Luxury Goods: Stealth wealth

Research evidence excerpt

Luxury Goods: Stealth wealth

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Luxury Goods

Stealth wealth

Industry Overview

Revenue growth continues to progressively recover 25 June 2026

Luxury revenue growth continues to improve in 2Q26. Acceleration in demand will be Equity

mostly visible in markets backed by strong wealth creation like the US, Korea and to Europe

some extent HK. In addition, Europe and Japan have seen less bad tourism trends. The Luxury Goods

Middle East is recovering month after month, but still likely a 2ppt drag on sector Ashley Wallace >>

revenues for 2Q (from 1ppt in 1Q). China remains challenging, with softer traffic in 2Q Research Analyst

as demand shifts to close-proximity countries given attractive prices. Whilst many stock Merrill+61 2 9226Lynch5070(Australia)

prices still look depressed, valuation is not. The luxury sector now trades on 25x P/E, the ashley.d.wallace@bofa.com

upper end of its 20-25x trading range. The notable exceptions are LVMH (on 22x P/E) Daria Nasledysheva >>

Research Analyst

and Hermes (34x, but c25% below history & lowest premium to peers since 2001). MLI (UK)

Consensus models faster 2H revenue growth than 2Q, and 2027 faster again. In our view +44 20 7996 1087

daria.nasledysheva@bofa.com

the sector needs improved trends in China to make that possible, of which visibility is

Ioanna Ziarti >>

still low. Hence, we still see luxury as a trading rather than buy and hold sector for now. Research Analyst

MLI (UK)

Wealth effect boosts luxury spending +44ioanna.ziarti@bofa.com20 7996 8116

The regions seeing the most pronounced acceleration in luxury spend are those Thierry Cota >>

supported by the wealth effects that stem from a (AI linked) booming equity market. US Research Analyst BofASE (France)