By Andrea Figueras

European luxury companies start to report results for the first half this week. Here is what to know.

Following a soft start to the year, luxury momentum is expected to remain subdued, partly due to lower spending from tourists in Japan and Europe at a time when the uncertainty related to President Trump's tariffs is weighing on consumers.

UBS analysts said that the actions taken by brands to reinvigorate growth are unlikely to take effect before the second half of 2026. Following a roller-coaster start to the year, the softer second-quarter performance seems to be priced in by the market, UBS said in a note to clients.

Analysts at HSBC Global Research forecast a revenue decline of 1.7% for the second quarter after muted growth of 0.2% in the previous three months. Results are likely to show high dispersion between companies, but the sector will report an overall slowdown in growth, they said.

WHAT TO WATCH

--TOURISM FLOWS: Luxury companies should report a deceleration in the second quarter, analysts at Bank of America said in a note. "The key driver of the slowdown is tourism spend, in both Europe and Japan," they said, adding that the current year is shaping up to be one of the weakest years for luxury demand, apart from the Covid-19 pandemic. Japan--a country that became a bright spot for high-end brands as Chinese shoppers took advantage of the weak yen to buy luxury goods cheaply--should have experienced slowing tourism, UBS analysts said, noting that this will have hit each brand differently. As for Europe, a weak U.S. dollar will likely have had an impact on tourism, as visitors might have found the continent a bit pricier than they were accustomed to, HSBC analysts said.

--U.S. TARIFFS: A key topic during the upcoming earnings season will be any pull forward in demand in the U.S. due to Trump's levies as well as pricing measures implemented by companies to tackle the duties, UBS analysts said. The country--a key market for the luxury industry--emerged as a bright spot amid a downturn in consumption in China. The economic and market disruption as well as geopolitical and trade tensions have hurt the confidence of high-end consumers, according to a report by Bain & Company and Altagamma.

--JEWELRY VS. LEATHER GOODS: Investors will also focus on category trends amid lagging growth of leather goods, while jewelry enters a period of sustained outperformance, UBS analysts said. Luxury consumption in the Americas is increasingly investment-driven, which continues to benefit the jewelry category, AlphaValue analyst Jie Zhang wrote in a note.

WHEN COMPANIES ARE SCHEDULED TO REPORT:

--Brunello Cucinelli: July 10

--Richemont: July 16

--Burberry: July 18

--Moncler: July 23

--LVMH: July 24

--EssilorLuxottica: July 28

--Kering: July 29

--Hermes International: July 30

--Prada: July 30

--Salvatore Ferragamo: July 31

--Hugo Boss: Aug. 5

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

July 09, 2025 06:58 ET (10:58 GMT)

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