Three Luxury Giants Set to Capitalize on Emerging Markets Rebound in 2026

The global luxury goods sector is poised for a meaningful turnaround in 2026 after navigating a challenging 2025. According to the Bain & Altagamma Global Luxury Report, the sector finished 2025 essentially flat at approximately €1.44 trillion ($1.56 trillion) in personal luxury spending—one of the weakest performance cycles since the financial crisis. However, mounting evidence suggests the worst may be behind us, with emerging markets and China’s stabilizing consumption patterns positioning select luxury stocks for significant gains ahead.

China’s Consumption Stabilization Opens the Door for 2026

China’s luxury market tells a compelling recovery story. While the world’s second-largest economy faced headwinds throughout much of 2025, demand indicators shifted notably in the latter half of the year. According to Mordor Intelligence research, despite the earlier slowdown, China’s luxury goods market—valued at hundreds of billions in annual spending—is fundamentally supported by an expanding middle class and accelerating digital retail adoption. This foundation points toward sustained mid- to long-term expansion.

What makes this particularly significant for investors is that luxury houses have already begun recalibrating their approach. Brands are dialing back aggressive price increases in favor of broader product ranges and refreshed creative offerings, while simultaneously fine-tuning their portfolios to match local consumer preferences. The result: early signs of improved foot traffic in flagship stores and localized demand recovery suggest China could emerge as a primary driver of global luxury growth as we move through 2026.

Emerging Markets: The Next Growth Frontier

Emerging markets represent the critical catalyst for the sector’s anticipated 3-5% global growth forecast in 2026—a marked acceleration from 2025’s flat performance. The Asia-Pacific region alone commands 39.8% of the world’s luxury market share, making it indispensable to any recovery thesis. Younger, digitally native affluent consumers in emerging economies are gradually returning to discretionary purchases, creating a meaningful volume tailwind that pure price increases cannot deliver.

Trade policy has also cleared a significant obstacle. U.S.-China tariff tensions, which created uncertainty throughout 2025, are expected to stabilize through late 2026, reducing cost pressures on manufacturers and consumers alike. This geopolitical normalization removes a major headwind and creates a more favorable environment for luxury demand expansion.

Three Strategic Picks Positioned for Emerging Market Gains

Kering: Diversified Portfolio, Concentrated Upside

The Paris-based conglomerate controls a powerhouse roster of globally recognized labels—Gucci, Yves Saint Laurent, Balenciaga, Bottega Veneta and Alexander McQueen. While 2025 tested the company’s resilience, Kering’s scale and brand diversity provide meaningful exposure across the Americas, Europe and Asia. As Chinese and emerging market consumption rebounds, Gucci and the broader Kering portfolio should capture meaningful benefit.

Currently carrying a Zacks Rank #2 (Buy) designation, PPRUY trades with compelling growth prospects: analysts anticipate 35.2% earnings expansion coupled with 1.4% revenue growth in 2026. For investors seeking comprehensive emerging market exposure through an established luxury giant, Kering presents an intriguing entry point.

Richemont: Jewelry Resilience in a Recovering Market

Switzerland-headquartered Richemont operates through its Jewellery Maisons, Specialist Watchmakers and Other segments, anchored by powerhouse brands including Cartier and Van Cleef & Arpels. The company’s jewelry division has proven among the most resilient within the luxury complex, even as broader demand softened.

While China-related softness previously weighed on sentiment, Richemont’s geographic diversification and robust U.S. jewelry performance provide crucial counterbalance. The easing of tariff-related pressures that had previously threatened Swiss export economics removes a key overhang heading into 2026. CFRUY carries a Zacks Rank #3 (Hold) with expected fiscal 2027 earnings growth of 10.3% on revenue expansion of 6.8%.

Burberry: Brand Repositioning Meets Market Recovery

The London-headquartered luxury fashion house has undergone extensive brand recalibration aimed at elevating its luxury positioning and enhancing its product assortment. This multi-year transformation temporarily pressured results amid the sector-wide slowdown, but stabilization in China and emerging markets should provide meaningful acceleration.

Burberry’s historical revenue concentration in Asia-Pacific makes it particularly leveraged to Chinese consumer spending recoveries. Fiscal 2027 forecasts suggest the company could deliver standout performance with projected earnings growth of 67.9% alongside 3.9% revenue growth. BURBY currently holds a Zacks Rank #3 rating, making it a compelling value opportunity for investors betting on emerging market demand normalization.

The Path Forward: Why 2026 Looks Different

The convergence of several favorable trends creates a compelling backdrop for luxury stock outperformance in 2026. Emerging markets are gradually returning to growth mode; China’s consumption patterns are stabilizing after 2025’s weakness; and tariff uncertainty is receding. Leading brands are responding strategically by adjusting pricing and product mix rather than relying solely on price elasticity.

For investors navigating a complex market, Kering, Richemont and Burberry offer differentiated exposure to this recovery narrative while maintaining the brand strength and operational scale necessary to capitalize on renewed emerging market appetite for luxury goods.