European luxury and sporting goods both underperformed this week, with highly divergent signals from earnings season

Overview

This report reviews the performance of the European luxury and sporting goods sectors for the week of July 24, 2026, including company earnings updates, valuations, share price performance, and the earnings calendar for the coming week. The luxury sector fell 6% this week, significantly underperforming the 1% decline in the MSCI Europe Index and giving back the prior week's 4% gain; the sporting goods sector also fell 6%, continuing to fluctuate due to macro headlines and changing company expectations. The report's core view is that the demand environment is not collapsing across the board, but consumers are more cautious and regional and brand differences are widening, so the investment strategy should focus on selectively choosing stocks with brand momentum, self-help growth, and execution strength.

Core views

In luxury, second-quarter and first-half results continue to show strong divergence. Swatch's sales were better than expected but profitability was weak, and mainland China still has not shown a clear turning point; Moncler's revenue was broadly in line with expectations and EBIT beat expectations, but the Moncler brand was soft in the second quarter due to seasonality, tourist spending, and "buy now, wear now" behavior; Zegna's second-quarter trading update was strong, with group sales up 11% year over year at constant exchange rates, DTC up 17%, and all three brands achieving double-digit DTC growth, supporting the report's positive view on premium men's ready-to-wear and the Zegna brand portfolio. In sporting goods, the sector decline was mainly driven by macro headlines and expectation gaps. adidas came under pressure for not providing the pre-release or guidance raise the market had hoped for, but the report argues it should not be viewed merely as a second-quarter trading opportunity, as continued innovation, brand building, and execution are expected to support second-half profit performance.

Analysis framework

The report uses an industry weekly framework, cross-validating relative sector share price performance, company earnings and trading updates, regional demand, exchange rates, valuation multiples, management commentary, regulatory and ESG events, and earnings catalysts for the coming week. On the luxury side, it focuses on tracking sales, EBIT, DTC, tourist spending, and regional mix for brands including LVMH, Kering, Hermes, Moncler, Zegna, Swatch, Richemont, and Brunello Cucinelli; on the sporting goods side, it focuses on changes in demand, channels, promotions, and costs for companies including adidas, Puma, On, JD Sports, Nike, Deckers/Hoka, Anta, and Xtep.

Methodology notes

• sector_weeklyIndustry weekly and earnings season read-across

  Forming a sector read-across through results already reported and expectations for companies yet to report

  The report maps recent disclosures or trading updates from Swatch, Moncler, Zegna, Deckers, Chow Tai Fook, and others to demand, regional, channel, and profit trends in the luxury and sporting goods sectors, and uses this to assess the risk-reward for next week's results from LVMH, Kering, Hermes, adidas, Puma, and others.

• relative_performanceRelative share price performance analysis

  Measuring market reaction through sector and stock performance relative to the MSCI Europe Index

  The report notes that both the luxury and sporting goods sectors fell 6% this week, underperforming the 1% decline in the MSCI Europe Index, and combines individual stock declines to explain the market's reaction to divergent earnings, expectation gaps, and macro disruptions.

• Valuation methodsValuation multiple comparison

  Comparing valuations of luxury, sporting goods, and retail companies through EV/Sales, EV/EBITDA, EV/EBIT, and P/E

  The report includes valuation tables for luxury and sporting goods, using forecast multiples from 2027E to 2029E to compare market pricing across companies and subsectors, providing context for discussing Richemont's valuation premium and the sector's risk-reward.

Asset mapping & comparison

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

• Richemont

  Positive relative read-across for the luxury sector

  Strengths

  The report believes its delivery is solid both in absolute and relative terms, increasingly supporting a valuation premium versus its own history and the sector.

  Weaknesses

  The report excerpt does not provide the latest single-quarter detailed data.

  Comparison

  Compared with the mixed signals from Swatch, Moncler, and the broader sector during this week's earnings season, Richemont is seen as more resilient.

  Risks

  Sector valuation pressure, macro volatility, uncertainty in China and tourist spending.

• Zegna Group

  Positive read-across for premium men's ready-to-wear and the brand portfolio

  Strengths

  Second-quarter group sales were €517m, up 11% at constant exchange rates, DTC grew 17%, all three brands achieved double-digit DTC growth, the Americas and APAC performed strongly, and Greater China was solid.

