Big bling’s big comeback has proved to be very short-lived. LVMH Moet Hennessy Louis Vuitton SE fell short of estimates for its crucial fashion and leather goods division in Monday’s quarterly earnings report. Sales from brands led by Louis Vuitton and Dior fell 5% in the three months to the end of September, worse than the 1.6% drop expected by analysts and marking the eighth decline in the past nine quarters. While some of the weakness is specific to the French firm, the long-promised upturn for the luxury industry looks to be moving further into the future.

A particular note of caution for the industry in LVMH’s earnings was a disappointing performance in jewelry. Although sales expanded by 6% in the quarter, this was well below the 11% growth in the preceding three months, with customers in both China and the US slowing purchases. Baubles have been a bright spot for luxury; as handbags have become pricier in recent years, jewelry had been perceived to offer better value for money. But with the price of gold more than doubling last year, that tailwind may be fading. LVMH said price increases would now moderate, with gold down more than 20% from its January record.

There may be LVMH-specific issues here; its Tiffany & Co. stores enjoyed a particularly buoyant period in the third quarter of 2025, making year-on-year comparisons more challenging. The jeweler has been phasing out some cheaper silver-based lines, which also undermined sales. Still, shares in Cartier owner Richemont fell as much as 2.8% in early Tuesday trading, before paring those losses.

LVMH has had its own issues in China, too. In early July, flagship brand Louis Vuitton won a trademark infringement case against Molly Tea, a small bubble-tea chain in Suzhou. The victory sparked a patriotic backlash, with Chief Financial Officer Cécile Cabanis saying the incident had a “negative impact, at least at the beginning of the quarter.”But Chinese demand was already weakening; Cabanis said the “feel-good factor” deteriorated at about the same time, and sales of fashion and leather goods to Chinese customers fell by a percentage in the mid-teens during the quarter.

The wobble in China leaves luxury brands more exposed to the US. LVMH indicated that sales of designer clothes and bags to Americans, while still growing, also contributed to the division’s deceleration.

Here, too, LVMH may have had idiosyncratic problems. A one-time logistics issue that hurt Louis Vuitton sales by more than a percentage point had the biggest impact in the US. And while the house sells to upmarket clients, it’s also where many people come to buy their first handbag — not a great place to be amid rising inflation and surging borrowing costs. Little wonder that LVMH shares fell as much as 2% on Tuesday morning.

The stock has lost about 40% this year, worse than the 25% decline in the MSCI Europe Textiles, Apparel & Luxury Goods Index. But given that LVMH is the world’s biggest luxury group, with a broad range of compelling brands, the shortfall can’t be blamed entirely on its own failings.

Its performance echoes consumer sentiment in China, where momentum has faded after an improvement late last year and into early 2026. Credit card data from Citigroup Inc. suggests US luxury sales have turned negative over the past three months. It now looks like the recovery that had been expected to materialize this year across the market for top-end goods won’t arrive until 2027.

For LVMH and big bling to return to a more encouraging trajectory, China needs to show signs of improvement. There may be some grounds for optimism; LVMH said the direction of sales at the end of the quarter was better than at the beginning. The Louis, a ship-shaped store in Shanghai, remains busy, indicating that perhaps the Molly Tea effect is waning.

Secondly, the dip in the US could be temporary. While stock market jitters aren’t helpful, consumers may just be showing restraint ahead of the mid-term elections. And for LVMH and rivals that are expanding in jewelry, given the superior performance over handbags, baubles need to maintain their luster.

As for LVMH, it must get Louis Vuitton back on track. Helpfully, the logistics issue is now over. While Kering SA’s Gucci has been reducing the price of some of its handbags, LVMH said it would not follow suit. Dior, the company’s second-biggest fashion brand after Louis Vuitton, also needs to continue to strengthen under new creative director Jonathan Anderson. Cabanis said Dior was now outperforming in many countries, with double-digit growth among Americans.

And as I have noted, clarity on who will succeed founder and Chief Executive Officer Bernard Arnault would be helpful.

That’s a matter for the long-term, though. For LVMH and the rest of the luxury houses, sales of bags and jewels over the crucial holiday period are what matters most.