In this article, we will look at the Top 12 Luxury Stocks According to Hedge Funds.
The Luxury Goods Market and Consumer Behavior
According to a report by Mordor Intelligence, the luxury goods market has a size of $103.10 billion as of 2024. It is expected to grow at a compound annual growth rate (CAGR) of 7.07% and reach $145.08 billion by 2029. Similarly, a study by Global Market Insights published on Yahoo! Finance shows that the luxury packaging market was valued at $17.2 billion in 2023. It is also anticipated to grow and reach $25.8 billion by the end of 2032.
North America’s demand for luxury products is significantly high, primarily due to the region’s high disposable incomes. This is especially significant in the ongoing holiday shopping season in the US. On December 17, Simeon Siegel, BMO Capital Markets senior analyst for retail and e-commerce, appeared on CNBC to discuss the state of the consumer in the current holiday shopping season. He said that the US consumer is overly resilient. In the current scenario, the market is seeing winners grow and laggers fall behind, which is how it should be. This trend goes opposite to market dynamics in COVID-19 when every company grew. Siegel was further of the view that the consumers are still spending. For better and for worse, consumers are scared of not having something under the Christmas tree this year.
On December 10, CNBC’s Steve Liesman appeared on ‘Squawk Box’ to discuss the CNBC NRF Retail Monitor. Numbers from the Monitor corroborated Siegel’s claim and showed healthy consumer spending in November despite a shorter holiday shopping season in 2024. Non-store retailers showed a 21.5% year-over-year growth, reflecting these positive trends. Since this holiday shopping season came with lower gas prices and a deflation in the prices of goods overall, consumers had more discretionary dollars in their pockets and paid somewhat less compared to a year ago. Since luxury items fall in the category of discretionary items, these trends show positive stimulus for the industry.
We discussed consumer behavior in the ongoing holiday shopping season in a recently published article on the 7 best department store stocks to buy now. Here is an excerpt from the article:
“The holiday shopping season is in full swing in the United States. On December 2, Jessica Moulton, senior partner at McKinsey & Company, appeared on CNBC to discuss Black Friday spending and its effects on consumer sentiment. She said that while 2024 was a challenging year for retailers, the numbers rolling in from the holiday season seem promising. High hopes were especially placed on Black Friday sales, and while the numbers aren’t all in, they look pretty good. This trend holds particularly true online, where sales seem to be up by 15% or so compared to last year in many markets. According to CNBC, the total Black Friday e-commerce spending was around $10.8 billion. However, Moulton said that footfall in stores wasn’t so good, and continued to be flat year-over-year.
She said the trends in the sector are changing, with around 75% of shopping journeys starting online at the outset. Although some of them end up with consumers paying visits to the brick-and-mortar stores, much of the shopping journeys end with sales happening online. Furthermore, the retail sector is showing consumer behavior that tends to undertake a multiple retailer journey these days. If it is a bigger purchase, most consumers prefer checking out four to five retailers, either online or offline. This poses a significant change in the sector as compared to around two decades ago”.
Consumers Looking Towards Value at a Discount
On December 2, Mastercard Economics Institute chief economist Michelle Meyer appeared on CNBC to discuss industry trends and said that consumers have been geared to find value and best deals. She said that the Black Friday numbers show that consumers have been monitoring the market and gearing up to spend on the Black Friday weekend.
With inflation cooling and promotions returning, consumers are focused on finding the best deals in the market that offer value at a discount. This was one of the major motivating factors that drove considerably strong spending in e-commerce during the Black Friday weekend. Apparel, jewelry, and electronics remain the top gift sectors for the holidays, but consumers are prioritizing promotions with the greatest value instead of going ahead with brand loyalty. Meyer was of the view that consumers have the ability and the willingness to spend; they are just being savvy with their expenses by spending when promotions and deals come in.
With these trends in view, let’s look at the top 12 luxury stocks according to hedge funds.
