U.S. luxury credit card spending remained resilient in May, with 2-year stacked growth turning positive

Overview

This report uses Citi Card Insights U.S. credit card transaction data to assess spending trends in luxury goods, sporting goods, and beauty in May 2026. The conclusion is that U.S. high-end consumption remains resilient: luxury brand spending rose year over year for the fifth consecutive month, and 2-year stacked growth turned positive again. However, growth is coming more from ASP than from traffic, indicating that pricing and high-end customer cohorts are still supporting revenue, while broad consumer demand has not fully recovered.

Core views

The core views are: first, U.S. luxury credit card spending rose 3% year over year in May and remained positive despite a higher base; second, 2-year stacked consumption growth turned from negative to positive, easing concerns about rapid demand deterioration; third, high-income consumers are supported by wealth effects from equities and asset prices, while lower-income consumers show weaker confidence; fourth, luxury company share prices have significantly underperformed the European market year to date, and valuations have fallen to about 20x FY27E P/E, below historical averages; fifth, if inflation, geopolitics, and tariff disruptions persist, discretionary consumption could still weaken.

Analysis framework

The report aggregates Citi credit card transaction data by month and category to track year-over-year and 2-year stacked changes in spending across luxury brands, the luxury market, sporting goods, and beauty. It uses transaction value as an approximate indicator of ASP and the number of transacting customers as a proxy for traffic. At the same time, the report regresses historical quarterly constant-currency sales growth against credit-card-implied sales growth to validate the explanatory power of the credit card data for U.S. sales trends at the company level.

Methodology notes

• Alternative dataCiti Card Insights credit card spending tracker

  Uses highly aggregated and anonymized selected Citi credit card transaction data to observe U.S. consumption trends.

  This dataset is not representative of Citi's overall cardholder base and is not adjusted for the number of credit card customers. It may be affected by changes in Citi's card business share, transaction classification methodology, and sample selection bias.

• Growth analysisYear-over-year and 2-year stacked growth

  Observes both single-month year-over-year growth and cumulative growth across two years to mitigate base effects.

  The report highlights May's 3% year-over-year growth and the improvement in 2-year stacked growth from -3% to +2%, indicating that the improvement is not driven solely by a low one-year base.

• Volume-price decompositionASP and number of transacting customers

  Uses changes in transaction value as an approximate indicator of ASP and changes in the number of transacting customers as a proxy for traffic or number of buyers.

  ASP was still up by the mid-teens year over year in May, while the number of transacting customers was down about 10% year over year, indicating that resilience in spending is driven more by pricing and higher-end customer cohorts than by a broad recovery in traffic.

• Model validationRegression of credit card data against quarterly sales

  Aggregates monthly credit card data into quarterly U.S. consumption and compares it with reported quarterly constant-currency sales growth in the U.S. for covered companies.

  The report states that the overall correlation is about 0.75, and for most brands the regression fit R-squared exceeds 0.8, supporting the use of credit card data as a leading or coincident indicator of sales trends.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Tapestry (TPR.N), Capri Holdings (CPRI.N), Watches of Switzerland (WOSG.L), Birkenstock (BIRK.N)

  The report identifies these as companies with the highest or relatively high U.S. exposure, making them the most sensitive to U.S. credit card spending data.

  Strengths

  If high-income U.S. consumers remain resilient, these companies are more likely to benefit quickly from improving sales readings.

  Weaknesses

  The number of transacting customers is still down about 10% year over year, indicating that demand improvement is not fully driven by a recovery in traffic.

  Comparison

  Tapestry ranks highest in U.S. exposure, followed by Capri, Watches of Switzerland, and Birkenstock.

  Risks

  Weakening U.S. consumer confidence, tariff disruptions, declining price acceptance, and slower high-end consumption.

• LVMH (LVMH.PA), Richemont (CFR.S), Kering (PRTP.PA), Hermès (HRMS.PA)

  These are global luxury leaders and core covered companies, serving as key mapping targets for U.S. consumption trends and global category trends.

  Strengths

  Resilience of high-end consumers, stronger hard luxury versus soft luxury, and continued medium-term repricing potential for Hermès and Richemont jewelry brands.

  Weaknesses

  The 1Q26 reporting season showed slower 2-year stacked growth in most regions outside Asia ex-Japan.

  Comparison

  LVMH, Richemont, and Kering rank in the middle for U.S. exposure, while Hermès has relatively lower U.S. exposure.

  Risks

  Price increases alienating entry-level consumers, FX volatility, tariffs, geopolitics, and a reversal of wealth effects.

• Hugo Boss (BOSSn.DE), Burberry (BRBY.L), Swatch Group (UHR.S), Prada Group (1913.HK), Moncler (MONC.MI)

  The report lists these as a group of companies with lower U.S. exposure.

