After luxury brands reported a generally poorer than expected H1 and gloomy forward guidance (with some notable exceptions), we are gearing up for the start of Q3 earnings releases next week. The newly re-branded FSW Markets will be previewing market expectations over the next few days.
As a preview of coming attractions, this is the release schedule as it now stands for the month of October:
- October 15 – LVMH & Swatch Group
- October 18 – EssilorLuxottica & Brunello Cucinelli
- October 23 – Kering
- October 24 – Hermès
- October 31 – Prada
Stock valuations for luxury have generally been pretty weak this year, in step with previously reported earnings and discounted future earnings. The FSW Markets All Luxury Index is down about 1.5 percent while the S&P 500 is up over 20 percent.
As the chart below shows, there are some exceptions with Ferrari, Ralph Lauren, Prada Group, and Capri Holdings Limited suitor Tapestry outperforming the S&P while Richemont, EssilorLuxottica, Hermès, and Brunello Cucinelli posting positive year-to-date returns.
Brands struggling with both creative and corporate strategy, particularly Kering and Burberry, are faring the worst and find their share prices down over 35 and 50 percent, respectively.