LIVE MARKETS-Consumer sector showing signs of life in Europe's early earnings

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CONSUMER SECTOR SHOWING SIGNS OF LIFE IN EUROPE'S EARLY EARNINGS

Earnings season in Europe is slowly gathering steam and early outperformers have been consumer facing, with Burberry BRBY.L the latest to beat expectations on Friday.

Deutsche Bank analysts are optimistic on European earnings, particularly the consumer-facing sectors.

"We continue to think that consumer names will benefit from higher spending, especially in Europe," Deutsche Bank writes.

"First Q4 results (Richemont, Zalando, Adidas) showed positive developments in the consumer space, and strong beats vs consensus."

Deutsche Bank has been overweight retail since October, preferring the sector to luxury, but the upbeat results from Richemont CFR.S and Burberry could be signalling an upturn after a disappointing 2024.

"It looks like Luxury companies are able to generate solid sales growth even without a pronounced recovery in China," DB says.

"In case Luxury earnings surprise positively, we will review our call as this might shift flows from Retail into Luxury."

Next week, Europe's biggest company and luxury-leader LVMH LVMH.PA reports, along with the next three largest European companies - Novo Nordisk NOVOb.CO, SAP SAPG.DE and ASML ASML.AS.

Barclays notes that Thursday is the busiest day of Europe's earnings season when measured by market cap, with 36 companies reporting with a total market cap of 1.2325 trillion euros.

For more on earnings, click here

(Samuel Indyk)

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