Luxury Market's 2026 Inflection Point: Why These 3 Stocks Could Shine as Emerging Demand Resurges

The Setup: Why 2025 Was Brutal, But 2026 Looks Different

The luxury goods world took a beating in 2025. Flagging consumer confidence, shifting spending patterns, U.S.-China trade friction—the sector had it all working against it. According to Bain & Altagamma’s Global Luxury Report, global personal luxury spending essentially flatlined at around €1.44 trillion ($1.56 trillion), barely recovering from 2024’s contraction. This marked one of the bleakest cycles since the 2008 financial crisis.

But here’s where it gets interesting: multiple forecasts now signal a meaningful pivot in 2026. The luxury sector is expected to expand by 3-5% globally—a material jump from 2025’s stagnation. The driver? A combination of brand recalibration, renewed demand from emerging markets, and early stabilization signals from China, historically the single largest luxury consumer base.

For equity investors, this potential inflection creates an opportunity. We’re examining three internationally-listed luxury companies—Kering (PPRUY), Compagnie Financiere Richemont (CFRUY), and Burberry Group (BURBY)—each positioned to capitalize on the next growth leg.

Meet the Three: Global Brands with Emerging Market Exposure

Kering: Portfolio Strength Across Continents

Paris-based Kering operates one of the luxury sector’s most powerful brand collections: Gucci, Yves Saint Laurent, Balenciaga, Bottega Veneta, and Alexander McQueen. The portfolio spans heritage houses to contemporary creative powerhouses, giving the conglomerate broad exposure to different consumer segments and geographic regions.

Through 2025, demand pressures hit Kering like the rest of the sector. Yet its operational scale and multi-brand architecture mean it benefits disproportionately when consumption rebounds—particularly in Asia-Pacific and emerging markets. Consensus expectations for 2026 reflect this confidence: earnings growth of 35.2% is projected against just 1.4% revenue growth, suggesting margin expansion as sales recover. The stock currently holds a Zacks Rank #2 (Buy).

Richemont: Jewelry’s Resilience in Luxury Downturn

Switzerland’s Compagnie Financiere Richemont operates through its Jewellery Maisons (including Cartier and Van Cleef & Arpels), Specialist Watchmakers, and other luxury segments. Jewelry proved more defensive than fashion or leather goods during 2025’s slowdown—it held up better as affluent consumers remained willing to invest in timeless pieces rather than discretionary fashion.

Richemont’s geographic diversification also matters. While China softened, North American jewelry demand remained stable, providing ballast. The earlier concern around U.S. tariffs on Swiss luxury exports created volatility, but late-2025 tariff de-escalation eased this headwind. For fiscal 2027 (ending March 2027), analysts forecast 10.3% earnings growth alongside 6.8% revenue expansion. The company carries a Zacks Rank #3 (Hold).

Burberry: Heritage Brand Riding the Brand Repositioning Wave

UK-headquartered Burberry is best known for its iconic trench coats and heritage outerwear aesthetic—a brand lineage as enduring as the symbols and craftsmanship traditions of great civilizations, where heritage itself becomes a luxury symbol. The company has spent multiple years sharpening its luxury positioning, moving away from mass-market positioning toward premium-only distribution and refined product curation.

This repositioning dampened near-term results during the 2025 luxury contraction. However, Burberry remains highly leveraged to Asia-Pacific demand; a meaningful chunk of historical revenues flow from this region. As China stabilizes and emerging market consumers return to discretionary spending, Burberry stands to gain substantially. For fiscal 2027, the company is expected to report 67.9% earnings growth on 3.9% revenue growth—the most dramatic margin expansion of the three. Burberry carries a Zacks Rank #3.

Why China Matters More Than Headlines Suggest

The conventional narrative around China’s luxury slowdown focuses on economic headwinds. The reality is more nuanced. Luxury spending declined through the first half of 2025 but stabilized noticeably in the second half of the year. This stabilization—not a V-shaped rebound, but a pause in deterioration—matters enormously.

Mordor Intelligence data values China’s luxury goods market at hundreds of billions of dollars, with mid- to long-term growth underpinned by expanding middle-class wealth and accelerating digital retail. Major luxury houses have responded by adjusting pricing strategies, enriching local product assortments, and intensifying engagement with Chinese consumers. Early signals—improved foot traffic in flagship stores, rising online luxury sales—suggest the worst has passed.

For 2026, if this stabilization converts to modest growth, it becomes the largest incremental demand driver globally. Given that Kering, Richemont, and Burberry each generate substantial revenue from Greater China operations, a swing from contraction to growth in this region would meaningfully expand earnings.

The Trade Policy Backdrop: Risk Reduced

A critical variable that had depressed luxury stocks was tariff uncertainty. U.S.-China reciprocal tariffs created unpredictability around manufacturing costs and consumer pricing. By late 2025, negotiated tariff reductions took hold, with expectations those reductions persist through at least late 2026.

This reduction in trade volatility matters. Luxury companies with global supply chains had been forced to make conservative inventory and pricing decisions amid tariff risk. With that risk materially lower, companies can focus on growth optimization rather than cost mitigation.

The Broader Market Shift: Emerging Markets as Growth Engine

A key theme underpinning 2026 luxury outlooks is the rising importance of emerging markets beyond China. Asia-Pacific accounted for 39.8% of global luxury market share in 2025, per IMARC data. Younger, digitally-native affluent consumers across Southeast Asia, India, and other emerging regions are increasingly participating in luxury consumption.

Leading luxury brands have recognized this and shifted strategy accordingly. Rather than aggressive price increases (a strategy that backfired by alienating consumers in 2024-2025), brands are emphasizing broader product assortments, creative refreshes, and localized engagement. This approach re-engages price-sensitive luxury consumers while maintaining brand prestige.

What This Means for 2026 Returns

If the consensus view proves accurate—3-5% global luxury growth, renewed Chinese demand, emerging market acceleration—then the three stocks discussed here appear cheaply positioned relative to the potential earnings revisions ahead. Kering’s 35.2% earnings growth forecast alone suggests meaningful multiple expansion if the company executes. Burberry’s 67.9% earnings growth would reflect a significant operational inflection.

Of course, consensus forecasts can prove wrong. A sharper-than-expected China slowdown, geopolitical escalation, or recession would derail this thesis. But for investors with conviction in emerging market consumption’s sustainability and China’s stabilization trajectory, Kering, Richemont, and Burberry offer direct exposure to that recovery narrative—all through liquid U.S.-listed securities.