Sales growth divergence to continue into 2Q
CS expect the divergence in terms of sales growth in soft luxury to have continued through 2Q with the mega brands of LVMH and Kering gaining shares over the mono-brand companies. We believe a sales growth deceleration is widely anticipated by the market but high valuation multiples relative to European equities seem to suggest that earnings upgrades are needed for most stocks to perform on results. We like Kering (N) and LVMH (O/P) into results.