Luxury Sector Outlook Shows Mixed Recovery as US Demand Grows and China Remains Uncertain

Analysts say the post‑pandemic luxury market is splitting into a K‑shaped recovery, with a shrinking pool of aspirational buyers and a need to focus on existing high‑net‑worth clients. Bernstein analyst Luca Solca noted that “selling more to existing consumers will require sustained relevance and a higher innovation tempo.”

Major groups such as LVMH, Kering, Hermès, Prada, Zegna and Brunello Cucinelli reported mixed results in the second quarter. Hermès continued to grow but its shares fell 11 % after the earnings release, while LVMH and Kering showed only modest stabilization. Analysts highlighted stronger momentum in the United States, where demand appears to be accelerating, contrasted with ongoing volatility in China, though real‑estate price stabilization may support a rebound.

Morningstar senior equity analyst Jelena Sokolova expressed cautious optimism, citing “the stabilization of real‑estate prices in China and accelerating creative momentum driven by new designer collections at brands such as Dior and Gucci.” The overall outlook remains uneven, with investors watching both regional performance and broader market conditions.