European Luxury "Q2 Preview: Nearing an inflection point" Pusz

研报英文原文证据摘录

European Luxury "Q2 Preview: Nearing an inflection point" Pusz

, is likely to limit the scope for EPS upgrades for

now, until we get visibility on improvement continuing into Q3. On avg we make no

changes to our EPS estimates in 2026, but move them by +2% in 2027 mainly due to FX.

What to watch?

We expect investor focus to centre on: (1) exit rates into Q3 amid signs of improving

underlying momentum, (2) consumer nationality trends, particularly the behaviour of

the Chinese cohort following Chinese New Year amid concerns about a potential

slowdown, as well as US demand amid ongoing wealth-effect; (3) the impact of the

Middle East conflict and the pace of recovery given the de-escalation of conflict in the

region; (4) recent European tourism trends, which remain mixed, albeit also started to

improve (link); (5) category dynamics, notably soft vs. hard luxury. and (6) any signs of a

positive spillover from the AI-driven wealth effect across regions, especially Asia and the

US as first flagged in our report on South Korea in February (link).

Where are we positive/negative heading into Q2?

CFR (Buy) remains our highest-conviction idea, with stronger sales and easing margin

headwinds supporting a return of EPS upgrades. We also remain constructive on LVMH

(Buy), where stronger Q2 F&LG growth could reignite the debate around healthier

growth in H2. We also still like ESLX (Buy), where, with expectations reset, commentary

on smart glasses and the LT lens opportunity may matter more than the quarterly beat.

We remain on the sidelines on KER (Neutral), where improved Q2 results may not fully

address concerns around the FY26 outlook. For MONC (Neutral), results are unlikely to

settle the seasonality debate despite lower expectations. Finally, while RMS (Neutral)