Top 12 Luxury Stocks According to Hedge Funds
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 luxury stocks. We then selected the top 12 most popular stocks among elite hedge funds as of Q3 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Top 12 Luxury Stocks According to Hedge Funds
12. Harley-Davidson, Inc. (NYSE:HOG)
Number of Hedge Fund Holders: 23
Harley-Davidson, Inc. (NYSE:HOG) operates Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services. HDMC manufactures and designs luxury Harley-Davidson motorcycles, motorcycle parts, apparel, and accessories. It operates globally, with operations in the EMEA region, Asia, the United States, Canada, Asia Pacific, and Latin America.
The company experienced a challenging global market environment in fiscal Q3 2024 due to macroeconomic and political uncertainty and the pressure of high interest rates affecting its industry and customers. As a result, its global retail sales of new motorcycles dropped by 13% in fiscal Q3 2024. North America saw a 10% decline, compared to 18% across international regions.
Overall, Harley-Davidson, Inc. (NYSE:HOG) is seeing greater spending from higher-income customers. Its motorcycle mix corroborates this, with CVO motorcycles up double-digital percentages throughout 2024.
The company’s touring segment in the United States was up by around 10% through the end of fiscal Q3 2024. This growth was driven by its new touring lineup. It gained more than four percentage points of market share, outperforming the category, its other segments, and the market as a whole. Harley-Davidson, Inc. (NYSE:HOG) ranks 12th on our list of the top 12 luxury stocks according to hedge funds.
Artisan Select Equity Fund stated the following regarding Harley-Davidson, Inc. (NYSE:HOG) in its Q2 2024 investor letter:
“The biggest detractors from performance during the quarter were Harley-Davidson, Inc. (NYSE:HOG), Henry Schein and Expedia. Harley’s share price declined 23% during the quarter after a strong run in Q1. We had significantly reduced our position at higher share prices over the past 12–18 months. The shares have been weak over concerns that higher interest rates are impacting affordability and retail sales. We share these concerns. Harley is likely to reduce its forecasts for the year when it reports, though this now appears to be discounted in the valuation. Famous last words. The shares now trade at a single-digit multiple of earnings. We believe the brand is strong, and management is able to adjust production and costs to meet various demand environments. If interest rates begin to decline as anticipated, demand should improve.”
11. Coty Inc. (NYSE:COTY)
Number of Hedge Fund Holders: 26
Coty, Inc. (NYSE:COTY) is a beauty company that operates a portfolio of brands in color cosmetics, fragrance, and skin and body care. Its Prestige segment operates an array of luxury brands, including Gucci, Marc Jacobs, Miu Miu, Tiffany & Co., Kylie Cosmetics by Kylie Jenner, Hugo Boss, Burberry, Chloe, Calvin Klein, SKKN BY KIM, and more. The company markets and sells its products in more than 121 countries across the globe. Coty, Inc.’s (NYSE:COTY) mass beauty products are primarily sold through supermarkets, hypermarkets, drugstores, department stores, e-commerce retailers, and other channels.
Although the company’s fiscal Q1 2025 growth was moderately lower than expected, it continued to outperform global beauty companies. It delivered like-for-like growth in 9 out of the last 13 quarters, positioning it ahead of its global peers and giving it a competitive advantage. Its net revenue for fiscal Q1 2025 grew by 4.5% like-for-like. This growth was attributed to solid growth in the company’s fragrance, mass fragrance, and mass skin care businesses.
Coty, Inc.’s (NYSE:COTY) prestige fragrance portfolio is performing exponentially. It delivered strong growth in fiscal Q1 2025, especially in the EMEA region. The company’s growth engine markets include Mexico, Brazil, the rest of LATAM, China, India, Southeast Asia, the Middle East, and Africa. Put together, these growth engine markets accounted for around 21% of the company’s fiscal Q1 2025 sales. They also grew strongly at 15% like-for-like in fiscal Q1 2025, including approximately 5% contribution from the hyperinflationary environment in Argentina. Coty, Inc. (NYSE:COTY) takes the 11th spot on our list.
