The growing number of wealthy consumers and their increasing incomes, a rising desire for exclusivity and uniqueness, the strength of branding and brand equity, the expanding influence of social media and digital platforms, and the rapid pace of globalization are driving growth in the luxury industry.

Therefore, investors could consider looking into luxury stocks, Movado Group, Inc. (MOV), Brilliant Earth Group, Inc. (BRLT), and Fossil Group, Inc. (FOSL), which look affordable at their current valuations.

The rising number of millionaires, brand loyalty among customers, and the rising perception among consumers that luxury goods contribute to greater social acceptance are the key market drivers enhancing the luxury fashion market growth.

Therefore, the global luxury fashion market is projected to grow at a CAGR of 5.8% by 2032. The increase in market share during the forecast period is related to increasing acceptance by millennials and Generation Z and the rise in travel and tourism.

Considering these conducive trends, let’s examine the Fashion & Luxury stocks in detail, starting with the third one:

Stock #3: Movado Group, Inc. (MOV)

MOV designs, sources, markets, and distributes watches in the United States and internationally. The company operates in two segments: Watch and Accessory Brands and Company Stores.

MOV’s forward EV/Sales of 0.51x is 61% lower than the industry average of 1.31x. Its forward EV/EBITDA multiple of 9.30 is 18.8% lower than the industry average of 11.45.

MOV’s net sales for the third quarter that ended October 31, 2024, were reported at $182.73 million. Its gross profit came in at $98.40 million. Net income came in at $5.43 million and $0.22 per share.

Analysts expect MOV’s revenue and EPS for the second quarter (ending February 2024) to increase 7% and 9.1% year-over-year to $62.52 billion and $4.05, respectively. Furthermore, the company has topped the consensus EPS estimates in each of the trailing four quarters, which is impressive.

Shares of MOV have surged 3.1% over the past three months to close the last trading session at $19.05.

MOV’s POWR Ratings reflect its outlook. MOV also has a B grade for Value. It is ranked #25 out of 58 stocks in the B-rated Fashion & Luxury industry. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.  

To see additional POWR Ratings for Growth, Momentum, Sentiment, Stability, and Quality, click here.

Stock #2: Brilliant Earth Group, Inc. (BRLT)

BRLT designs, procures, and sells diamonds, gemstones, and jewelry in the United States and internationally. The company’s product assortment and merchandise include a collection of diamond engagement rings, wedding and anniversary rings, gemstone rings, and fine jewelry.

BRLT’s forward EV/EBIT of 7.56x is 50.3% lower than the industry average of 15.20x. Its forward EV/EBITDA multiple of 3.99 is 61.9% lower than the industry average of 10.45.

BRLT posted net sales of $99.87 million in the third quarter that ended on September 30, 2024. Its adjusted net income was $1.49 million, and its EPS came in at $0.02.

Street expects BRLT’s revenue for the fiscal first quarter (ending March 2025) to increase 6.9% year-over-year to $104 million. Its EPS for the same period is expected to be $0.03. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters.

The stock gained 6.5% intraday to close the last trading session at $1.81.

BRLT’s POWR Ratings reflect robust prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. BRLT has a B grade for Value, Sentiment, and Quality. It is ranked #9 in the same industry. 

Beyond what is stated above, we’ve also rated BRLT for Momentum, Growth, and Stability. Get all BRLT ratings here.

Stock #1: Fossil Group, Inc. (FOSL)

FOSL designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses.

FOSL’s trailing-12-month P/S of 0.07x is 92.2% lower than the industry average of 0.91x. Its forward P/B multiple of 0.53 is 75.6% lower than the industry average of 2.19.

FOSL posted net sales of $287.40 million in the third quarter that ended on September 28, 2024. Its gross profit came in at $142.20 million. Its total current assets came in at $575.90 million as of September 28, 2024, compared to $784.90 million as of September 30, 2023.

The stock gained 2.4% intraday to close the last trading session at $1.69.

FOSL’s POWR Ratings reflect robust prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. FOSL has an A grade for Value and a B for Growth. It is ranked #9 in the same industry. 

Beyond what is stated above, we’ve also rated FOSL for Momentum, Sentiment, Quality, and Stability. Get all FOSL ratings here.

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BRLT shares were trading at $1.75 per share on Thursday afternoon, down $0.06 (-3.31%). Year-to-date, BRLT has declined -16.67%, versus a 1.12% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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