奢侈品：缓步前行

We mark to market for slower 2026, but FX better EquityEuropeLuxury Goods In our year ahead reporthold your horseswe flagged sector upside was limited byvaluation (28x, 24% above history) and earnings downside. Today the sector trades on 21xP/E (close to the bottom of its 20-25x historical range), and earnings have been somewhatre-based. We had flagged 1Q26 would be theMane event(see report), so far we seeimproving China, Korea & US, but weakness in Europe, Japan travel and the Middle East.We adjust our earnings forecasts to reflect lower organic growth in 1Q26 / 2026, but lesssever FX headwinds (on recent US$ appreciation), see changes to estimate table inExhibit6. As a result, we adjust POs for LVMH, Hermes, Kering, Ferragamo and Richemont, seeExhibit 2. We upgrade Richemont to Buy, from Neutral, with a PO of CHF 175 (28% upsidepotential). The scarcity of its revenue growth is not reflected in current P/E rel, whilstexternal headwinds on GM are now modelled by consensus. Ashley Wallace>>Research AnalystMerrill Lynch (Australia)+61 2 9226 5070ashley.d.wallace@bofa.com Daria Nasledysheva>>Research AnalystMLI (UK)+44 20 7996 1087daria.nasledysheva@bofa.com Ioanna Ziarti>>Research AnalystMLI (UK)+44 20 7996 8116ioanna.ziarti@bofa.com US soft luxury +10% YoY in 1QTD, jewellery +11%BAC aggregated debit and credit card data shows soft luxury spend was the strongest consumer discretionary category inFebruary, growing +11% YoY, and +14% in theMarch MTD, bringing 1QTD to +10% (9ppt up from 4Q, seeExhibit 67). Jewellery at+11% in 1QTD has accelerated by 5ppt from 4Q. While the high-income cohort remainsthe strongest, the improvement in 1QTD was supported by 6-12ppt acceleration inspend from the low-income for jewellery & soft lux. March has a tougher comp, butshould the 2yr CAGR hold, 1Q26 should be +8% for luxury fashion & +11% for jewellery. Thierry Cota>>Research AnalystBofASE (France) Joffrey Bellicha Meller>>ResearchAnalystMLI (UK) Giulia D'Ambrosio>>Research AnalystMLI (UK) SolidChinese New Year (as expected); Korea & HK strong Our China channel checks suggest demandhas progressively improved so far in 1Q26 vs4Q25. Whist Feb is very strong its CNY timing related. Jan-Feb jewellery sales were+13% YoY (Exhibit 19). China NPC set a new 2026 GDP target of 4.5-5.0% (from 5% lastyear) with consumption boosted by continued subsidies and a new coordination fund.Chinese consumer confidence edged slightly higher (Exhibit 17). We forecast Chineseluxury spend +5% in 2026. Elsewhere in Asia, Macau GGR is +14% QTD, luxury spend inKorea & HK jewellery sales are both +31% (from +19% and +9% respectively in 4Q25). SeeBofA on USAreport formethodology, limitations, anddisclaimers related to BAC aggregatedcredit and debit card data Tourisma growing dragPlanet VATrefunds were -25% in Feb and -20% in 1Q26, which is 12ppt softer vs 4Q (Exhibit 82), with spend from all nationalities negative. Japan duty free sales are -5% in1QTD (see Exhibit 27), from +3% in 4Q; albeit 1-15 Mar was +16% on an easier comp. Quantifying the potential Middle EastimpactThe Middle East is 6% of sector revenues, seeImplications of Middle East escalation. Our forecasts now include March revenues in the region -50%, and 2Q25 -20%. On anabsolute basis this would be a 1% impact on sector revenue growth for 2Q, howevergiven the region was growing 17% in 2025 the sequential impact is likely 2%. Contents Luxury share prices -23% YTD49 Luxury sector P/E at the low end of its valuation range49Luxury share prices are down -23% in 2026YTD; EPS -3%51 Detail on US luxury demand53 Brand Leading Indicator–February 202662 Ratings & PO changes We make some changes to our forecasts, and mark-to-market FX. We slightlylower our sector organic revenue growth estimate for 2026-27E but upgradeestimates on less sever FX headwind. At EBIT & EPS level we change ourestimates by <1%. In conjunction with this report we upgrade Richemont toBuy, with a PO of CHF 175, implying 28% upside potential. We also changePOs of LVMH, Hermes, Kering and Ferragamo. BofA Luxury Good Comp Table Below we show our ratings, PO and valuation multiples at the current share price. Exhibit1: Luxury Goods comp tableBofA Comp table: Recommendations, PO and valuation multiples at current share price Richemont upgrade to Buy Richemont share price is down 20% in 2026 YTD. It now trades on 22x FY27, or 20x excash. The company continues to deliver revenue growth well above sector peers.Considering the slower than expected recovery in soft luxury we think that the growthstory of Richemont becomes more unique. Whilst external factors are a headwind onFY26 & FY27 gross margins this now looks more reflected in consensus expectations(FY28 consensus GM -220bps and FY27 -20bps). We adjust our model to reflect MiddleEast disruption, and mark to market for gold and FX. Our PO of CHF 175 (is down fromCHF 190) to reflect updated earnings assumptions, FX and LuxExperience market cap. Atour PO, Rich