LONDON — The retail and luxury analysts at Barclays see a tough second half ahead for many luxury goods groups, albeit against easier comparatives with the previous year.

“Underlying growth remains weak in soft luxury,” according to a report issued Tuesday by the bank’s fashion and luxury equity research team. “We expect only Japan and parts of APAC [Asia-Pacific] to show growth. Mainland China has stabilized, according to recent comments, although Europe has slowed after the terrorist attacks and biometric visa introduction, and the U.S. is weak and highly promotional. Competition is intense in soft luxury, with pricing differentials remaining elevated.”

Barclays described first-quarter trading as “a disappointment” and pointed out that the second quarter will come up against tougher comparatives. Analysts’ second-half consensus forecasts, meanwhile, “require quite a material recovery [on the part of the brands], albeit against an easier comparative.”

The bank pointed out that shares in luxury goods firms are trading at a 21 percent premium to the market and at a premium to the average growth of the past 10 years. As a result, Barclays said it believes that share valuation concerns will persist.

The Barclays team said eyewear remains its favored area despite a disappointing first quarter, due to the greater predictability of earnings and high cash generation. “This is driven by demographics with the aging population as well as emerging markets.”

Sports and athleticwear is seeing the best growth, it said, pointing to Adidas as the fastest-growing company in terms of sales and the only one that Barclays covers with positive earnings momentum.

In hard luxury, the bank pointed to the dismal Swiss watch export data and falling Hong Kong retail sales highlighting “a continued destock for watches, with jewelry growth slowing.”

“Hopefully, Richemont’s decision to buy back inventory will help improve the channel, although positive data points remain difficult to find with margin pressure also an issue,” Barclays said.

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