Analysts shared a blue-sky view on the sector, especially for the biggest players.
“We’ve seen very strong results in the luxury industry given the wealth effect, and given that consumers still have healthy amounts of savings, as well as low unemployment and consumer confidence,” said Oliver Chen, managing director and senior equity research analyst at Cowen & Co. “We’re looking for low double-digit sales growth in 2022. Comparisons are tougher in the first half, so it could be a little bit weaker than the second half, based on the algebra.
Luca Solca, senior research analyst in luxury goods at Bernstein, stressed that “Chinese demand doesn’t seem to be going for a ‘step-down’ reset similar to the anti-corruption drive of 2021, as feared by the market in mid-August.”“The next two years could see a lot of impressive growth stories unfolding in the U.S.,” said Rambourg, who earlier this year penned a report explaining why America is an emerging market for luxury.
But “spending on experiences versus spending on goods: it’s actually not an either/or. As LVMH mentioned on a call, when you start going out again, you’ll also want to look good. And at least since the U.S. has reopened, there has been no evidence of luxury sales taking a hit despite it being virtually impossible to book a restaurant or even a bar,” HSBC’s Rambourg said.
Rambourg forecast a lot of noise around the jewelry category as Tiffany & Co., now controlled by a “management dream team” under LVMH Moët Hennessy Louis Vuitton, unfurls its new strategy. Meanwhile, segment leader Cartier “continues to impress.”
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