Columbia Contrarian Core Fund stated the following regarding Coty Inc. (NYSE:COTY) in its Q2 2024 investor letter:
“Coty Inc. (NYSE:COTY) – Coty is a beauty company specializing in fragrance, skincare and makeup. For many years, Coty has underperformed peers due to a dilapidated brand portfolio, slow innovation, poor execution, high leverage, and more recently, concerns about fragrance category durability. However, under the leadership of CEO Sue Nabi, the company is undergoing a turnaround by accelerating prestige fragrances and stabilizing consumer beauty products through innovation and improved execution. Fragrances have been extremely strong, and that is Coty’s main product line. However, there is a concern that the market will turn over despite Coty’s management trying to explain that this is a generational shift in usage globally. In addition, Ulta has been losing market share to Sephora, so the entire U.S. beauty market is in a bit of a limbo, adding to uncertainty. Finally, U.S. data from analysts throughout the quarter largely looks only at mass makeup data. Where e.l.f. Beauty is growing massively, Coty is holding share, and everyone else is suffering. This data completely ignores the prestige market where Coty is larger and growing faster. None of these factors are actually impacting Coty, but the stock has been getting dragged down by overall sentiment.”
10. PVH Corp. (NYSE:PVH)
Number of Hedge Fund Holders: 27
PVH Corp (NYSE:PVH) is a luxury fashion company that operates Tommy Hilfiger and Calvin Klein brands. The company undertook a disciplined execution of its brand-building growth plan, which it calls the PVH+ plan, in fiscal Q3 2024. As a result, it delivered on its revenue guidance with strong profitability and EPS.
PVH Corp (NYSE:PVH) came out of the summer season with less old-season clearance inventory, and its new-season inventory failed to fully compensate on its total top line. Revenue for fiscal Q3 2024 was down by 5% compared to last year, which included a 2% decline from the sale of its Heritage Intimates business. However, the company exceeded its guidance primarily due to the timing of wholesale shipments in Europe and an acceleration of expense efficiencies. It delivered an operating margin of 10.5%, surpassing analyst estimates. This was because higher gross margins and strong expense management offset the leverage loss that occurred due to a decrease in the company’s revenue.
The company’s D2C trends have returned to positive, reporting recovery for both September and October. It has plans to improve profitability and revenue in the holiday shopping season, and has a solid inventory composition set up with less old and more new season inventory than the same time in 2023. With consumers starting the holiday shopping season earlier this year, the company is on track for strong holiday performance across all its regions.
Overall, PVH Corp (NYSE:PVH) is positioning its brands for long-term, increasingly profitable sales growth. One example is its Fall 2024 product season, the first season where the company fully influenced product execution globally for both its brands. It experienced higher conversion and significantly stronger sell-throughs for the fall season product across both its brands and all regions compared to last year. As a result, its sell-throughs in Europe for the fall products were up double-digits across all channels. PVH Corp (NYSE:PVH) ranks 12th on our list of the top 12 luxury stocks according to hedge funds.
FPA Queens Road Small Cap Value Fund stated the following regarding PVH Corp. (NYSE:PVH) in its first quarter 2024 investor letter:
“PVH Corp. (NYSE:PVH) is an apparel company that owns the Tommy Hilfiger and Calvin Klein brands globally. Most of PVH’s earnings come from Europe, where the Tommy and Calvin brands are considered “almost luxury” and PVH has generally recorded high single-digit organic growth with demonstrated pricing power during the preceding decade. CEO Stefan Larsson has done an excellent job revitalizing the company and improving margins at PVH’s moribund US operations. Over the past year, PVH and our other apparel companies have performed well as the worst fears for consumer spending didn’t play out. PVH has become a top five holding for us and our apparel holdings (PVH, GIII, LEVI and DECK) now make up almost 10% of the portfolio. On April 2, post quarter end, PVH announced fiscal 23Q4 results where they missed on earnings guidance for the coming year. The stock is down ~20% from its high but now trades at less than ten times forward earnings. We have held our position.”
