JPM sees European luxury sector staying soft in Q2

Prada SpA

12/07/2024 09:36

** J.P.Morgan expects Q2/H1 results to confirm relatively
soft trends for the European luxury sector, broadly in line with
Q1
    ** Broker sees muted growth, margins under pressure for most
players except for Italian luxury puffer jacket maker Moncler
 MONC.MI  thanks to its different timings of marketing, and
luxury group Prada  1913.HK 
    ** Sees material downside risk at Swiss watchmaker Swatch
 UHR.S , German fashion house Hugo Boss  BOSSn.DE , and to a
lesser extent LVMH  LVMH.PA , Burberry  BRBY.L  and Kering
 PRTP.PA 
    ** Shares in Swatch are up 1% but down 18% so far this year,
Hugo Boss is up 2% and down 39% YTD, while LVMH and Kering are
both up around 2% and down 1.4% and 15% YTD, respectively;
Burberry is up around 1% and down 38% YTD
    ** Prada is likely to be a "real standout" on margins this
reporting season, JPM says, adding it's the only name it
continues to see material upside to consensus going into H2
    ** H2 earnings revision are still skewed to the downside,
JPM says, pointing to slower pace of re-acceleration than
current consensus expectations
    ** "We think the comments on exit rates will likely be a
very important focus given the easing comp base from June and
the need for signals of re-acceleration to underpin the current
H2 expectations" - JPM    

 (Reporting by Anna Pruchnicka)
 ((anna.pruchnicka@tr.com))