Global luxury demand growth has slowed during the third quarter to date, prompting Bank of America to lower its expectations for the sector in 2027.
Industry data monitored by the bank indicates that luxury demand growth decelerated by around 2 to 3 percentage points compared with the second quarter.
Bank of America said the slowdown was primarily concentrated in July and the first half of August. Trends subsequently improved from mid-August through the first two weeks of September.
The bank attributed part of the third-quarter slowdown to a more demanding year-earlier comparison.
Q3 Revenue Growth Estimated at 4%
Bank of America forecasts luxury-sector revenue growth of 4% for the third quarter of 2026, which would be 3 percentage points below the growth rate recorded in the second quarter.
The bank noted that the comparison with the prior-year period is approximately 6 percentage points more demanding.
Looking further ahead, Bank of America has reduced its 2027 sector forecast to 4% revenue growth.
Its estimates vary by category, with the bank forecasting growth of 3% for soft luxury and 6% for hard luxury.
These figures are Bank of America projections and do not represent reported industry results.
Sector Trades at Around 20 Times Earnings
The luxury sector is currently valued at around 20 times earnings, according to Bank of America, placing it at the lower end of the 20-to-25-times price-to-earnings range identified by the bank.
Bank of America said the valuation appears attractive on that basis, although it does not currently identify a positive catalyst for the sector in the near term.
The bank’s valuation assessment represents its own market analysis rather than an indication of future share-price performance.
Bank of America’s conclusions are based on the industry data it tracks, with its forecasts remaining dependent on subsequent consumer spending trends and other market conditions.
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