Key insights
- J.P. Morgan has a positive outlook on Richemont due to strong jewelry brand momentum. The report suggests continued strength in U.S. discretionary spending, which could positively influence US-listed luxury retailers. However, uneven performance across the sector and geopolitical risks in the Middle East may limit the overall impact.
Investing.com -- Richemont has been placed on Positive Catalyst Watch ahead of its FY26 results on May 22, with expectations of “strong brand momentum” in jewellery and improved operational execution, J.P. Morgan said in a note dated Thursday.
The brokerage said the stock’s decline of 12% year-to-date presents “a particularly attractive point to revisit,” adding that upcoming results are likely to confirm double-digit growth at its jewellery maisons, estimated at 11% year-on-year.
Across the European luxury sector, first-quarter 2026 organic growth is expected at around 3% year-on-year, slowing from 5% in the fourth quarter, with retail sales projected at 6% and 3% including wholesale.
Performance is expected to remain uneven. Brands with exposure to jewellery and high-end ready-to-wear are seen outperforming, while fashion and leather goods segments at groups including LVMH and Kering are forecast to remain negative.
Among companies, Brunello Cucinelli is expected to post retail sales growth of 15%, while Zegna is seen at 11% in retail. At Moncler, the core Moncler brand is projected to grow retail sales by 9%, while Richemont is forecast to deliver 11% growth at its Jewellery Maisons segment.
By contrast, Hugo Boss is expected to report an 8% decline in sales, while Pandora is seen broadly flat, with like-for-like sales down 1.6%.
The report said “we expect Q1 to confirm a continuation of trends for most brands,” though added that geopolitical disruption in the Middle East is contributing to “further divergence of performance among luxury brands.”
Regional trends show continued strength in U.S. discretionary spending, stable demand in Europe and Asia, and disruptions in the Middle East affecting both local demand and travel flows.
Within categories, jewellery continues to show resilience, with Richemont and peers benefiting from category exposure and global demand. In contrast, leather goods face “bumpier” trends, with some brands still rebuilding product momentum.
Margins are expected to come under pressure at Richemont, with second-half FY26 EBIT margin seen down 110 basis points year-on-year, alongside declines at Pandora and Hugo Boss, while Burberry is forecast to see improvement.
The brokerage also highlighted ongoing shifts in creative direction across major fashion houses, with accelerating product launches potentially leading to “market share re-allocation” in a segment with limited volume growth.