9. Ralph Lauren Corporation (NYSE:RL)
Number of Hedge Fund Holders: 30
Ralph Lauren (NYSE:RL) is a luxury fashion retailer specializing in designing, marketing, and selling luxury lifestyle products, including apparel, footwear, accessories, fragrances, home, and hospitality. It operates in North America, Europe, and Asia with a brand portfolio spanning Ralph Lauren, Polo Ralph Lauren, Ralph Lauren Collection, Lauren Ralph Lauren, Ralph Lauren Purple Label, Double RL, and others. Besides manufacturing luxury items for men, women, and children, the company’s hospitality segment includes restaurants like New York City’s The Polo Bar and Chicago’s RL Restaurant.
In fiscal Q2 2025, the company reported revenue growth that exceeded expectations. This growth was attributed to continued progress across three of its strategic pillars, which included winning in the consumer ecosystem, energizing and elevating its lifestyle brand, and promoting its Drive the Core and Expand for More strategy. In addition, its direct-to-consumer (DTC) segment, which comprises two-thirds of its business, drove accelerated comparable growth in the quarter and expanded Ralph Lauren’s (NYSE:RL) presence in key markets. Outperformance in sales was led by the company’s brick-and-mortar stores, but its digital channel grew as well. The company is continuing to grow its social media standing, surpassing 62 million followers. This growth was led by Instagram, Line, Threads, TikTok, and Douyin. These trends reflect the company’s increasing popularity.
Its core products, which represent more than 70% of the company’s business, reported a low double digit increase ahead of its total company growth in fiscal Q2 2025. Ralph Lauren (NYSE:RL) is focused on developing its key ecosystems across the globe to continue this positive momentum. It opened 25 new owned and partner stores across the globe in its top cities, largely in Asia, as the continent led growth for the company in fiscal Q2 2025.
8. Nordstrom, Inc. (NYSE:JWN)
Number of Hedge Fund Holders: 32
Nordstrom, Inc. (NYSE:JWN) offers luxury, private-label merchandise for women, men, and children, with a primary focus on apparel, beauty, shoes, accessories, home goods, and more items.
Its net sales for fiscal Q3 2024 surpassed $3.3 billion, with both Nordstrom and Nordstrom Rack delivering a 4% comparable sales growth. The company’s online business also sustained its momentum, experiencing more than 6% digital sales growth. Much of this growth was attributed to the newness Nordstrom, Inc. (NYSE:JWN) has introduced in its brands. Customers are increasingly relating to the company’s offerings, driving positive company net sales growth for the fourth consecutive quarter.
Nordstrom, Inc.’s (NYSE:JWN) primary priorities for the year revolve around operational optimization, Nordstrom banner growth, and continued momentum growth at Nordstrom Rack. Nordstrom, Inc. (NYSE:JWN) also made substantial progress in its supply chain, reducing operating expenses and expanding its focus to increasing speed. It is prioritizing quick order deliveries to its customers and is moving products efficiently through its network to provide freshness and relevance.
For instance, the company’s initiatives for faster delivery of items and fulfillment drove an improvement of more than 40% in the speed of customer returns in fiscal Q3 2024. It ranks 10th on our list of the top 12 luxury stocks according to hedge funds.
7. Signet Jewelers Limited (NYSE:SIG)
Number of Hedge Fund Holders: 34
Based in Bermuda, Signet Jewelers Ltd (NYSE:SIG) is a luxury retailer of diamond jewelry. It operates stores in off-mall locations and shopping malls, primarily under the Ernest Jones and H. Samuel banners. The company’s Other segment comprises subsidiaries that purchase and convert rough diamonds to polished stones.
Although the company is navigating a choppy consumer and industry environment in 2024, it is continuing to drive sales momentum. Fiscal Q3 2025 marked the sixth consecutive quarter of sequential same-store sales improvement for the company. It also has a go-to-market strategy in place for the holiday season, which is expected to drive growth for the company in fiscal Q4 2025.