  Weaknesses

  Wholesale channels remain a drag, and EMEA performance was muted.

  Comparison

  The report believes Zegna's results provide a positive read-across for Brunello Cucinelli, supporting the view that the premium RTW category is benefiting from the wealth effect.

  Risks

  Soft European trends, wholesale drag, and macro volatility that may affect premium consumption.

• Moncler

  Results were better than they first appeared, but the brand remains soft in the near term

  Strengths

  Group sales were broadly in line with expectations, EBIT excluding one-offs beat expectations by 5%, and H1 EBIT was strong due to strict cost control and first-quarter revenue leverage.

  Weaknesses

  The Moncler brand grew 3% at constant exchange rates in the second quarter, below expectations, affected by softer tourist spending and "buy now, wear now" consumer behavior.

  Comparison

  Compared with Zegna's strong DTC growth, Moncler is more affected by seasonality and tourist mix.

  Risks

  Divergent tourist spending, delayed autumn/winter purchases, brand seasonality, and weaker European traffic.

• Swatch Group

  Sales beat expectations but profit and China read-across were negative

  Strengths

  H1 sales grew 8.5% at constant exchange rates, driven by markets such as the U.S., Japan, Korea, India, Saudi Arabia, and Mexico.

  Weaknesses

  EBIT was significantly below expectations, dragged by FX headwinds and operating deleverage in manufacturing divisions, and mainland China has still not shown the second-half turning point management had expected.

  Comparison

  Its China pressure is viewed by the report as a read-across for other luxury companies.

  Risks

  Weak China demand, FX pressure, and deleverage in manufacturing divisions.

• adidas Group

  Short-term expectation gap but medium-term execution thesis remains intact

  Strengths

  The report believes adidas is not just a second-quarter trade; continued innovation in lifestyle and performance sports, brand building, and execution should support second-half earnings delivery.

  Weaknesses

  When the company released sell-side consensus expectations, it did not accompany them with the pre-release or guidance upgrade the market had expected, putting pressure on the share price.

  Comparison

  Compared with the larger declines in On and Puma this week, adidas fell less, but expectation management became the focus.

  Risks

  Overly high World Cup-related expectations, doubts about the second-half outlook, and weaker macro and European demand.

• Puma

  A pressured asset within the sporting goods sector

  Strengths

  The report covers its gross margin and EBIT expectations in next week's earnings preview.

  Weaknesses

  Its share price fell 6% this week, and the report expects second-quarter group sales to decline 9% at constant exchange rates, with adjusted EBIT at a loss of €48m.

  Comparison

  Compared with adidas, Puma faces more significant near-term earnings pressure.

  Risks

  Revenue decline, profit losses, European demand pressure, and insufficient channel and brand momentum.

• Nike

  Industry read-across from changes in China channel structure

  Strengths

  Taking back mainland China e-commerce and shifting toward DTC should help unify the consumer experience in the medium term.

  Weaknesses

  In the short term, this may lead retailers to clear online inventory before year-end, intensifying China's promotional environment.

  Comparison

  It has a direct impact on distributor revenues such as Pou Sheng and Topsports, with Nike online sales contributing 15% of Pou Sheng's 2025 revenue and 22% of Topsports' revenue in the last fiscal year.

  Risks

  Promotional pressure during the channel transition, inventory clearance, and execution risk in rebuilding the consumer experience.

• Deckers Brands / Hoka

  Read-across of resilience in premium sporting goods

  Strengths

  Deckers quarterly sales grew 5% at constant exchange rates, Hoka sales grew 8% year over year, Hoka DTC sales grew 17%, and the company maintained its full-year low double-digit Hoka growth guidance while raising its profit target.

  Weaknesses

  Hoka wholesale sales grew only 3% due to shipment timing, and European consumer pressure was more evident than in the U.S.

  Comparison

  This provides a read-across that premium demand remains resilient for European sporting goods companies.

  Risks

  European consumer pressure, wholesale shipment timing, and macro and energy price pressure.

