The easing of Covid-19 restrictions, the availability of vaccines and the money accumulated by consumers during the lockdowns have fueled an extraordinary 12 months of growth in Europe in numerous sectors.
High and low recoveries in 2021 saw a strong rebound in earnings, helping European consumer discretionary stocks climb 31.4% from December 2020 to December 7, outperforming the broader S&P Europe 350 index, which rose by 16. , 3%, according to independent research firm CFRA.
“European consumer stocks have seen a dramatic recovery and are back to pre-Covid levels,” says CFRA analyst Andrew Tam. The year of the “reopening of trade” was buoyed by earnings, fiscal stimulus, pent-up consumer demand and vacation budgets that were redirected to consumer goods, he adds.
Luxury goods have been a bumper sector: stocks on average rose 42% year-to-date as of December 7, according to Tam.
The largest and most diversified luxury groups outperformed with gains above the competition and share price growth, it adds. Owner of Cartier
Richemont finance company (ticker: CFR Switzerland) was up 66%. French fashion house
Hermès International (RMS. France) increased by 75%.
by Barron recently wrote that earnings are likely to continue for the world’s largest luxury group,
LVMH Moët Hennessy Louis Vuitton (MC.France), up by 37%. Two titles mentioned in this year’s column also excelled. by Barron highlighted Italian luxury retailer
moncler (MONC.Italy) in March, when shares reached € 49.55 ($ 55.90) thanks to strong online sales and better-than-expected growth in China.
Sales in that key market, as well as South Korea and the United States, led to a 55% increase in sales in the third quarter, Moncler said in October. Since then, the stock has gained 26% to € 62.46.
by Barron wrote in July that eyewear maker Ray-Ban and Oakley
Essilor Luxottica (EL.France) was in a strong position to transform their business on the promise of cost savings, new products and possible acquisitions. One such product was launched in September: a pair of Ray-Bans (in collaboration with
Meta Platforms [FB]) supplied with built-in cameras and microphones. The shares, which were at € 152.23, jumped 19.4% to € 181.80.
Food, drink and tobacco companies lost the momentum to block when consumers turned back, but this was mitigated by customers drinking in bars and restaurants, which generates higher margins.
British American Tobacco (ITV) was at £ 25.36 in October when this column highlighted it in October for its investments in new products. It has now increased by 9%, to £ 27.65.
Not all of our recommendations have achieved the goal. In February, the UK’s online fashion and cosmetics giant
ASOS (ASC.UK) was seen as a big winner during blocking on rivals with brick-and-mortar stores. Its stock was at £ 57.78 ($ 76.33) and ASOS seemed on track for international expansion.
But shoppers then returned to brick-and-mortar stores, and rising supply chain problems led ASOS to issue a profit warning in October. The stock has since plummeted 60% to £ 22.99.
Carmakers, faced with supply chain problems that have led to chip shortages, have tried to take advantage by directing scarce resources towards high-margin premium vehicles. For its part, the German auto giant
Daimler (DAI.Germany) used the slowdown to accelerate its restructuring plan and give a greater boost to electric vehicles, by Barron written in May. It was not enough to relaunch the stock, which fell by 5.6% to € 69.27.