Revenue for Signet Jewelers Ltd (NYSE:SIG) was $1.35 billion in fiscal Q3 2025, primarily due to same-store sales being down 0.7%. However, fashion sales were positive, as the company is seeing a strong sell-through of its new merchandise. Its strategy to focus on newness to drive higher penetration is continuing to resonate with customers, which has been up nearly 8 points in its core banners compared to last year.
The higher penetration of new merchandise is key to Signet Jewelers Ltd’s (NYSE:SIG) strategy around average transaction value (ATV) and merchandise margin. For instance, its North American fashion ATV was up mid-single digits in fiscal Q3 2025, driven primarily by a more than 30% growth in lab-created diamond fashion sales. It ranks ninth on our list.
6. Ferrari N.V. (NYSE:RACE)
Number of Hedge Fund Holders: 36
Ferrari NV (NYSE:RACE), more commonly known as Ferrari, is an Italy-based manufacturer, designer, and retailer of luxury sports cars. It also produces one-off and limited-series cars and operates under the Ferrari brand. The company boasts a wide range of cars and operates actively in more than 60 markets across the globe through a network of authorized dealers.
The company reported profitability for fiscal Q3 2024. Revenue for the quarter grew by 7% compared to last year, and profitability grew by double-digit percentage. This growth was attributed to the strength of the company’s product mix and the continuing solid trend of personalization. These numbers reflect sustained growth and strong execution for the company.
Ferrari N.V. (NYSE:RACE) is experiencing a solid and continuous brand momentum. The Purosangue, the Roma Spider, and 296 GTS drove deliveries for the company in fiscal Q3 2024. In addition, its order book evolved as per the company’s expectations, with the new 12Cilindri coupe Spider guiding the order intake and providing it with strong visibility well into 2026. Ferrari N.V. (NYSE:RACE) also started the first deliveries of its SF90 XX Spider and increased deliveries of SF90 XX Stradale. It ranks eighth on our list of the top 12 luxury stocks to buy according to hedge funds.
Ensemble Capital Management stated the following regarding Ferrari N.V. (NYSE:RACE) in its first quarter 2024 investor letter:
“Ferrari N.V. (NYSE:RACE): With the company’s utility vehicle, the Purosangue, sold out despite being priced much more aggressively than many investors expected, investor attention has been turning to the company’s long term ability to raise prices. With the business’s earnings power being regularly revised higher by investors who watched the company navigate COVID and inflation easily, the stock has been on a tear.
Ferrari has had a very successful run since we first bought shares in the company in 2017. It has been one of our most successful investments since, with shares rising over five times, and understandably so given how phenomenal this business is and how well it has been managed.
Initially spun out of Fiat (now Stellantis) in 2015, it was a rare jewel within the parent company, where its value was hidden among more standard and premium cars sold under brands such as Fiat, Alpha Romeo, Maserati, Chrysler, Jeep, and others. Under the leadership of the astute business manager Sergio Marchionne, who had run Fiat since 2004, Ferrari came to be recognized as the undervalued and unique asset that it was within its parent…” (Click here to read the full text)
5. Tapestry, Inc. (NYSE:TPR)
Number of Hedge Fund Holders: 38
Tapestry, Inc. (NYSE:TPR) operates a global house of luxury brands, including Kate Spade New York, Coach, and Stuart Weitzman. In fiscal Q1 2025, international revenue gains for the company grew by 2% in constant currency, which included a 27% increase in Europe.
The company is focusing on increasing consumer engagement across its portfolio. It acquired around 1.4 million new customers in fiscal Q1 2025 in North America alone, with all its brands experiencing an increase. More than 50% of these customers were millennials and Gen Z, reflecting the success of Tapestry, Inc.’s (NYSE:TPR) strategy to recruit younger customers to its brands. These customers continued to transact at a higher average unit retail (AUR) than the balance of the company’s customer base.
The company also improved lapsed customer reactivation in North America and delivered compelling omnichannel experiences to engage its customers. It maintained strength in its digital offerings, which grew high single digits compared to 2023 and represented more than 25% of its revenue at accretive margins. Tapestry, Inc. (NYSE:TPR) is also focusing on fueling product excellence and fashion innovation through quality, creativity, and compelling value. This is reflected in the company’s brands, as Coach delivered continued growth in its handbags in fiscal Q1 2025, supported by AUR gains.
