As we would expect, this bodes well for a continued recovery in household consumption in the Euro area and confirms stronger than expected retail sales data that was released earlier this month:
In contrast, stock performance of all of the Apparel, Accessories, & Luxury Goods companies in MSCI Europe has not been positive so far this year...
Since foreign sales accounts for more than 60% of total sales in all but two of this sub-industry's members, we are not surprised to see a disconnect between these stocks and sentiment in Europe. The underperformance is more likely the result of consistently negative revisions to sales and earnings estimates over the last 1-, 3-, and 6-month time periods:
