However, we lack confidence in the sustainability of its economic profits.
Concerns over the health of Chinese consumers has led to a sell-off.
Upcoming operational improvement and brand quality are more than priced into the wide-moat firm's share price.
The mid-priced jewelry player is poised to weather the current industry headwinds better than its smaller peers.
Industry insider Alessandro Bogliolo most recently held the top position at privately owned Diesel, where he initiated a turnaround strategy aimed at preserving the brand’s luxury positioning.
While we still think the company will be able to gain share from independents, we reflect lower near-term industry growth and a smaller scope for share gains in our forecasts.
The short tenure of executives at the wide-moat firm is affecting management’s ability to focus on running the business for the long term.
We are leaving our moat ratings and individual valuations unchanged, with both stocks trading in line with our fair value estimates.