US Luxury Spending Drops 6% in September, Marking First Quarterly Fall

U.S. luxury brand spending fell 6% year-over-year in September, capping a third quarter that saw an overall 5% decline. This marks the first negative quarter for the sector in 2026. It follows growth of 5% and 3% in the first and second quarters.

According to a report from Citi, the September downturn followed monthly declines of 4% in July and August. The data, derived from credit card transactions across a panel of more than 10 million U.S. cardholders, shows a cooling trend in discretionary high-end purchases.

Sector Exposure Profiles

The impact of this spending contraction varies depending on a company's geographic revenue concentration. Citi analysts categorized major luxury players based on their exposure to the U.S. market:

• High Exposure: Tapestry, Capri Holdings, Watches of Switzerland, Birkenstock, and EssilorLuxottica.
• Low Exposure: Moncler, Prada Group, Swatch Group, Hermes, and Burberry.

Companies with higher exposure to the U.S. consumer base are more vulnerable to current volatility in discretionary spending. The decline in transaction volume directly hits their primary revenue streams.

Understanding the Quarterly Shift

The luxury sector's performance serves as an indicator for broader consumer confidence. After starting the year with 5% growth in Q1 and 3% in Q2, the reversal in Q3 suggests that inflationary pressures or shifting economic expectations are influencing high-net-worth and aspirational shoppers.

For investors, the distinction between high-exposure and low-exposure firms is critical. Companies with limited U.S. reliance may mitigate the impact of this regional downturn. Those heavily dependent on the American market face a challenge in maintaining year-over-year growth targets as the year concludes.