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Investing.com - Barclays expects low-to-mid-single-digit sales growth in Mainland China for the first quarter based on recent channel checks, though the firm notes significant dispersion in performance across luxury brands.
The investment bank said feedback from its recent trip to China suggests sentiment remains unchanged from six months ago. Barclays forecasts the total Chinese luxury consumer cohort to decline roughly 2% in the first quarter, reflecting ongoing weakness in offshore spending, particularly in Japan. For fiscal 2026, the firm projects a modest recovery with the Chinese cohort up approximately 1%, compared to a 7% decline in fiscal 2025.
Burberry (LON:BRBY) and Moncler (BIT:MONC) received the most consistently positive feedback from Barclays’ China channel checks and are expected to post positive growth in the region during the first quarter. LoroPiana, Cucinelli, and MiuMiu also stood out as outperformers, while other brands continue to post double-digit declines. Barclays said sentiment is improving at Dior, while Gucci’s turnaround is expected to take time, with the brand still tracking double-digit declines in China.
Barclays maintains its overweight rating on Richemont, Moncler and Burberry ahead of first-quarter results. The firm said it sees upside risk for these names, citing Richemont’s exposure to the defensive jewellery category, Moncler’s outperformance in China, and Burberry’s turnaround momentum. Barclays also holds an overweight rating on Prada (BIT:1913) but sees a lower chance of a first-quarter beat due to challenging comparisons for MiuMiu.
The firm said China increasingly exhibits characteristics of a mature luxury market, with growth driven more by market-share gains and brand strength than macro tailwinds. Foreign tourists are now contributing up to 10% of luxury sales in some malls. Barclays maintains its neutral view on the luxury goods sector overall, citing limited potential catalysts for a clear rebound.
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