Market expectations for earnings at European luxury-goods makers are overly optimistic given softening demand conditions and buying trends, according to analysts at RBC. A weakening economic backdrop is producing mixed data points in China and a potential moderation in US spending.

A team led by Piral Dadhania said in a note that a creative push at luxury brands is unlikely to achieve the expected boost to sales in the tougher circumstances. They described their stance as "more prudent" amid growing concerns about demand elasticity in key markets.

The warning comes as luxury brands face headwinds from changing consumer behavior and economic uncertainty. RBC's cautious outlook suggests earnings estimates may need downward revision as spending moderates across both Chinese and US markets.