Europe Luxury Doesn’t Show Signs of Improvement: Deutsche Bank
2014-08-22 07:47:01.891 GMT
By Heather Burke
Aug. 22 (Bloomberg) -- European luxury cos. have reported
disappointing 2Q earnings, Deutsche Bank says in note; cuts EPS
ests. by avg. 3%
* Sector still hurt by weak consumer backdrop, especially in
Asia, where brands are investing and/or repositioning
* Sales growth pressure may continue, even as negative FX
slows, doesn’t see much basis for S-T optimism, suggests
“still uninspiring” 3Q
* Wholesale may be one area of improvement in S-T, benefiting
cos. like Hugo Boss
* Hugo Boss raised to buy; disproportionate exposure to
wholesale leaves 2H results more ensured than for rest of
luxury cos. more geared to retail; has strong FCF generation
* Luxottica reiterated buy, exposed to stronger U.S. consumer,
USD, is a leader in attractive industry
* Prada cut to hold, EPS growth may be pressured into 2015,
worsening retail growth in China, Hong Kong may hurt margins
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To contact the reporter on this story:
Heather Burke in London at +44-20-7673-2044 or
hburke2@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
2014-08-22 07:47:01.891 GMT
By Heather Burke
Aug. 22 (Bloomberg) -- European luxury cos. have reported
disappointing 2Q earnings, Deutsche Bank says in note; cuts EPS
ests. by avg. 3%
* Sector still hurt by weak consumer backdrop, especially in
Asia, where brands are investing and/or repositioning
* Sales growth pressure may continue, even as negative FX
slows, doesn’t see much basis for S-T optimism, suggests
“still uninspiring” 3Q
* Wholesale may be one area of improvement in S-T, benefiting
cos. like Hugo Boss
* Hugo Boss raised to buy; disproportionate exposure to
wholesale leaves 2H results more ensured than for rest of
luxury cos. more geared to retail; has strong FCF generation
* Luxottica reiterated buy, exposed to stronger U.S. consumer,
USD, is a leader in attractive industry
* Prada cut to hold, EPS growth may be pressured into 2015,
worsening retail growth in China, Hong Kong may hurt margins
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Heather Burke in London at +44-20-7673-2044 or
hburke2@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net