The celebration of Black Friday (the last Friday of the month of November) opens the door to one of the great consumer seasons that ends after the sales in January. The big textile brands are not only sensing this appetite at the physical store level: investors are also starting to buy their shares on the stock market. The main companies of retail and luxury lead, in the few six sessions of this month of December, the largest increases in the Old Continent.
Since 2000, December has been a bullish month for the Stoxx 600 Consumer Products and Services and the Stoxx 600 retail with increases slightly less than 1%. But this December, it breaks all the statistics. The Stoxx 600 of consumer products and services recorded a revaluation of almost 7% this month and, for its part, the Stoxx 600 retail around 5.5% increase since this last month of the year began. Of these two indices that bring together the main textile firms on the continent, Up to five companies report advances of more than 10% in December: Hugo Boss, Zalando, Moncler, Kering and Hermès.
The recent increases of these companies are also justified in the latest stimuli that the Chinese government has promised (a very relevant part of the consumers of these groups come from the Asian giant). The Politburo is trying to carry out packages of economic measures that boost consumption and internal demand in the country, such as those it already announced at the end of September and to which additional measures could now be added.
Hugo Boss closed last month with its price at the lowest level of February 2021, but it took less than a week for it to recover about 26% of its value. This means regaining 575 million euros of capitalization and becoming the most bullish firm on the Old Continent so far this month. Only with what has been achieved in these days, if the month were to close at this moment, the company would achieve its best monthly performance on the stock market since November 2020 (when the mood for the appearance of the Pfizer vaccine was a breath of fresh air for companies). stocks and Hugo Boss rose 31.3%).
During the year, however, the German company continues to suffer from red numbers and its price plummets by more than 39%, even despite the rebound in these sessions. “Hugo Boss has successfully initiated its turnaround in the last year and a half with market share gains and a faster-than-expected reacceleration of profits. However, the bottom line is getting tougher and with exposure to the European consumer (>60% of sales) facing an increasingly difficult living environment, we believe the scope for positive surprises could be more limited in this phase,” they explain from JP Morgan.
Although it will be difficult to erase this sharp drop, the consensus of analysts that includes Bloomberg He is optimistic and predicts that in the coming months Its shares can still rise an additional 16%.
Zalando investors had not celebrated good news from the company on the stock market for three consecutive years (it lost 22%, 53% and 35% in 2021, 2022 and 2023 respectively), but they were willing to break the bad streak and that the numbers red will not be repeated in 2024. The company rose nearly 62% in the year and only 16 points of these promotions were achieved in the last six sessions.
Its price marked this same Monday, in addition, highs of the year and is close to the level of 35 euros per share, which has not been touched since May 2023. At the moment, Zalando’s cruising speed on the stock market is difficult to follow, even for the analysts’ own reviews. The consensus still sees a slight additional potential of 2%, but more and more see the group above 40 euros, which leaves it with the possibility of continuing to rise by 16% or more during 2025. 76% of analysts It continues to advise taking positions in the stock price.
“ANDWe hope the focus will be on Zalando’s capacity to generate growth/profit in fiscal year 25; we are more positive about the growth rate in and reduced distribution capacity next year likely means Zalando is well positioned to achieve an expansion of margins,” say Barclays.
Moncler shares ended November returning to the low levels of two years ago. Less than a week ago, its drop in the year was close to 17%. Now, after an increase of 11%which elevates it as one of the most bullish firms on the Old Continent this month, reduces its decline for the year to below 7%. Experts expect this Italian fashion company to continue rising another 11% by 2025.
“Moncler brands could face weaker demand than expected, challenging the consensus €3.3 billion in sales by 2025, up 6% year-on-year. Seasonal offers and categories are growing, while marketing events attract more followers. It is possible that the Ebit margin of almost 30% will not be reached in 2024, given the lower momentum of own retail sales with higher margin and the probable operational deleveraging”, they allege from Bloomberg Intelligence.
If there is a company that has suffered too much from the weakness of Chinese consumers, it has been the French company Kering and it is of little use to rebound more than 10% in December. The exposure of its brands (such as Gucci, Yves Saint Laurent or Balenciaga, among others) to the Asian continent has caused the luxury brand to experience its worst year on the stock market since 2008. Currently, it leaves more than 37% of its value in the year, that is, it has subtracted almost 19,000 million euros from its market value.
For its part, Hermès (owner of the most expensive bag in the world) also advanced 10% in December. The lower level of accessibility to this brand’s products and the loyalty of its customers is also reflected in the stock market and this It is one of the few luxury companies that will register profits on the stock market in 2024, of 20%although experts point out that its securities are trading without potential.
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