US luxury spending slows ahead of midterms, credit card data shows
XLY•US luxury credit card purchases fell 6% year over year in September, their third consecutive monthly decline, after falling 4% in July and August, Citi said. Spending on leather goods and ready-to-wear improved sequentially, while watches and luxury jewelry weakened further.
1. September spending declines
Citi said US luxury credit card purchases fell 6% from a year earlier in September, following 4% declines in July and August. The data, based on millions of credit card transactions, showed leather goods and ready-to-wear improved from the prior month, while watches and luxury jewelry deteriorated further.
2. Brands face weaker demand
Citi identified Tapestry, LVMH and Ferragamo among luxury brands most exposed to the US market. It said brands with greater exposure to higher-end consumers should remain relatively resilient, supported by equity-market wealth effects. The article says luxury groups may flag weaker US demand in the upcoming earnings season, which begins October 12 with LVMH's third-quarter sales report.
