The Big Picture: Luxury companies haven’t given bulls much to cheer about of late, with the industry continuing to struggle through a two-year decline that has dragged down revenue and profit at many fashion houses. Now, there appears to be a flicker of light at the end of the runway.

First came the buzz and excitement of multiple high-profile debuts during the recent shows — including Jonathan Anderson at Dior and Matthieu Blazy at Chanel — and then last week LVMH gave some hints that the industry might be on the mend.

LVMH, an industry benchmark both for its size and the breadth of brands in its portfolio, said third-quarter revenue at its critical fashion and leather goods business fell 2 percent, less than analysts had forecast and better than the 5 percent and 9 percent drops in this year’s first and second quarters respectively. LVMH’s overall revenue rose 1 percent.

Up Next: On Wednesday, Kering will look to surprise on the upside and build on LVMH’s momentum when it reports third-quarter results. Analysts are expecting a 10 percent decline in Kering’s revenue as Gucci, the group’s largest brand, continues its tailspin. Gucci is expected to post a drop of 16 percent in revenue compared with the previous quarter. A smaller decline could give the industry much-needed support as the holiday shopping season arrives.

The enthusiasm about the arrival last month of new Kering chief executive Luca de Meo, a turnaround expert who helped revive several car brands, has given a jolt to the French company’s stock price. It will take some time before it’s clear whether he can right the ship.

Brighter Spots: Hermès also reports on Wednesday, with a sales jump of about 10 percent expected.

Thursday will be the turn of the Italians, with Prada, Zegna and Ferragamo all reporting. The first two are expected to show growth in the third quarter while Ferragamo is forecast to have booked another decline.

China, which continues to slog through a period of economic malaise characterised by high unemployment and a depressed real estate market, will be in focus this week after LVMH chief financial officer Cécile Cabanis told analysts that China is “close to stabilisation.” She tempered expectations though by adding that “it is still going to take time until we have a rebound in China.”

Aspirational Troubles: In large part because of China’s economic challenges, UBS isn’t expecting the luxury industry’s earnings to hit bottom until the second half of next year.

As the industry waits for year-end profit and loss figures, which won’t be released until early next year, analysts will parse every word management makes on calls to discuss the revenue numbers. One key topic will be the continued evolution of the aspirational luxury consumer.

During the current downturn, the industry has seen the wealthiest customers continue to spend while aspirational consumers pull back as prices rise across the economy. Aspirational consumers, who are more attentive to price changes, account for about 60 percent of luxury spending, according to Berenberg estimates.

“This divergence [between wealthy and aspirational consumers] will persist potentially into the medium term, driven by structural not cyclical factors — and this matters, as aspirational consumers remain key to the total spend on luxury goods,” Berenberg wrote in a note downgrading LVMH last week.

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