A fourth quarter under close scrutiny for the luxury sector

There are "classic" quarters... and then there's the fourth quarter. In the luxury sector, it's a bit of a moment of truth: the holiday season, peak traffic in stores, gifts, tourism, launches of key pieces, and above all, the possibility (or not) of maintaining prices without damaging the brand image.

As the earnings releases approached in early 2026, the message was clear: the sector was progressing, but slowly, and expectations for the fourth quarter of 2025 remained cautious, with several observers describing the landscape as mixed. Some players anticipated growth, while others remained on a more fragile trajectory, particularly in fashion and leather goods.

Why is the fourth quarter of 2025 under close scrutiny?

Luxury is not in a generalized crisis. Rather, it is in a sorting phase: highly desirable brands continue to advance, those in transition are fighting harder, and the "aspirational" clientele (those who treat themselves to a beautiful piece from time to time) are making more of a judgment.

Test number 1: Price resistance – A fourth quarter

After several years of price increases, many customers are becoming more sensitive to perceived value : quality, exclusivity, in-store experience, service… and not just the logo. One visible consequence is the rise of discounts and rebates in part of the market, a sign that some collections are selling less easily at full price.

This point is crucial: when promotions take hold, even discreetly, they can erode profit margins… and damage desirability. This is precisely what Q4 highlights, because volumes are higher and trade-offs are faster.

Test number 2: Geography (and the return to normal)

Luxury is global, but its growth isn't at the same pace everywhere. Groups are scrutinizing three areas very closely:

• The United States, which has driven part of the demand in certain segments.
• Japanwas very strong when tourism was booming (then more difficult when the effect faded).
• Asia (including China), where the level of confidence and the recovery in consumption can tip the balance of a quarter.

Recent publications clearly show significant differences between regions, with some areas being very dynamic and others more "hesitant" depending on the brand.

Test number 3: the margins, in silence

Even when sales remain stable, margins can become strained: material costs (precious metals in jewelry, for example), exchange rates, logistics, retail investments, and… commercial discipline.

In the jewelry sector, the surge in metal prices can weigh on margins if it is not fully passed on, and this is a topic that is being closely monitored for 2026.

What the third quarter of 2025 has already revealed (without giving everything away)

Before discussing the fourth quarter, a look back at the third quarter is useful: it provided some signals, sometimes reassuring, sometimes frustrating. There is a sense of stabilization in some areas, but not a uniform recovery.

A fourth quarter with LVMH: improving trends, but vigilance on fashion and leather goods

LVMH mentioned an improvement in trends in the third quarter of 2025, with comments pointing to better sequential performance, even if some divisions remain under pressure.

This is typically the kind of situation where the 4th quarter becomes decisive: fashion and leather goods are a showcase (and an engine), so if demand does not clearly pick up during the most "gift-like" period, the market quickly becomes worried.

And according to analyses reported in the economic press, the group also suffered a marked exchange rate effect during the quarter (a parameter that can obscure the reading if we do not compare "at constant rates").

Kering: Sequential improvement, Gucci in transition

At Kering, the third quarter of 2025 shows a marked improvement compared to the second, although overall performance remains down. The group reports a decrease in revenue in Q3, but with sequential growth and stronger performance in certain brands excluding Gucci.

Gucci, however, remains the most closely watched point: the brand declined in the quarter, but Kering highlights encouraging signs on new products, particularly in leather goods, and a relative improvement in certain areas.

In plain terms: T4 is a traction test. When a brand relaunches, the holiday season is often where you see if the creative proposition is working… or if the relaunch is still too soon.

Hermès: a more regular mechanism

Hermès continues to show reassuring momentum: growth in Q3 2025, with very solid regions (Americas, Japan) and progress in Asia excluding Japan.

What the market likes about Hermès is the feeling of consistency: a limited offering, strong desirability, and the ability to maintain value. Even when growth slows down a bit, the "quality" of that growth remains appreciated.

Richemont: Jewelry as a bulwark

On the Richemont side (Cartier, Van Cleef & Arpels…), the jewelry business has shown great resilience, with quarterly performances above expectations in some recent periods, and sustained growth at constant rates according to Reuters.

This is a key point for Q4: signature gifts in jewelry and watches can hold up very well, even when other segments are more turbulent. But the cost of metals remains a subject to monitor closely, as it directly impacts the economic equation.