Tapestry, Inc.’s (NYSE:TPR) agile supply chain lends it a key competitive advantage, allowing it to effectively adapt to the evolving fashion landscape. It ranks seventh on our list of the 12 luxury brands to buy according to hedge funds.
4. RH (NYSE:RH)
Number of Hedge Fund Holders: 39
RH (NYSE:RH) is a retailer and luxury lifestyle brand in the home furnishing market. It offers a range of merchandise assortment categories, including decor, lighting, furniture, outdoor and garden, textiles, and more. The company operates under the RH, Waterworks, and Real Estate segments.
Despite the volatility of the housing market, the company reported positive momentum in its business. Demand in fiscal Q3 2024 increased by over 13%. The company’s vector is growing in both direction and magnitude, with November demand increasing by around 18%. This growth was attributed to the company’s initiatives surrounding product transformation and platform expansion. Its RH brand is also driving growth, where November demand increased by 24% due to the introduction of the company’s new RH Modern Sourcebook. Demand in the segment has continued to accelerate into December, with month-to-date demand growing by 30%.
The company has similar transformative plans for the remainder of 2024 and 2025. These include the second mailing of its new RH Modern Sourcebook, which includes 54 new collections across furniture, lighting, upholstery, textiles, and rugs. RH (NYSE:RH) increased its advertising investment by around $6 million to meet demand trends in fiscal Q3 2024, allowing circulation and page count expansion. Based on its quarter-to-date demand, this investment is expected to bring positive returns for the company during fiscal Q4 2024 and the first half of fiscal 2025.
Baron Discovery Fund stated the following regarding RH (NYSE:RH) in its first quarter 2024 investor letter:
“During the quarter, we added to our position in RH (NYSE:RH), a high-end retailer of home furnishings and furniture that has a unique vision to transform from a domestic furniture company to a global luxury brand. Shares were pressured in the earlier part of the quarter due to shorter-term concerns regarding demand amid a volatile macroeconomic environment. Despite these short-term pressures, we remain confident in RH’s ability to gain market share in the fragmented high-end furnishings market, and we see a multi-year growth pipeline driven by store expansion around the globe. We also believe that RH will see improvements in profitability as the brand returns to a fuller-priced sales environment, and as it begins to scale its early international investments.”
3. The Estee Lauder Companies Inc. (NYSE:EL)
Number of Hedge Fund Holders: 49
Estee Lauder (NYSE:EL) manufactures, markets, and sells skincare, makeup, hair care products, and fragrances. It sells its products in more than 150 countries and territories under various brand names, including Estee Lauder, Clinique, Aramis, M.A.C., Bobbi Brown Cosmetics, TOM FORD, La Mer, Too Faced, and several others. It also operates the DECIEM family of brands, including The Ordinary and NIOD. In addition, Estee Lauder is a licensee of cosmetics, fragrances, and related items for Dr. Andrew Weil, BALMAIN, and AERIN.
The company’s organic sales decreased by 5% in fiscal Q1 2025, driven by declines in mainland China and global travel retail primarily owned to Hong Kong SAR and Asia. Apart from these three areas, sales in the rest of the company’s global business grew by 1% both on an organic and reported basis. Sales growth also accelerated sequentially from 2% to 3%. A number of Estee Lauder’s (NYSE:EL) markets delivered organic sales growth in fiscal Q1 2025, including Japan and EMEA.
The company’s primary focus is rebalancing its regional growth in the face of market volatility in China. Its strategic reset for fiscal 2025 is based on five core priorities. These include capitalizing on multiple growth drivers of high-end fragrance, advancing in skin care, leveraging winning channels, launching accretive innovation, and driving modernized precision marketing by employing AI and data.
