A new wave of luxury brands is gaining momentum in the market as consumer tastes shift toward high-quality yet affordable options. Amid these shifting dynamics, Canada Goose Holdings Inc. (GOOS), Movado Group Inc. (MOV) and Brilliant Earth Group Inc. (BRLT) highlight high-end luxury stocks that are emerging as attractive investment opportunities. Masu. These stocks currently appear to be significantly undervalued and show potential.
As the luxury fashion market continues to evolve, new trends such as sustainability, direct-to-consumer (DTC) business models, and collaborations with fast fashion retailers are reshaping the industry. Companies that adopt personalization and innovative approaches to meet consumer demands are gaining significant market share.
The global luxury fashion market is expected to reach $145.4 billion in revenue this year and is projected to grow at a CAGR of 3.2% from 2024 to 2029. The US remains the largest market, generating $35 billion in 2024. A focus on personalized experiences and sustainability efforts will make this sector even more attractive.
With these favorable trends in mind, let’s take a closer look at Fashion & Luxury stocks.
Stock #3: Canada Goose Holdings Inc. (GOOS)
Headquartered in Toronto, Canada, GOOS is a performance luxury apparel brand offering parkas, jackets, rainwear, footwear and accessories for men, women, youth and children.
In terms of non-GAAP forward P/E ratio, GOOS is currently trading at 13.17x, which is 24% lower than the industry average of 17.32x. The company’s forward EV/EBIT multiple is 12.78x, which is 18% lower than the industry average of 15.59x.
GOOS announced on November 19 that the Toronto Stock Exchange (TSX) has approved the renewal of its Normal Course Issuer Bid (NCIB). This will allow the company to buy back up to 4,556,841 subordinate voting shares, equivalent to 10% of the publicly traded shares, between November 22, 2024 and November 21, 2025.
GOOS’ revenue for the fiscal second quarter ended September 29, 2024 was C$267.8 million ($191.74 million). Operating profit amounted to C$1.6 million ($1.15 million). Additionally, the Company’s adjusted net income and adjusted net income per diluted share attributable to Company shareholders were C$4.0 million ($2.86 million) and C$0.05, respectively.
Analysts expect GOOS to report EPS of $1.08 for the quarter ending September 30, 2024, up 5.5% year-over-year. Sales for the quarter are expected to be $441.51 million. It beat Street EPS and revenue estimates in each of the trailing four quarters, which is great.
Shares have fallen 10.6% over the past year, closing at $9.50.
GOOS’s POWR rating reflects GOOS’s solid outlook. POWR ratings are calculated by considering 118 different factors, with each factor weighted to the best degree.
GOOS earns a B grade for value and quality. Ranked 34th out of 61 stocks in the Fashion & Luxury industry with a B rating.
In addition to the above, we also give GOOS grades for Growth, Momentum, Stability, and Sentiment. See all GOOS reviews here.
Stock #2: Movado Group, Inc. (MOV)
MOV designs and sells watches under brands such as Movado and licensed names such as Coach and Tommy Hilfiger. We serve jewelry stores, department stores, and online marketplaces, as well as sell jewelry and direct e-commerce.
In terms of future EV/Sales, MOV is currently trading at 0.49x, which is 62.4% lower than the industry average of 1.29x. The company’s forward price-to-sales multiple of 0.64 is 33.7% below the industry average of 0.95x.
On September 4, MOV announced its global campaign, “When I Move You Move,” featuring a star-studded brand ambassador. The campaign emphasizes dynamic energy and connection, reinforcing Movado’s heritage in a vibrant and engaging way.
The annual dividend is $1.40, which translates to a dividend yield of 7.5% at prevailing price levels.
MOV’s net sales for the fiscal second quarter ended July 31, 2024 were $159.31 million. Operating income was $3.03 million. Additionally, net income and net income per share attributable to Movado Group, Inc. were $3.86 million and $0.16, respectively.
Mr. Street expects MOV’s revenue for the quarter ending October 31, 2024 to increase slightly year-over-year to $187.7 million. The company is expected to report EPS of $0.32 for the quarter. It beat consensus EPS estimates in each of the subsequent four quarters.
Shares fell 1.3% over the last month, closing at $19.07.
MOV’s POWR rating reflects a strong outlook.
Value and sentiment rating is B. It ranks 33rd out of 61 stocks in its industry.
Click here to access MOV’s growth, stability, momentum, and quality ratings.
Stock #1: Brilliant Earth Group Ltd. (BRLT)
BRLT designs and sells fine jewelry, including diamonds, gemstones, and engagement and wedding bands. The company serves customers around the world through its e-commerce platform and showrooms, providing an omnichannel shopping experience.
In terms of future EV/Sales, BRLT is currently trading at 0.15x, 99.8% below the industry average of 1.29x. The company’s forward EV/EBIT multiple is 8.11x, which is 48% lower than the industry average of 15.59x.
BRLT announced on September 6 the expansion of its international shopping capabilities to better serve customers around the world. The brand has a growing global presence, highlighting its commitment to providing a seamless digital shopping experience and ethically sourced fine jewelry.
BRLT had net sales of $99.87 million for the third quarter ended September 30, 2024. Adjusted net income was $1.49 million and EPS was $0.02.
Street expects BRLT to have sales of $418.36 million for the fiscal year ending December 2024. EPS for the same period is expected to be $0.06. Additionally, it beat consensus EPS estimates in each of the trailing four quarters.
BRLT stock has declined 1.8% over the past month, closing at $1.65.
BRLT’s positive outlook is also evident from its POWR rating. The stock has an overall rating of “B”, which equates to a “buy” according to our proprietary rating system.
It has an A grade for value and a B grade for sentiment and quality. It ranks 9th in the industry.
Click here to see BRLT’s assessment of Growth, Value, Momentum and Stability.
What should I do next?
Get this special report on three low-priced companies with strong upside potential, even in today’s volatile markets.
3 stocks that will double this year >
Want more great investment ideas?
3 stocks that will double this year
GOOS stock was unchanged in premarket trading on Friday. Year-to-date, GOOS has fallen -19.83%. In comparison, the benchmark S&P 500 index rose 26.05% during the same period.
About the author: Kritika Sarma
An interest in risky financial products and a passion for writing led Kritika to become an analyst and financial journalist. She has a Bachelor’s degree in Commerce and is currently enrolled in the CFA program. She aims to help investors identify untapped investment opportunities through a fundamental approach. more…