Brunello Cucinelli: the optimistic (and much-observed) exception

Brunello Cucinelli is among the houses that maintain a very positive outlook. In a year-end update, the group anticipates a record 2025 fiscal year and expected growth of between 11% and 12% at constant exchange rates, with a very strong fourth quarter forecast.

And that is precisely what the specialized press also pointed out: a double-digit Q4 in a more hesitant market inevitably attracts attention.

The heart of the matter: what the fourth quarter of 2025 will test, in concrete terms

The fourth quarter can be summarized in three very simple and very ruthless questions.

Are customers still buying "at full price"?

Luxury thrives on a delicate balance: desirability + scarcity + quality + service. If brands try to "push" sales too hard (poorly timed restocking, discounts, over-solicited outlets), the brand image can be diluted.

However, we are seeing an increase in discounting in the sector in 2025, with a significant share of products sold on promotion according to some analyses, a sign that the price/product mechanism is not perfect everywhere.

The fourth quarter reveals everything : if a collection is truly desired, it sells. Otherwise, it accumulates.

Is the "luxury gift" still a reflex?

The holiday season is not just a peak in volume, it is also an emotional barometer: luxury is often bought to celebrate, to mark a moment, to give pleasure.

What can support demand despite a more cautious context: Iconic items (bags, small leather goods, silk, perfume, jewelry ). "Experience" purchases (hotels, gastronomy, travel) which sometimes eat into the budget for goods, but can also coexist.

Moreover, sector studies note an overall stability in luxury spending in 2025 (at the global level) despite headwinds, with a rise in the shift towards experience.

Who wins the battle for attention: the fashion houses or the second-hand market?

Another phenomenon is impacting consumption patterns: second-hand goods, which have become a reflex for some customers (budget, investment, hunting for rare items).

Mainstream analyses remind us that the resale market is growing rapidly and even influences the act of buying (some customers think about resale value from the start).

For the 4th quarter, this is an indirect but real issue: when new construction becomes more expensive, part of the demand may shift, especially for customers who want to "treat themselves" without breaking the budget.

The potential winners of the 4th quarter: which strategies work best?

Without a crystal ball (and without a magic promise), we often find the same ingredients in brands that weather the "half-baked" periods better.

A clear offer: less noise, more strong components

When the market is volatile, customers don't want to feel lost. The brands that fare best are often those that: have strong icons, launch consistent new products, and avoid overwhelming the buyer with micro-collections.

It is also a response to the recurring observation that the market has sometimes lacked "hero products" capable of justifying successive price increases.

Impeccable retail execution

Luxury is found in the details: welcome, advice, after-sales service, delivery, alterations, packaging, availability. In a crucial T4 environment, the slightest friction (breakage, mediocre experience, waiting) can be costly.

Hermès illustrates this logic well with a qualitative development of the network and an attention to local customers in several regions, mentioned in its publications.

A commercial discipline (even if it means selling a little less)

It's counterintuitive, but often true: sometimes it's better to sell less than to sell while damaging your image too much. Groups therefore scrutinize: stock levels, the share of wholesale, and exposure to promotional channels.

It's a very different balance depending on the groups (some are very integrated retail, others more exposed to third-party channels).

And after the 4th quarter: what will 2026 look like for luxury?

The general consensus looks like this: no big boom, but a gradual recovery, with more visible winners.

A recovery that is expected, but not "automatic"

Sector studies (observatories, consulting firms) suggest a rather stable year for the entire luxury sector in 2025, with a gradual recovery starting in 2026.

What does this mean for brands? Less room for approximations. More demands on product desirability and more rigor on costs and execution.

Segments to watch closely

• Jewelry : solid, but subject to material cost constraints.
• Fashion and leather goods : highly dependent on creative hits and customer confidence.
• Perfumes / "small luxuries" : often a good buffer, as they are more accessible and very "gift-worthy". (The perfume market also experienced a high intensity of launches in 2025 according to some analyses.)

A fourth quarter that separates brands "in control" from those "in recovery"

The fourth quarter of 2025 is being closely watched because it encompasses everything: desirability, price, volume, retail execution, tourism, gifts, and margins. And in a market where customers compare more, think more carefully, and make more decisive choices, a brand's strength becomes apparent very quickly.

Future publications will focus less on "is luxury doing well or badly" and more on "who controls their own narrative." Those that stay the course with a strong offering, impeccable experience, and clear commercial discipline will emerge stronger. The others will have to adjust, relaunch, clarify, and prove, quarter after quarter, that desirability is not a given.