Key data

• Weekly performance of the European luxury sector-6%It significantly underperformed the MSCI Europe Index's -1% this week and reversed the prior week's strong +4% performance.
• Weekly performance of the European sporting goods sector-6%It also underperformed the MSCI Europe Index and continued to fluctuate due to macro headlines and changing company expectations.
• Swatch share price performance this week-18%First-half sales were better than expected, but EBIT was significantly below expectations, with mainland China remaining the main drag.
• Moncler share price performance this week-9%Group sales were broadly in line with expectations, and EBIT excluding one-offs beat expectations by 5%, but second-quarter growth for the Moncler brand was below expectations.
• Zegna second-quarter group sales€517m, up 11% at constant exchange ratesDTC grew 17% at constant exchange rates, and all three brands achieved double-digit DTC growth.
• Swiss watch exports in June+11% year over year; +1% adjusted for trading daysThe U.S. was +13% year over year, China was -16.5%, Hong Kong was +7%, and Europe as a whole grew 12%.
• Chow Tai Fook same-store sales in mainland ChinaSelf-operated stores +20%, franchise stores +16%Despite a higher base, growth improved significantly from the previous quarter, mainly driven by weight-based gold jewelry.
• Deckers/Hoka sales performanceHoka sales +8% year over year, DTC sales +17%This reflects continued resilience in premium sporting goods demand, though European consumer pressure is higher than in the U.S.
• U.S. back-to-school spending forecast$146.8bnThe National Retail Federation forecasts 14% growth from $128.2bn in 2025.
• New U.S. tariffsVietnam 12.5%, Cambodia, India and Indonesia 10%These affect major Southeast Asian sporting goods manufacturing hubs and may impact supply chain costs and pricing.

Impact & implications

In terms of investment implications, the report does not support making a simple broad turning-point call on either the European luxury or sporting goods sectors. The underlying tone of luxury demand remains relatively acceptable, but consumers are more selective, regional performance is fragmented, and tourist spending and China demand remain unstable, making share prices highly sensitive to divergent earnings results. In sporting goods, European demand and China channels still face short-term pressure, but premium sporting goods, brand innovation, and DTC execution can still support the medium-term performance of some companies. Sector positioning is already lighter than before the start of earnings season, which may improve risk-reward, but investors should still selectively focus on stocks such as Richemont, Zegna, Brunello Cucinelli, and adidas that have relatively clear momentum or catalysts.

Risks

• Macro volatility and weak consumer confidence may continue to pressure valuations in luxury and sporting goods.
• Demand for luxury and sporting goods in mainland China remains unstable, and Swatch management does not expect a clear turning point in the second half.
• Divergence in European tourist spending and local traffic may further widen performance differences among brands.
• Nike's China e-commerce channel transition may intensify short-term promotional and inventory-clearing pressure.
• New U.S. tariffs may raise supply chain costs for sporting goods manufacturing in Southeast Asia.
• ESG and supply chain governance events may increase reputational and compliance risks for premium fashion companies.
• Excessively high expectations during earnings season may cause even fundamentally sound companies to come under pressure if they do not raise guidance.

What to watch

• LVMH H1 results on July 27; the report expects second-quarter sales to grow 2% at constant exchange rates, with Fashion & Leather Goods up 1%.
• EssilorLuxottica H1 results on July 28; the report expects second-quarter sales to grow 9% at constant exchange rates.
• Kering H1 results on July 28; the report expects total second-quarter sales to grow 2% at constant exchange rates, with Fashion & Leather Goods flat.
• Hermes H1 results on July 29; the report expects total second-quarter sales to grow 6.5% at constant exchange rates.
• adidas second-quarter release on July 30; the report expects second-quarter sales to grow 14% at constant exchange rates, with EBIT margin up 20 basis points year over year to 9.3%.
• Prada H1 results on July 30; the report expects total second-quarter sales to grow 13% at constant exchange rates, but H1 EBIT to decline 20%.
• Brunello Cucinelli H1 results on July 30; the report expects second-quarter sales to grow 10% at constant exchange rates and has already placed it on Positive Catalyst Watch.
• Puma H1 results on July 31; the report expects second-quarter group sales to decline 9% at constant exchange rates, with adjusted EBIT at a loss of €48m.
• Subsequent changes in Swiss watch exports, Chinese gold jewelry consumption, European tourist spending, and U.S. back-to-school spending data.