Live Markets: European luxury: what to expect from Q2 earnings
LIVE MARKETS-European luxury: what to expect from Q2 earnings Adds blog post
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EUROPEAN LUXURY: WHAT TO EXPECT FROM Q2 EARNINGS
Barclays and Deutsche Bank have published their thoughts on upcoming earnings for Europe's luxury sector .STXLUXP, and while both flag similar regional trends, there is a difference in tone between the two banks.
In short, both agree on the broad regional narrative. The Middle East is expected to be tough, domestic Chinese consumption will remain weak, while the U.S. and South Korea prove resilient.
But Barclays appears to strike a more optimistic tone.
"Looking at 2Q26, we expect our coverage to grow 4.7% on an organic basis ... and accelerating vs 1Q26 at 3.5%," Barclays says. That acceleration is likely to be driven by jewellery, U.S. and South Korea, they note.
Deutsche Bank is more cautious.
"2Q is unlikely to deliver significant sequential cFX growth improvement from 1Q with the Middle East still impacting numbers, lowest tourist flows and no material improvement in China," Deutsche Bank writes.
However, DB sees the industry backdrop improving in the second half of the year.
Both see jewellery as the best category, which means they like Richemont CFR.S, although they both caution that expectations are high.
Barclays notes that Richemont has "never been more expensive" over the last 10 years relative to peers.
Deutsche Bank's most preferred in the space is LVMH LVMH.PA, as it is still the preferred recovery story. Barclays also has LVMH rated as 'overweight'.
Both banks are also cautious on Kering PRTP.PA. DB rates Kering at 'hold' citing less confidence in Gucci's return to growth. Barclays forecasts -5% growth for Gucci, below consensus estimates.
(Samuel Indyk)
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