpectedly returned to growth in Q3, following two quarters of contraction.

The trend: All four companies cited improving conditions in the US and China, the two largest markets for luxury goods.

A recovery in China would be a relief for luxury brands, which have struggled to engage consumers worried about the country’s property crisis and other economic challenges.

• While the environment remains largely unfavorable to luxury sales, LVMH, Kering, and others noted sequential improvement in demand.
• That could be due to a stabilizing property sector in Tier 1 cities, as well as recent stock market gains on the mainland and in Hong Kong, Eric du Halgouët, executive vice president of finance for Hermès, said on the company’s earnings call.
• Brands will also benefit from more favorable YoY comps going forward.

Our take: It will take more than a single positive quarter to indicate a turnaround—especially given the economic volatility in the US and China. However, with wealthy consumers in both markets indicating a renewed desire to spend on luxury goods, brands may well find themselves back in growth mode.