The FSW Markets All Luxury Index is up over 14 percent this year. This compares with a nearly 10 percent decline in 2024. Fifteen of the index’s eighteen constituents are up, led by Richemont (up around 25 percent YTD) after their strong Q3 report, Burberry (up around 18 percent) after a better-than-feared full-year 2024 report and enthusiasm for its new strategic direction. Industry giant LVMH, which comprises around a third of luxury fashion revenues, is up over 17 percent as investors hope that the doom and gloom surrounding the industry last year has begun to lift as hopes that American consumers will help fill the void left by China’s luxury shoppers.
Part of the story on the equity side is a generally strong Europe so far this year. The Euro Stoxx 50 is up over 6 percent, while the Paris CAC-40 is up closer to 8 percent. It is well worth noting that luxury is a big constituent of European exchanges, kicking in about a third of the CAC’s value.
After Paris closes on Tuesday we will get a major industry barometer for holiday sales success as LVMH will report its full-year earnings. Analysts have set cautious expectations for LVMH’s upcoming full-year and fourth-quarter 2024 financial results. The consensus anticipates a 1% decline in fourth-quarter sales, with the pivotal fashion and leather goods division projected to experience a 3% decrease. This follows on from a weaker-than-expected Q3 where a 3 percent sales drop disappointed investors who, on the median, predicted a 1 percent increase.
The FSW Markets industry forecast is still for a 5 percent industry contraction in full-year 2024, followed by a 1.7 percent gain in full-year 2025 with a weak H1 2025.
You can find the Fashion Strategy Weekly 2025 year-in-preview here: https://www.fashionstrategyweekly.com/p/fsw-luxury-playbook-for-2025-welcome