Bernstein sees more moderate luxury growth in 2025
** The luxury goods industry faces moderate spending growth in China next year, Bernstein says, projecting 5% to 7%top-line growth for the sector,skewed towards the second half of 2025
** Among positive factors, Bernstein notesfavourable economic conditions such as global rate cuts and supportive Chinese economic policies
** It however sees that potential new import duties to the U.S.and expected low single-digit rate growth for Chinese consumer spending could impact the sector
** "New import duties to the USA could be the wild card of 2025," broker says, adding that this could have an inflationary impact and delay the interest rate downward path in the U.S.
** It addsthat soft luxury mega-brands have suffered a significant momentum decline, hinting that prices have gone up too far
** Bernstein prefers Hermes HRMS.PA citing its guarded stance on price hikesfollowing the pandemic, and Burberry BRBY.L on its "back to basics" strategy
** It notes fading momentum in LVMH LVMH.PA core brands along with changes in its executive team, and lowersits top-line and EBIT forecast by 5% and 9.2%, respectively
** Bernstein expects Gucci's metamorphosis to weigh on Kering's PRTP.PA performance and cuts its top line and EBIT expectationsby 8% and 23%, respectively
Reporting by Hugo Lhomedet
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