Investing.com - US luxury brand spending declined 6% year-over-year in September, marking the steepest drop of the third quarter and the first negative quarter of 2026, according to credit card data from Citi released Wednesday. Spending had fallen 4% in both July and August, resulting in a 5% decline for the third quarter after gains of 5% and 3% in the first and second quarters.

The deterioration coincided with continued geopolitical uncertainty and a tougher year-over-year comparison by roughly one percentage point. The two-year stacked spend trend weakened to negative 6% from negative 5% in August. Leather goods and ready-to-wear categories improved sequentially, while jewelry and watches declined sharply, partly reflecting the anniversary of tariff-related demand pull-forward.

Average transaction values turned low-single-digit negative in September, while transacting-customer growth improved to negative 5% year-over-year. Consumer confidence weakened during the month, with both Conference Board and University of Michigan surveys pointing to softer business and labor-market conditions and persistent inflation concerns.

Citi said recent spending data and industry commentary suggest a potential normalization in US luxury demand heading into the upcoming reporting season. The firm noted that higher-end consumers should remain relatively resilient, supported primarily by equity-market wealth effects.

The data represents a selected subset of Citi's credit card transactions from a panel of more than 10 million US cardholders. Tapestry, Capri Holdings, Watches of Switzerland, Birkenstock, and EssilorLuxottica are among the most US-exposed luxury companies, while Moncler, Prada Group, Swatch Group, Hermes, and Burberry are the least exposed.