Worried about a recession in 2023? No wonder. The "R" word has been pumped on media outlets as 2022 draws to a close. With inflation still running hot, there's worry that what has been a resilient consumer up to this point could finally tighten up on spending and induce an economic downturn. 

But even among consumer goods stocks, there's a way to play defense: luxury brands. Realistically, recessions have a much lower impact on wealthy households, so popular high-end goods tend to continue performing pretty well -- especially if the recession is mild as is broadly expected next year. If you're looking to play defense with your consumer discretionary stocks, you can put the rich to work in your portfolio and profit.

With that in mind, LVMH Moët Hennessy Louis Vuitton (LVMUY -3.11%), Tapestry (TPR -0.85%), and Lululemon Athletica (LULU 1.15%) are three luxury stocks that could thrive even if a recession strikes in 2023. 

LVMH: Good news for the world's largest house of luxury brands

The world's largest luxury conglomerate, LVMH Moët Hennessy Louis Vuitton, was already having a pretty decent 2022. Through the first nine months of the year, revenue across all five of its segments (wine and spirits, fashion and leather, perfumes and cosmetics, watches and jewelry, and selective retailing) grew at a strong double-digit pace. Overall sales jumped 28% compared to 2021 to 56.5 billion euros, a new record as LVMH's 75 "maisons" fully recovered from pandemic lockdowns and then some.

In a sign of just how well things have been going, LVMH co-founder and CEO Bernard Arnault and family have retaken the "world's richest person" spot from Elon Musk, according to the Forbe's Billionaire List. 

Will the good times keep strutting down the runway for LVMH, though? It seems they certainly could, in part because of a development in Asia. After social unrest, China is ending parts of its "zero-COVID" policy, a strict set of rules that have sunk the most populous country's economy. Not incidentally, China is the second-largest market for luxury goods, accounting for tens of billions of dollars in spending in normal times. There's optimism that some normalcy might be coming back. 

As of this writing, LVMH stock trades for 26 times trailing 12-month earnings per share. If double-digit sales and earnings growth continue -- and according to management's commentary they could -- it isn't an unreasonable price tag.

Tapestry: An American luxury icon making a comeback

I'll admit I used to follow Tapestry -- the parent organization of Coach, Kate Spade, and Stuart Weitzman -- much more closely. But it fell off my radar as Coach (the original corporate name before the rebrand to Tapestry) had a messy go of things integrating its acquisitions of Stuart Weitzman (2015) and Kate Spade (2017). Shares have underperformed the market as a result.

TPR Chart

Data by YCharts.

Tapestry has rebounded nicely from an early pandemic slump, though, and sales are actually at all-time highs. For fiscal 2023, management is expecting a slight decline off of these highs due to a record run-up in the U.S. dollar (which lowers the value of international sales when converted back into dollars for financial reporting).

However, in spite of this challenge, earnings per share are expected to rise in the mid-single-digit percentage range this year, helped by an estimated $700 million in share repurchases. And much like LVMH, Coach will also see some lift if China's zero-COVID policies help the economy recover again. 

In all, this iconic American leather designer is in decent shape right now. And while earnings growth may not be much to show off to your friends, Tapestry stock looks cheap at less than 12 times trailing 12-month earnings per share. Who knew a leather handbag (stock) could be so affordable? If you're looking for a solid luxury retailer to help weather challenging times, Tapestry could be your ticket. 

Lululemon: Part luxury, part everyday comfort for the active enthusiast

Perhaps Lululemon doesn't spring to mind as a house of "luxury." Yet I'd argue luxury is more than price (though a pair of women's yoga leggings are easily over $100, but I digress). Luxury is about comfort as much as it is a symbol of how much money can be blown on superfluous items. And in that department, Lululemon excels.

The blend of high-end activewear and comfort is clearly winning over fans. To wit, Lululemon just released Q3 2022 earnings, and revenue was up a sizzling 28% year-over-year, driven by an impressive 22% increase in comparable sales (a blend of foot and web traffic and average customer ticket). International revenue jumped 41% in the quarter as Lululemon stretches its reach outside of its core North American market. China's reopening could help this metric continue running hot too. 

One of my favorite things about Lululemon's business model, though, is its robust profit margins. Its Q3 operating margin was 19%. A typical clothing retailer is doing well if it puts up high-single-digit or low-teens operating margins. Often running close to or over 20% in recent years, Lululemon's lucrative profitability is further proof this is a luxury brand at heart -- but one finding more mass appeal.

The shares did take a slight dip after the last earnings update due to weaker-than-expected Q4 guidance. Management thinks revenue will increase "only" 25% year-over-year. This is likely just a cool down as the stock has rallied more than 20% the last couple of months. Lululemon currently trades for 37 times expected adjusted earnings per share for 2022, a premium price tag. But for a company that has consistently grown as fast as this one the last few years, it could be a worthwhile purchase here.

Recession or not, Lululemon is clearly doing something right that's resonating with its patrons.