Luxury brands including Burberry and Cartier reported notable sales growth in China during the first quarter of fiscal 2027, boosted by a robust asset market and improving consumer sentiment, analysts say.

Burberry, the British luxury brand, recorded a 5 percent increase in year-on-year sales, reaching £455 million (HK$4.75 billion) in the quarter ending June 27. The company cited strong performance in the Americas and Greater China regions. Sales across mainland China, Hong Kong, Macau, and Taiwan grew 9 percent compared with the same period last year, sustained by solid local demand and significant contributions from younger consumers, particularly those from Generation Z.

Jelena Sokolova, a senior equity analyst at Morningstar based in London, noted that while these figures indicate some recovery, it remains early to determine if growth will become widespread and sustainable. She highlighted that ongoing wealth creation and high-wage job opportunities in sectors like technology continue to support demand, though challenges persist in areas such as youth unemployment and the housing market.

The optimism around luxury sales corresponds with a positive trend in China’s asset markets, where the technology-heavy Star Market surged approximately 50 percent in the first half of the year, fueled by global interest in artificial intelligence innovation. “I’m cautiously optimistic about the second half of the year in terms of Chinese luxury demand,” Sokolova said, adding that despite recent gains, the market is still below pre-pandemic levels.

In contrast to gains in Greater China, Burberry’s sales in Japan declined by 2 percent year on year, primarily due to the ongoing reduction in inbound Chinese tourists. Globally, however, Burberry experienced growth across all divisions for the first time in three years, with particularly strong sales in outerwear categories.

Swiss luxury conglomerate Richemont, which owns brands such as Cartier and Van Cleef & Arpels, also reported sales increases across all regions in its fiscal first quarter ending June 30. The Asia-Pacific market saw a 21 percent rise, driven largely by jewelry demand. Richemont observed double-digit sales growth in Hong Kong, Macau, and mainland China combined.

Looking ahead, the personal luxury goods market in China is expected to grow modestly in 2026 despite ongoing volatility, according to an industry report from Bain & Company. Factors supporting this outlook include the expansion of the middle class, improving consumer confidence, and government policies designed to encourage luxury consumption within mainland China.