  Strengths

  Relatively lower direct sensitivity to short-term fluctuations in U.S. credit card spending.

  Weaknesses

  Less able to directly benefit from resilient high-end U.S. consumption and more dependent on demand improvement in other regions.

  Comparison

  Moncler is listed as having the lowest U.S. exposure; Prada Group, Hermès, Swatch Group, Burberry, and Hugo Boss are also in the lower-exposure group.

  Risks

  Uncertain demand in Europe and Asia, daigou disruptions driven by price gaps between Japan and China, and changes in FX and travel retail.

• Sporting goods and beauty consumption basket

  Used as adjacent discretionary consumer sectors to luxury for observing broader U.S. consumption elasticity.

  Strengths

  Beauty was -3% YoY in May, improving from -7% in April.

  Weaknesses

  Sporting goods was -4% YoY in May and remains in negative growth territory.

  Comparison

  Compared with luxury brands at +3% YoY, sporting goods and beauty performed more weakly.

  Risks

  Pressure on lower-income consumers, inflation, downtrading, and contraction in discretionary spending.

Key data

• Luxury brand spendingMay +3% YoYFifth consecutive month of growth, slightly slower than April's +4%.
• 2-year stacked consumption growthMay +2%, April -3%Turned positive against a comparison base about 5 percentage points higher.
• Transaction value / ASPUp by the mid-teens YoYStill strong, though slightly weaker than before.
• Number of transacting customersAbout -10% YoYTraffic or number of buyers remains under pressure.
• Watch brands and retailersMay +7% YoYTurned positive again from -4% in April, with 2-year stacked growth rising to +23%.
• JewelryMay +6% YoYAccelerated from +1% in April, with 2-year stacked growth rising to +16%.
• Leather goods and ready-to-wearBoth +2% YoY in MayLeather goods slowed from +6% in March and April, while ready-to-wear eased slightly from +3% in April.
• Overall luxury market indexMay +1% YoYStrong performance in online discount / resale offset weakness in online luxury platforms.
• Sporting goods and beautySporting goods -4% YoY, beauty -3% YoYSporting goods was broadly stable, while beauty improved from -7% in April.
• U.S. savings rate2.6% in May 2026A lower savings rate increases downside risk to discretionary spending.
• Luxury share prices and valuation-20% YTD, about 20x FY27E P/EVersus about +6% for the European market over the same period; absolute and relative valuations are both down about 20%, implying a 15% to 20% discount to historical averages.
• Regression performance of credit card dataOverall correlation about 0.75, with most brands above 0.8 R-squaredSupports the use of the data to track U.S. quarterly sales trends, though company-level differences remain.

Impact & implications

In terms of investment implications, the May data supports the view that U.S. high-end luxury demand has not materially lost momentum, especially with better recovery in watches and jewelry. However, declining numbers of transacting customers, weakening consumer confidence, and price-driven growth indicate that the quality of the recovery is uneven. Companies with higher U.S. exposure are most sensitive to these data, while companies with lower U.S. exposure require greater focus on Europe, Asia, and FX factors. Valuations have already corrected significantly, and if subsequent consumption data remain stable, market concerns over further earnings downgrades in the sector may ease; if inflation and geopolitical pressures persist, discretionary consumption and traffic could weaken again.

Risks

• Geopolitical tensions and conflict in the Middle East could push up energy prices and continue to weigh on consumer confidence.
• Inflation pressure, negative real income growth, and a falling savings rate could weaken discretionary spending.
• Long-term price increases in luxury may alienate entry-level and aspirational consumers, weighing on traffic recovery.
• U.S. tariff policy and potential rebate arrangements remain uncertain, affecting pricing and margins for European and Swiss luxury companies.
• The Citi Card Insights sample has selection bias and may also be affected by changes in Citi's credit card market share.
• If wealth effects from equity markets or real estate reverse, support from high-income consumers could weaken.

What to watch

• Whether U.S. luxury credit card spending year over year and 2-year stacked growth remain positive in the coming months.
• Whether the divergence between ASP growth and the number of transacting customers narrows, especially whether traffic can improve.
• U.S. consumer confidence, savings rate, employment, and wage growth data.
• Changes in tariffs, potential rebates, and pricing strategies of European/Swiss luxury companies.
• Category rotation among watches, jewelry, leather goods, and ready-to-wear.
• Whether consensus FY26E/FY27E sales and EBIT forecasts for luxury companies continue to be revised down.
• The impact of Japan-China retail price gaps, JPY moves, and adjustments to Japan's duty-free shopping system on daigou activity.