Luxury Consumer Tapped, Muted Sector Growth Seen Continuing -- Market Talk

Dow Jones09-23

1052 ET - The luxury consumer is tapped and muted sector growth will now likely continue into the second half of the year and 2025, leading to margin pressure and no EBIT growth, say analysts at BofA Securities in a research note. The recent deterioration has been in the Chinese consumer, which was the only drive of revenue growth in 1H24, they add. The analysts see a number of key themes for 2H24 through 2025 including the luxury industry needing to pivot back to creativity, fashion content and newness to drive higher engagement as it did in 2016. They downgrade ratings on four companies -- French luxury giant LVMH, Kering, Ermenegildo Zegna and Hugo Boss -- to reflect a more challenging backdrop in 2024-25 and earnings risk. (denny.jacob@wsj.com; @pennedbyden)

(END) Dow Jones Newswires

September 23, 2024 10:52 ET (14:52 GMT)

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The analysts see a number of key themes for 2H24 through 2025 including the luxury industry needing to pivot back to creativity, fashion content and newness to drive higher engagement as it did in 2016. They downgrade ratings on four companies -- French luxury giant LVMH, Kering, Ermenegildo Zegna and Hugo Boss -- to reflect a more challenging backdrop in 2024-25 and earnings risk. 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