Has global consumption really downgraded? While some luxury brands are facing challenges, others are thriving.
Take the American luxury brand Coach's parent company, $Tapestry Inc.(TPR)$ , for example. Its stock price surged after the release of its financial report on February 6 and continued to reach new historical highs.
(Tapestry, Inc. is a globally renowned luxury holding company with several well-known brands under its umbrella, including Kate Spade and Stuart Weitzman. These brands are highly recognized and attractive in the market, especially Coach, which has long been a key contributor to the company's sales and profits.)
The high-end fashion brand $Ralph Lauren(RL)$ , known for its "American Classic" style, also saw its stock price jump by over 9% after its financial report was released on February 6, approaching new historical highs.
(Ralph Lauren's products cover a wide range of categories, including fashion, fragrances, children's wear, and home goods. Its core brands include Polo Ralph Lauren and Ralph Lauren, among others.)
In contrast, the more expensive luxury brand $LVMH-Moet Hennessy Louis Vuitton(LVMUY)$ has not been so fortunate, with its stock price experiencing less favorable fluctuations.
Monthly chart
When comparing these brands, the situation becomes clearer. Perhaps due to the perceived economic uncertainties, consumers globally are increasingly favoring high-value choices over luxury brands. While some luxury brands are facing challenges, affordable luxury and high-value brands are seeing increased demand.
Moreover, the widening wealth gap is also leading to a polarization in consumption patterns.
As an ordinary consumer living in China, I definitely believe that the phenomenon of consumption downgrading exists. Amid increasing economic uncertainties, people are more focused on cost-effectiveness, tending to buy products that are cheaper but reliable in quality.
This can also be seen from the latest financial results of $Tapestry Inc.(TPR)$ and $Ralph Lauren(RL)$ in February:
1. Strong Financial Performance
$Tapestry Inc.(TPR)$ 's financial results for the second quarter of the 2025 fiscal year exceeded market expectations, with sales growing by 5% year-on-year to $2.195 billion. The strong performance of the Coach brand was a key driver of the company's overall growth. The company's gross margin remained at a high level of 74.77%, demonstrating strong profitability and cost control capabilities.
$Ralph Lauren(RL)$ 's sales in the third quarter of the 2025 fiscal year grew by 10.9% year-on-year to $2.14 billion, surpassing analysts' expectations of $2.01 billion. Net profit increased by 7.5% to $297 million. The company also raised its revenue forecast for the 2025 fiscal year from a growth of 3% to 4% to 6% to 7%.
2. Successful Brand Strategy and Positive Market Confidence
$Tapestry Inc.(TPR)$’s Coach brand launched several popular products, such as the Tabby bag, which attracted a large number of young consumers and became a significant sales driver. In addition, Tapestry successfully countered negative industry trends through brand innovation and market expansion. Several financial institutions raised their target prices for Tapestry, with JPMorgan increasing its target price to $104 and Jefferies raising its target price to $80. These ratings reflect the market's high recognition of Tapestry's future growth potential.
$Ralph Lauren(RL)$ enhanced its brand visibility through sponsorships of major tennis tournaments, celebrity marketing (such as with Taylor Swift), and social media promotions (like the "preppy style"). The company's "Next Great Chapter: Accelerate" strategic growth plan continues to drive brand development and strengthen market confidence in its future growth.
3.Macroeconomic and Global Market Growth
The luxury industry as a whole is showing signs of recovery, with increased consumer demand for high-end fashion products. Additionally, $Tapestry Inc.(TPR)$ has achieved significant growth in several regions outside Japan, demonstrating its strong global market competitiveness.
$Ralph Lauren(RL)$ 's direct-to-consumer channel revenue grew by 12%, with physical store sales increasing by 13% and online sales growing by 29%. Globally, the wholesale business in the North American market began to recover after several quarters of sluggish growth. In the European market, revenue grew by 16% to $604 million. The Asia-Pacific market saw an overall increase of 14%, with China's sales growing by over 20% and accounting for about 8% of the group's total sales. Consumers' recognition of the Ralph Lauren brand value is high, especially in China, where the brand meets consumers' demand for high-quality clothing through precise marketing and product innovation.
In summary.
The recent stock price highs of $Tapestry Inc.(TPR)$ and $Ralph Lauren(RL)$ are mainly due to their strong financial performance, successful brand strategy, and the market's high confidence in their future development. These companies have achieved global growth and success in omnichannel sales strategies through continuous business optimization and brand innovation.
In addition, companies similar to Tapestry (TPR) and Ralph Lauren (RL) are mainly concentrated in the high-end fashion and luxury sectors. Here are some companies with similar characteristics:
High-End Fashion Brands
$Markel(MKL)$ : A well-known luxury brand famous for its fashionable handbags, clothing, and accessories, similar to TPR and RL in terms of brand positioning and market expansion. Its stock price surged by 10% after the release of its financial report on February 5 (the stock price returned to the starting point on February 18).
$Estee Lauder(EL)$ : A global leader in cosmetics and fashion brands with multiple high-end brands under its umbrella, focusing on brand innovation and market diversification. Its stock price fell by 16% after the release of its financial report on February 4.
$PVH Corp(PVH)$ : A global leading apparel company with well-known brands such as Calvin Klein and Tommy Hilfiger, similar to TPR and RL in brand management and market positioning. After the release of its third-quarter financial report for the 2025 fiscal year on December 4, 2014, its stock price fell by over 20%.
International Luxury Groups
$LVMH-Moet Hennessy Louis Vuitton(LVMUY)$ : One of the world's largest luxury groups, with well-known brands such as Louis Vuitton and Dior, has shown a relatively flat stock performance recently.
$Lanvin Group Holdings Ltd(LANV)$ : With high-end brands like Lanvin, focusing on brand revitalization and market expansion, has also shown a relatively flat stock performance recently.
Hey, what luxury brands do you like and often purchase?
Feel free to show off in the comments section! 😊
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