reports
- Loic Morvan
Time not yet right to revisit The Swatch Group!
Yesterday, the Swiss group released dismal 2024 results with sales down 12% and EBIT declining 74%, implying EBIT margin of just 4.5%. We expect 2025 sales to gain close to 5% with an EBIT margin at 7.4% (still way below the 2023 level of 15%). We maintain our Neutral recommendation with a CHF180PT
- Cedric Rossi
- Loic Morvan
- Paul Rouviere
Luxury Goods: beware of excessive optimism on China in the near term
Although most stocks in our luxury sample rebounded last week following the launch of a stimulus "bazooka" by the Chinese authorities, we expect no material improvement in China's consumption or household confidence in the near term. As such, we would not be surprised if the Chinese government were
- Cedric Rossi
- Loic Morvan
- Paul Rouviere
Luxury Goods: only a very slight rebound expected in H2
As expected, H1 was a poor vintage for Luxury groups. On average, our luxury groups sample achieved 1% organic sales growth, in line with Q1. Only Hermès, Moncler and Brunello Cucinelli enjoyed double-digit growth. Consequently, H1 profitability came under pressure. H2 is not expected to be much be
- Loic Morvan
Swatch Group: another disappointment
The Swatch Group reported H1 results far below consensus both at top line and even more so at EBIT level, which led to a 10% share price decline yesterday. We have cut our FY 24 & 25 earnings by 20%. Neutral recommendation reiterated with a new CHF245 PT vs CHF290.
- Cedric Rossi
- Loic Morvan
- Paul Rouviere
Luxury Goods: H1 profitability under pressure
We turn more cautious on the sector as recent newsflows points to a deterioration of China's macro. H1 should prove to be challenging for the sector with Q2 growth expected to decelerate sequentially from +1% FX-n in Q2 to zero in Q2. With lower topline growth, Luxury groups will be under pressure
- Loic Morvan
Swatch Group: Accumulating headwinds could lead to earnings downgrade
We downgrade our recommendation on The Swatch Group as we think FY24e will prove more complicated than currently priced in by the consensus. We cut our 2024-25 earnings by 12% as we expect FY 24 sales stability versus +5% expected previously and new profitability erosion, -80bp to 14.3% vs. +40bp b
- Cedric Rossi
- Clement Genelot
- Loic Morvan
- Paul Rouviere
- Philippine Adam
On the shelves now: Consumer Weekly #25
In this Consumer Weekly newsletter, we provide a brief overview of the key factors affecting our Consumer coverage, from Luxury & Consumer goods to Retail & E-commerce and Food & Ingredients. This week, we comment on resilient US activity from the perspective of a healthy Logistics Mana
- Loic Morvan
- Paul Rouviere
Luxury Goods: normalising demand to limit upside in H2
Where do we stand after H1?Since the start of the year, we have been positive on the European Luxury Goods sector on expectations that China's reopening would bolster Luxury Goods sales throughout 2023. Q2 sales grew 17% on average. As expected, Hermès (+27%), Moncler (+26%) and Tod's Group (+24%)
- Loic Morvan
- Paul Rouviere
Luxury Goods: VICs keep splashing out
Despite questions raised by investors on China's reopening, and US market normalization, we still expect strong growth in Q2 2023e (+15% y/y FX-n) for our Luxury goods coverage. Beyond Q2, we remain strongly convinced by the growth potential of the China luxury market especially for the most exclus
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