Citi Reports 6% Drop in US Luxury Spending Ahead of Midterms
by@Reuters
Summary
US luxury spending has declined for the third consecutive month, with credit card purchases dropping 6% in September compared to the previous year, according to retail lender Citi. This decline occurs as the US approaches the midterm elections on November 3, amid rising consumer unease about the economy evidenced by surveys from the Conference Board and University of Michigan. Despite some resilience among brands appealing to high-end consumers, the overall downturn leaves luxury groups with limited opportunities for growth after two years of contraction, a trend expected to be highlighted in upcoming earnings reports, starting with LVMH on October 12.
Tokens
$LVMH$PRTP
Analysis
Citi: Citi is a major global financial institution providing banking, credit, and research services to consumers and businesses worldwide. In this news, Citi analysts released data from credit card transactions showing a continued slowdown in US luxury spending. The research note highlights weakening demand in the sector's largest market amid broader economic uncertainty. LVMH: LVMH is a leading luxury goods conglomerate with brands spanning fashion, watches, jewelry, and wines and spirits. The company is positioned as a key indicator for the luxury industry's performance and is scheduled to report third-quarter sales soon. Analysts expect it to reflect softer US demand during the upcoming earnings period. Kering: Kering is a prominent luxury group owning brands including Gucci, focused on apparel, leather goods, and accessories. It is preparing to release earnings later in October and has indicated an expected slowdown in the US market to analysts. The company exemplifies brands navigating challenges from softer consumer spending in the United States. Lisa Jucca: Lisa Jucca is a Reuters editor overseeing coverage of business and financial stories. She edited the article detailing Citi's findings on US luxury credit card trends. Mark Potter: Mark Potter is a Reuters editor handling international business reporting. He contributed to editing the piece on luxury sector challenges tied to US economic signals. Danielle Kaye: Danielle Kaye is a Reuters reporter in New York focused on economic and market news. She contributed reporting on the luxury spending slowdown and related analyst commentary. Cynthia Osterman: Cynthia Osterman is a Reuters editor involved in refining financial and market news content. She participated in editing the report on declining US luxury spending. Alessandro Parodi: Alessandro Parodi is a Reuters journalist based in Paris covering business and luxury sector developments. He reported on the Citi data and its implications for luxury brands ahead of the US midterms. Earnings Season: Major luxury groups are expected to highlight weaker US demand in their upcoming quarterly reports, with LVMH serving as an early bellwether. Economic Signals: Surveys from organizations including the Conference Board and University of Michigan indicate rising consumer unease about the US economy as midterms approach. Luxury Sector Outlook: Luxury brands have been relying on US affluent consumers, including those benefiting from equity market gains, to counter softer demand in other regions like China.
Categories
macropolitics