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Kering faced a 14% revenue drop in Q1 2025, primarily due to Gucci's 24% decline, prompting a leadership change. The ongoing US-China trade war exacerbates challenges for luxury brands, leading to increased costs and a projected 2% industry contraction by 2025. Italian brands like Prada and Ferragamo are particularly affected, necessitating strategic shifts towards localized production and new markets to navigate the turbulent landscape.
Analysts from Bernstein and UBS report that the impact of U.S. tariffs under President Trump on publicly traded luxury companies is expected to be minimal. The findings suggest that the luxury sector may remain resilient despite ongoing trade tensions.
UBS has maintained a "Neutral" rating on Kering, noting that European luxury goods manufacturers are likely to pass on new US tariff costs to consumers through price increases. Analyst Zuzanna Pusz warns that the risk from declining consumer sentiment is significant, with customs duties potentially reducing operating results by an average of 7%. Kering, along with Moncler, Hermes, Prada, LVMH, and Richemont, is expected to face the least impact, while Salvatore Ferragamo, Swatch, and Burberry may be more affected.
UBS has maintained a "Buy" rating on Richemont, noting that European luxury goods manufacturers are likely to pass on new US tariff costs to consumers through price increases. Analyst Zuzanna Pusz highlights that the risk from declining consumer sentiment is more significant, with customs duties potentially reducing operating results by an average of 7%. The impact is expected to be lowest for brands like Richemont, LVMH, and Hermes, while Salvatore Ferragamo, Swatch, and Burberry face the highest risks.
UBS maintains an 'Underweight' rating on Salvatore Ferragamo, setting a price target of 5.6 euros ahead of the luxury brand's 2024 results due on January 30. The broker anticipates a -6.6% decline in sales for Q4 2024, following a -7.4% drop in Q3, with full-year sales projected at 1.029 billion euros and recurring EBIT at 30 million euros.
UBS maintains an 'underweight' rating on Salvatore Ferragamo, setting a price target of 5.6 euros ahead of the company's 2024 earnings release on January 30. The broker anticipates a -6.6% decline in sales for Q4 2024, following a -7.4% drop in Q3, with full-year sales projected at 1.029 billion euros and recurring EBIT at 30 million euros.
UBS has maintained its 'underweight' rating on Salvatore Ferragamo, setting a price target of 5.6 euros ahead of the luxury brand's 2024 results due on January 30. The firm anticipates a 6.6% decline in sales for Q4 2024, following a 7.4% drop in Q3, with Barclays projecting full-year sales of 1.029 billion euros and a recurring EBIT of 30 million euros.
UBS has upgraded its recommendation on Salvatore Ferragamo from 'sell' to 'neutral', maintaining a target price of six euros, reflecting an 8% potential upside. Despite concerns about the company's fundamentals, UBS notes that the shares are currently fairly valued after a significant 55% decline this year.
UBS has upgraded its recommendation on Salvatore Ferragamo from 'sell' to 'neutral', maintaining a target price of six euros, reflecting an 8% potential upside. Despite concerns about the company's fundamentals, UBS notes that the shares are currently valued at an all-time low following a 55% decline this year.
Salvatore Ferragamo's shares rose following a trading update, with the company maintaining its operating profit forecast despite challenges in the luxury sector. UBS upgraded its rating to "neutral" from "sell," citing a significant decline in share value and a price target of €6.00 per share, while forecasting modest growth in organic sales for 2025, driven mainly by North America. Potential impairments of €70 million to €90 million are anticipated, but these will not impact immediate cash flows or the overall asset base.
Salvatore Ferragamo S.p.A.
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The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
luxury brands face challenges amid trade war and shifting consumer preferences
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