Luxury Industry's Outlook Seems Too Upbeat

Dow Jones09-22 13:54

0549 GMT - Luxury industry's outlook seems too optimistic given the current market environment, RBC Capital Markets analyst Piral Dadhania says. The analyst has a prudent sector view for the remainder of this year and for 2027. This is mainly due to weakened demand on the back of mixed economic indicators in China, as well as a potential moderation in the key U.S. market, Dadhania says. "Consensus mid-term estimates are too optimistic assuming accelerating revenue growth expectations and margin expansion which in our view is not justified based on current momentum," the analyst adds. The creative reshuffle that some brands implemented in order to attract shoppers is unlikely to deliver the expected push to revenue growth given a tough economic backdrop, Dadhania says.

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