In an interview with CNBC wealth, Frédérique Carrier, RBC Wealth Management’s head of
investment strategy, says luxury stocks still possess a great value from a long-term
perspective, regardless of a slight dip in value amidst a short-lived market crisis.

Here, Carrier emphasizes on the importance of pricing power and how the stocks of consumer
staples are performing significantly worse in contrast to consumer discretionary luxury goods
with the “cost of living crisis”, as said by Carrier, being a primary cause of its decline. This makes the latter a better pond to fish in.

As per the source, Nike was seen to show a staggering 8.280% decline in their stocks, making it the worst in its segment. These numbers are followed by the UK-based Jd Sports with a 3.373% decline and Puma with a 1.610% decline. Adidas comes last here with a decline of just 0.730% in their stocks as compared to the last quarter.

However, this would not dismiss claims of the sales of consumer discretionary luxury brands like Gucci taking a downward trend as a result of not getting the anticipated amount of interest among the Asia-Pacific markets. It is also to be noted that Asia-Pacific countries like China have been facing problems with their economy. Japan on the other hand, has been witnessing a stagnation in the influx of consumers.

Carrier however, prefers not to take the short-term trends critically or approach things in a negative way, and is optimistic that these short-term negative trends would not stay the same for long, making luxury stocks significantly valuable at the end of the day with its possible retreat in future, paving way for its good entry point.

Written By Advaith Krishnan

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