全球奢侈品：三重打击法则

Global Luxury Good: The Triple Whammy Rule We go back to our research on economics & valuation. We update top line, EBIT, TSR andROIC correlations. Luca Solca+41 582 723 126luca.solca@bernsteinsg.com Luxury stocks trade on top line growth surprises.This reflects the fundamental appealof the sector: sustained growth. Over the past 20 years, global luxury has delivered c. +8%CAGR, roughly 3x global GDP growth. Investors enter the sector for this growth premium,and valuation frameworks are anchored accordingly. As a result, deviations in top-linegrowth versus expectations remain the most important near-term driver of share priceperformance. Maria Meita+44 20 7170 0540maria.meita@bernsteinsg.com Eric Chen, CFA+852 2123 2628eric.chen@bernsteinsg.com This is because luxury is a fixed cost industry…Gross margins are structurally high at70-80%, as input costs are only a small portion of retail prices, and operating expenses arelargely fixed, concentrated in retail store leases, sales associates and communication costs.Scale is a significant competitive advantage: larger brands can spend a smaller portionof sales, while smaller brands compete for similar locations, customers, and talent. Thiscreates a virtuous cycle, where scale drives efficiency and competitive strength (Video -Global Luxury Goods: Charts of the Month – 11. The mega-brand Virtuous Cycle). Yi-Peng Khoo, CFA+44 20 7676 6822yi-peng.khoo@bernsteinsg.com Specialist Sales Alix Turner+44 20 7762 4044alix.turner@bernsteinsg.com ...faster top line growth produces operating leverage…As organic sales increase,absolute marketing communication rises, store productivity improves and fixed costs areabsorbed across a larger revenue base, driving EBIT margin expansion. In this way, top-linegrowth becomes the critical transmission mechanism through to profitability. The sector’searnings are therefore highly sensitive to revenue momentum. ...and that is when valuation multiples expand.YoY changes in sector EBIT marginbroadly correlate with changes in EV/sales multiples. The relationship holds particularlywell in luxury because items below EBIT, such as finance costs and taxes, tend to berelatively stable, allowing EBIT progression to translate cleanly into earnings.While thesector ultimately trades on P/E multiples, organic sales growth provides a practicalshorthand for forecasting earningsthrough its impact on margins and operatingleverage. ROIC correlates with top line growth too.Sector revenue growth shows a strongcorrelation with ROIC, which is intuitive given the underlying mechanics. Higher revenuesupports margin expansion while also improving invested capital turnover, enhancing bothcomponents of the ROIC equation. As a result, periods of stronger growth tend to coincidewith higher capital efficiency. And ROIC and TSR work hand in hand.Changes in ROIC, in turn, are a strong predictorof total shareholder returns over the medium term. This relationship holds consistently inboth upcycles and downcycles, as evidenced by longitudinal sector analysis (see GlobalLuxury Goods: ROIC normalization continues with self-help stories outperforming) as wellas broader cross-sector work (See Blackbook - Return on Invested Capital…A GlobalQuest). Improvements in ROIC typically drive valuation re-rating, which feeds directly intoTSR, reinforcing the importance of tracking returns alongside growth and margins. Continued on the next page… … continued from the first page Against this framework, the current sector setup appears attractive: Consensus expectations for FY26E place sector ROIC at around 15.0%, abovethe 10yr average of 14.6%...Our estimates are modestly higher at 15.9%, supportedby slightly stronger constant currency growth assumptions and marginally higher EBITmargins. This suggests that, fundamentally, the sector continues to deliver above-averagereturns despite recent macro uncertainties. ...but the sector trades at a -9% discount vs. 10yr average multiples.Global luxurysector de-rated significantly in 2026 so far, trading at 3.7x EV/ sales on NTM basis,representing an -18% de-rating from 2025 average. This leaves valuations at a -9%discount to the 10yr average, or a -5% discount when excluding the outlier year of2021. The combination of resilient ROIC and compressed multiples highlights a growingdisconnect between fundamentals and valuation. The primary reason for this disconnect are doubts on whether luxury growth willcontinue to sustain similarly to the past. Sector growth has slowed on the back of theChinese real estate crisis and subsequent consumer confidence collapse. The debate iswhether this is transient or structural. We will go back to this. Suffice to say in this contextthat whenever the sector slowed in the past 30 years, investors have typically wondered ifthis was the end of luxury. So far, it never was. BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS The trajectory of a recovery in global luxury demand remains uncertain. We find tw