BofA: Luxury Goods: China: Taking Stock
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Bank of America takes stock of China's luxury market, with model estimates pointing to roughly 4% constant-currency revenue growth in 2026 — a slowdown of about 270 basis points versus 2025 — or 220 basis points excluding Richemont. By region, the Americas and Asia ex-Japan are each estimated to have gained around one percentage point of share of luxury revenues. In company results, Emperor Watch & Jewellery posted 5% revenue growth in the first half of fiscal 2026, with watches up 9.8%. More than half of the luxury market is controlled by three players. Hong Kong jewellery sales trends have improved relative to 2019 but slowed versus 2021, and the picture in Macau looks very similar, likewise down 6% year over year. Willingness to purchase luxury goods has broadly declined across all categories, while tax tightening in China since 2024 has shifted toward a higher effective tax burden and stronger enforcement.
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