Bloomberg ties LVMH's China weakness to a Louis Vuitton suit against Molly Tea

The division split carries more information than the group headline. Fashion and leather missed consensus by 3.2 points ^[13] and the group missed by 0.3 ^[14]. The division generates nearly half of revenue ^[4], so a 3.2-point miss at a 50% weight would have cost the group about 1.6 points on its own ^[15]. Because the group came in only 0.3 short, the other divisions must have beaten expectations by roughly 2.1 to 2.6 points, taking "nearly half" as 45% to 50% of revenue and treating the published percentages as rounded ^[16].

The slowdown was already in the forecast. Analysts expected fashion and leather to fall 1.8% ^[3], and the Channel NewsAsia report describes a $350 billion luxury sector mired in a three-year slowdown ^[6]. A decline the consensus carried is not news; the 3.2 points beyond it are. If the Molly Tea backlash accounts for any of them, it did so through Louis Vuitton's sales in China, which Bloomberg says suffered after the company won its case ^[17].

We think the suit explains some of those 3.2 points and cannot say how much. The competing reading, that fashion demand weakened further than analysts had modeled, fits the same numbers. Gucci supplies a peer for the 5% figure: its revenue fell 5% on a comparable basis in the first half of 2026, PYMNTS reported on Sept. 17 ^[10], and Kering's fashion and leather unit, which includes Gucci, fell 1% comparably over the half ^[11]. Those are half-year figures on a comparable basis, so the match with LVMH's quarterly organic number is loose.

We would be wrong about the weighting if a breakdown by region shows fashion and leather falling far more in the region including China ^[7] than in LVMH's other regions. If the pattern is similar everywhere, the backlash explains little of the miss.