Luxury Stocks’ Nascent Revival Is About to Face Earnings Test

The recent rally in the shares of luxury goods makers will be put to the test this earnings season, as valuations are already back at demanding levels.

After a rocky first half of the year, a gauge tracking the sector has jumped 14% over the past two months in a relief rally as damage from the Trump administration’s tariffs prove less severe than feared for exporters. That’s cranking up the pressure on companies to deliver market-pleasing results, even as they battle challenges like China’s uneven economic recovery and the stronger euro.

Earnings and sales growth for luxury companies has been ...