Luxury & Consumer Products: Beta, Multiples & WACC by Sector

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What the numbers say.

The luxury sector has shifted noticeably this month. It is valued a touch lower than a month ago: the median P/E edged down to 20.7x while companies moved both ways, the beta eased to 1.10, and the cost of capital stands at 9.9 %. The sector is more unsettled than in September: the choice of peers and settings moves the value more than it did.

P/E is now the multiple to use

It is the tightest of the multiples the fundamentals explain, a dispersion of 28 % across the 20 companies. EV/Sales spreads by 54 % because it carries the margin differences with it.

The beta to use: 5 years, monthly, 1.10

Among the stable settings it has the tightest spread across the 20 companies; R² 30 %, 19 of 20 betas significant, liquid group (median bid-ask spread 0.24 %). It is the smartZebra standard setting. The settings alone move the median beta from 0.84 to 1.18.

Both choices matter

Ten of the twenty companies move the P/E median by −26 % to +22 %, the settings by up to 47 %. Luxury sits in the handle-with-care corner of the map.

Gross margin is confirmed

The usual yardsticks for luxury: expected growth and gross margin. Expected growth: partly (rank correlation +0.51 with P/E (NTM)). Gross margin: confirmed (rank correlation +0.63 with EV/Sales (NTM)). Median P/E (NTM) by sub-group: luxury 24.6x, sporting goods, apparel & durables 14.2x.

P/E (NTM): median 21.3x → 20.7x

11 more expensive · 8 cheaper

Kering fell most (−16 %), Interparfums rose most (+16 %).

{"m":[["Salvatore Ferragamo","54.8","53.9","−2%"],["Brunello Cucinelli","32.3","33.6","+4%"],["MIPS","31.6","32.9","+4%"],["Hermes International SCA","27.9","27.2","−3%"],["Swatch Group Ltd. Bearer","27.2","27.2","±0%"],["Compagnie Financiere Richemont","26.1","26.0","±0%"],["Interparfums","21.3","24.6","+16%"],["Rational","22.5","24.4","+9%"],["Burberry Group","21.8","22.2","+2%"],["Kering","24.7","20.7","−16%"],["Moncler","17.8","17.4","−2%"],["LVMH Moet Hennessy Louis Vuitton","16.1","16.4","+1%"],["Pandora","15.2","15.4","+1%"],["Thule Group","15.8","15.2","−4%"],["adidas","13.4","14.7","+10%"],["Electrolux","15.6","13.6","−13%"],["Husqvarna","11.5","13.0","+12%"],["HUGO BOSS","12.6","12.7","+1%"],["SEB","9.1","8.7","−5%"]],"b":[["MIPS","1.70","1.61",68],["Pandora","1.52","1.50",90],["Thule Group","1.49","1.43",94],["Rational","1.43","1.39",79],["Hermes International SCA","1.40","1.37",58],["Moncler","1.35","1.31",75],["Husqvarna","1.32","1.28",92],["Compagnie Financiere Richemont","1.29","1.26",78],["LVMH Moet Hennessy Louis Vuitton","1.18","1.15",75],["adidas","1.14","1.10",79],["Kering","1.06","1.09",56],["Salvatore Ferragamo","1.07","1.09",36],["Interparfums","1.23","1.07",47],["Brunello Cucinelli","1.08","1.05",53],["Swatch Group Ltd. Bearer","0.98","0.97",73],["Burberry Group","0.89","0.86",65],["SEB","0.77","0.76",43],["HUGO BOSS","0.73","0.72",59],["PUMA","0.62","0.54",48]],"w":["Salvatore Ferragamo","SEB","Interparfums","PUMA","Brunello Cucinelli"]}

Beta (5 years, monthly): median 1.16 → 1.10

19 of 20 significant

Each line runs from last month’s beta (light dot) to this month’s (blue dot), on the same beta setting.

Do the usual yardsticks hold this month?

The usual yardsticks for luxury, tested on the 20 companies this month.

Each extra point of expected growth adds about 0.7x to P/E.

Expected growth

Partly

Rank correlation +0.51 with P/E (NTM) · clear link from +0.60

Gross margin

Confirmed

Rank correlation +0.63 with EV/Sales (NTM) · clear link from +0.60

Position on the sector map

This sector in gold, the other 19 sectors in blue. Dashed lines at 40 pp are illustrative.

Construction

Chemicals

Utilities

158

Telecom

Media

Travel & Leisure

Retail

Luxury

Consumer Goods

Logistics

Business Serv.

Aero & Defence

Electrical Eq.

Medtech

Pharma

IT Services

Semiconductors

Software

Automotive

Machinery

Luxury

How much the choices move the result

Beta and fit

R² (median)

30 %

Significant betas

19 of 20

Median bid-ask spread

0.24 %

Beta range across settings

0.84–1.18

What moves the value?

Change vs. prior month

−3 % vs. September

Peer impact on the median

−26 % to +22 %

Spread from peer choice (pp)

Spread from beta settings (pp)

Position on the sector map

Handle with care

Cost of capital

Cost of equity (CAPM)

“kE = rf + β · MRP”

rf = base rate, MRP = market risk premium, β = sector median beta.

WACC

“WACC = E/(D+E) · kE + D/(D+E) · kD · (1 − t)”

kD = base rate + credit spread; t = peer-average tax rate.

Tax rate

“t = average tax rate of the 20 peers”

Shown above as Tax rate (%).

Selection rules

Best-fit multiple

“lowest dispersion across the 20 companies”

The reference multiple is used only as a fallback.

Beta setting

“tightest spread among stable settings”

Replaces 5y monthly only if it passes the two-month rule.

Status

“|Δ value| ≤ 1 % and |Δ β| ≤ 0.03 → stable”

Up to ±5 % / ±0.06 → shifted a bit; beyond → shifted noticeably.

Scope

The 20 largest European listed companies by market value with core business in luxury goods, apparel, footwear and consumer durables; primary listing on a European exchange; banks, insurers, financial services and real estate are excluded.