ClearBridge Large Cap Growth Strategy made the following comment about The Estée Lauder Companies Inc. (NYSE:EL) in its second quarter 2023 investor letter:
“We have refreshed our whiteboard and will look to take advantage of such downside earnings revisions among early cycle recovery plays in industrials and consumer discretionary. We are targeting quality themes in the consumer space where estimates have been partly de-risked, similar to the scenario that prompted the purchase of The Estée Lauder Companies Inc. (NYSE:EL) in the fourth quarter. Such names should be well-positioned to deliver improved earnings on the other side of an eventual recession.”
2. Carnival Corporation (NYSE:CCL)
Number of Hedge Fund Holders: 54
Carnival Corporation (NYSE:CCL) is a leisure travel company that operates a portfolio of luxury cruise lines, including Costa Cruises, AIDA Crusies, Princess Cruises, Carnival Cruise Line, and others. Its tour company operates and owns lodges, hotels, glass-domed railcars, and motor coaches.
The company has a strong profitability model in place. Its full-year fiscal 2024 revenues hit an all-time high of $25 billion, over 15% higher than the prior year. It is experiencing continued strength in demand and reported a full-year net income of $1.9 billion for fiscal 2024. Carnival Corporation (NYSE:CCL) hit these highs primarily due to strong demand. The progress was broad-based as the company drove strong pricing in fiscal 2024 as compared to 2023 across its major cruise lines and trades.
Carnival Corporation (NYSE:CCL) has plans to continue this growth momentum. It is actively working on an enhanced destination strategy to attract customers to a cruise vacation offered exclusively by Carnival Corporation’s (NYSE:CCL) portfolio of cruise lines. It is also working to boost awareness and consideration for cruise travel worldwide. Carnival Corporation’s (NYSE:CCL) yield growth is expected to outpace its historical growth rates and exceed unit cost growth. It ranks fourth on our list of the top 12 luxury stocks to buy.
1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
Nike, Inc. (NYSE:NKE) designs, markets, and distributes luxury athletic footwear, accessories, equipment, and services for sports and fitness activities. Its operating segments span EMEA, Greater China, APLA, and North America. The company also designs products specifically for the Converse and Jordan brands. Several of its products are valued at thousands of dollars. Nike, Inc. (NYSE:NKE) is considered one of the top luxury fashion brands, and has a market cap of $113.75 billion.
Nike, Inc. (NYSE:NKE) reported a decline of 8% in its revenues on a reported basis and a 9% decline on a currency-neutral basis in fiscal Q2 2025. This decline was primarily due to the ongoing headwinds from the company’s franchise management actions. It is shifting its product portfolio by reducing the proportion of its business driven by its classic footwear franchises, including Air Jordan 1, Air Force 1, and Dunk. This caused a reduction in revenues from these franchises as the company continued to tighten its marketplace supply. These franchises decelerated faster than the company’s business in fiscal Q2 2025, at a rate greater than fiscal Q1 2025. The company is actively rebalancing product allocations to its highest traffic channel to maximize full-price realization and franchise health.
The company is driving the biggest reductions to its classic footwear franchises on NIKE Direct, which fell 14% with NIKE Digital declining 21% and NIKE Stores declining 2%. However, the company also saw momentum build with positive physical and digital traffic. Black Friday week proved to be the largest demand week ever on NIKE Digital with sales increasing by double-digits. Similarly, 11/11 sales exceeded company plans in Greater China. Fiscal Q2 2025 thus reflected progress in key areas, with the company gaining consumer support. Nike, Inc. (NYSE:NKE) ranks second on our list of the top luxury stocks to buy now.
ClearBridge Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“Other moves during the quarter included sales of United Parcel Service (UPS) and NIKE, Inc. (NYSE:NKE). Nike has become overly reliant on key platforms, like Jordan, for revenue growth while innovation in areas like running has lagged. Nike could face continued revenue and profit pressure as it invests to re-invigorate innovation and re-position the business back toward wholesale outlets. As such, we are seeking out better ways to participate in the global consumer recovery in companies where earnings estimates have already reset.”
Overall, NKE ranks first among the top 12 luxury stocks according to hedge funds. While we acknowledge the potential of luxury stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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