Bank of America Says Luxury Retailers' Revenue Growth Has Peaked

By
Bill McColl
Bill McColl
Full Bio

Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

Learn about our editorial policies
Published September 25, 2023
Woman looking at high-heeled dress sandals in a store

filadendron / Getty Images

Key Takeaways

  • Bank of America analysts said the boom in sales growth for luxury retailers as the impacts of the COVID-19 pandemic waned has peaked.
  • Analysts for Bank of America said luxury-goods spending in the U.S. reached a high in the first quarter of 2022 and in Europe in the first quarter of this year.
  • Bank of America suggested the luxury-goods stocks that could show the most upside are those with customers who are more affluent and have historically shown more resilience.

Bank of America warned that the boom in revenue growth for luxury-goods retailers as pandemic restrictions eased is over, and while that might provide an opportunity for investors, they might need to be choosy.

Analysts at the bank said demand for luxury goods peaked in the U.S. in the first quarter of 2022, and in Europe in the first quarter of this year.

They noted that luxury-company stocks are down 17% from their all-time highs in April as third-quarter demand normalized, especially in August. The Bank of America analysts added that they see a further slowdown through the end of the first half of next year, predicting a drop of 7% in 2024 earnings per share (EPS) for the sector.

Bank of America suggested the luxury-goods stocks that could show the most upside are those that target more affluent customers, or “have historically shown more resilience through the cycle." The analysts said they were more cautious about firms with higher exposure to younger, less affluent shoppers.

Do you have a news tip for Investopedia reporters? Please email us at
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Bank of America. "Luxury Goods: A New Normal."

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.