Flattered by favorable comparisons bases and supported by qualified sales of satisfactory during the crucial Christmas period, the first publications of the luxury sector will require analysts to revise their forecasts for the giants of French industry.
The Swiss Richemont, the world of luxury, which owns Cartier, Van Cleef & Arpels and Montblanc and Swatch, the watchmaker holding marks Blancpain and Longines, as Britain’s Burberry, all have taken the markets by surprise this week by announcing sales significantly exceeded expectations for the last three months of the year.
“Obviously, logic dictates that the estimates for the numbers coming are revised upwards,” said one analyst who wished to remain anonymous, and that “the level of expectation rises mechanically. “There will certainly be adjustments,” said another analyst.
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Also, LVMH, the world industry, and Hermes will they more difficult to detect when they are published on 4 and 5 February.
Owner of Gucci, PPR, which will sell its flagship consumer distribution in favor of a focus on fashion brands in the luxury as the general public, publish it on its results February 18. Favorable comparisons with the 4th quarter 2009, sales of Christmas seem to have held too low and estimates of analysts can explain the discrepancy between market expectations and the figures published this week.
Restocking :
After their collapse a year ago thanks to the powerful engine of China, the sales season, crucial for the sector were “apparently rather held without being extravagant,” said an analyst.
They have also benefited, for the players’ hard luxury “that are jewelers and watchmakers – the most affected by the wholesalers destocking, restocking of phenomena induced by extreme caution in purchases.
“Christmas was quite correct in Europe and the United States and the emerging dynamics remains very strong,” noted another analysis bureau.
He adds, explaining the gap between expectations and actual published figures, that analysts ‘sell side’ had “perhaps been too conservative and too slow to revise their estimates.
This difference may also come from excessive caution luxury groups in their financial reporting, who preferred to “make a good surprise” the market out of a particularly tough for the industry.
LVMH and PPR were among the highest increases of ACC in 2009 with gains of over 64% and 80% respectively, driven by expectations of a resumption of the luxury market.
Hermes, whose many valuations are almost two times the industry average, has instead ended the year 2009 on an increase limited to 3.7%. In the opinion of Bain & Co, the world market is expected to rebound in 2010 still shy (1% through Chinese search engine) before taking up more than in 2011 (+4.2%).
Tags: Britain's Burberry, Forecast, French luxury, Gucci, Hermès, PPR, Van Cleef & Arpels