Richemont has been singled out as the most attractive near-term opportunity in European luxury goods, with its shares placed on positive catalyst watch ahead of full-year results on 22 May, as the sector braces for a first quarter reporting season that is expected to expose a growing gap between winners and losers.
Despite a 6% sector rally on the back of the US-Iran ceasefire announcement, luxury stocks remain down an average of 10% year to date, with Richemont's 12% decline seen as a particularly compelling entry point given the strength of its jewellery brands and improving operational execution.
The broader first-quarter picture is expected to show continuity with recent trends, with comments from Ferragamo, Brunello Cucinelli and Zegna in March all pointing to trading in line with or slightly ahead of the final quarter of 2025.
However, the conflict in the Middle East, a fast-growing region for the sector, is expected to deepen the divide between luxury's haves and have-nots.
Jewellery and high-end ready-to-wear brands with genuinely global momentum are expected to hold up well, while leather goods remain the more troubled corner of the market.
Dior and Gucci are still working through product renewal cycles, while Louis Vuitton and Hermes are seen as facing structural growth constraints at their current scale, particularly as Chanel begins to regain competitive traction.
Brunello Cucinelli, which reports first-quarter results after market close today, is expected to post the strongest direct-to-consumer sales growth in the sector despite suffering one of the largest year-to-date share price falls at 18%, a disconnect that reflects the polarised and sentiment-driven conditions currently gripping the luxury industry.