Jing Daily’s Post

Over a year since China abandoned its Covid-Zero strategy, the anticipated rebound in spending on luxury goods has fallen short of expectations. L’Oreal shares experienced a significant decline of up to 7.7% following a sharp sales drop in North Asia, while Hermes International, known for its luxury Birkin bags, surpassed earnings forecasts but highlighted Asia-Pacific excluding Japan as its weakest market. Read More:- https://lnkd.in/dWGrdnS2

Paid partnership | A year on from our first study into China’s #luxury market, consumer insights from #VogueBusiness and Barclays Investment Bank Research point to a sustained slowdown. From LVMH to Kering, China’s reduction in luxury spending in the latter half of 2023 has placed its status as an engine of global luxury growth in a disputable position. Consumer concerns regarding the #Chinese economy have seen their first decline (3%) since the start of the research period, indicating a potential turning point for the market in the coming year — despite suppressed spend in comparison to early 2023. Discover the findings and predictions for the market below.

Richemont led luxury goods stocks lower amid concerns that demand in the US and China, two of the biggest markets for the industry, is starting to sputter. The Swiss owner of Cartier reported a surprise drop in revenue from the Americas in the three months through June. While Richemont’s sales from Asia rose sharply, China reported slower-than-expected economic growth Monday, signalling signs of a possible pullback in consumer spending. Richemont fell as much as 10 percent, the steepest intraday decline in more than a year. LVMH dropped as much as 5 percent, and Hermes fell as much as 5.3 percent. The luxury goods industry has been counting on a rebound in China as that country’s reopening would make up for weakness in the US market. Now Richemont and its peers are contending with the prospect that its two main growth motors are weakening. Last week, BURBERRY GROUP PLC said the low end of the luxury market in the US softened. Read the full story on why the Swiss luxury goods group reported quarterly sales that raised concerns over how weak the US and China markets might get.

Overall a healthy/ welcomed growth rate normalization Yes China played a role but we see growth rates cooling down across segments/ regions Luxury is all about maintaining scarcity/ desirability Large scale (>$5bn yearly net revenue) luxury brands cannot grow sustainably at a low double digit CAGR while maintaining scarcity/ desirability The below is not a sign of weakness but a much needed cool-off to enable sustainable long term growth #luxury Kering CHANEL LVMH Richemont

LVMH’s resilience, strategic prowess, & impressive track record : A compelling player in the luxury market ! LVMH, the renowned luxury conglomerate, has been a topic of interest lately. Let’s check some key points: 1-Valuation and Trading Range: -Historically, LVMH’s stock has traded within a well-defined range. Over the past decade, it has oscillated between a floor of 20 times profits (P/E ratio) and a ceiling of 30 times profits. -In the second half of 2023, there was a sudden contraction in this valuation multiple, reaching its lowest level before rebounding in January 2024. -Currently, LVMH shares are trading at approximately 22 times expected profit in 2024 and 20 times expected profit in 2025. 2/ Recent Performance: -Despite challenges posed by political upheavals in France and broader European stock market disenchantment, LVMH has weathered the storm. -The latest quarterly results were better than expected, even with a slowdown in spirits sales. -Bernard Arnault, the group’s leader, has been actively buying LVMH stock in the market. 3/ Market Capitalization and Dominance: -LVMH remains the heavyweight champion in the luxury sector. -Market capitalization surpasses the combined value of Hermès, Richemont, Kering, and Prada. -Strategic diversification across segments (fashion, leather goods, watches, perfumes, cosmetics, wines, and spirits) contributes to its success. 4/ Insolent Growth: -Each segment within LVMH has displayed remarkable growth over the past two decades. As a powerhouse and a key CAC 40 player, the market reacts swiftly whenever LVMH shows signs of change. Sources : https://lnkd.in/dQfPHqgp

LVMH, Richemont, and Hermès defied a global sales slowdown in luxury. Global sales at LVMH for the full-year 2023 grew 13 percent, with the French luxury conglomerate recording organic growth across its business groups except wines and spirits. LVMH recorded double-digit organic growth seen in Europe, Japan and the rest of Asia. Richemont’s sales for the year ended March 31, 2023 experienced a significant increase of 19 percent at actual exchange rates and 14 percent at constant exchange rates. All regions, distribution channels, and business areas saw sales growth, both at actual and constant exchange rates. Asia Pacific showed a resurgence with a 6 percent increase in sales, while double-digit growth was observed in all other regions, particularly Japan and Europe. At Hermès, all geographical regions showed strong performance with growth of approximately 20 percent. The sales saw an increase in both the group’s stores (+20 percent) due to high demand and the strengthening of the exclusive distribution network, and in wholesale activities (+24 percent), driven by travel retail. Asia saw robust growth (+19 percent) with significant sales growth in all countries within the region. Japan, too, experienced a consistent increase in sales (+26 percent).

Three weeks ago, LVMH shares lost up to 8.5% of its market value in a single day following the publication of lower-than-expected third-quarter sales. Fashion, leather goods, wines and spirits suffered a sharp slowdown in demand in most regions. LVMH shares are now down nearly 30% from their April high. And the Group headed by Bernard Arnault is not an isolated case... Read the full focuy by Charles-Henry Monchau, CFA, CMT, CAIA #LVMHStockPerformance #FashionIndustryAnalysis #MarketTrends2023

LVMH 2023 results: What could they mean for the luxury sector? In 2023, as the luxury sector was experiencing post-Covid normalisation, LVMH faced challenges, witnessing a 20% decline in share price from its peak. However, the recent fiscal year 2023 results spark hope for a sales recovery across the luxury sector. In his recent article, GAM Investments’ Flavio Cereda-Parini discusses the implications of LVMH’s latest results and his perspective on growth normalisation. 💬 What's your take on this? Read more here: https://ow.ly/jEr250QxTvp Follow GAM Investments and subscribe to our newsletter for more insights: https://ow.ly/tigw50QxTvo #Luxury #LVMH #PostCovid #Equities #Investing For professional investors only. Capital at risk.

The luxury retail segment has been resilient over the past 5 years showing absolutely zero signs of slowing down. Even with unemployment rates increasing & sky-high inflationary levels. Until recently that is, luxury conglomerate LVMH (the largest in the world) reported a slowing down of discretionary spending from its aspirational, luxury customers. Will this overall cooling translate across the entire sector? Likely not as there will be some that weather the storm with having the right products, trends & messaging to lure consumers to their stores & digital properties. Luxury behemoth LVMH on Tuesday reported a surprising drop in U.S. sales in the second quarter, as its chief financial officer said “aspirational customers are not shopping as much as they used to.“ LVMH’s U.S. sales slid 1% in the second quarter from the prior-year period. The disappointing results in the U.S. market came after Cartier owner Richemont earlier this month reported a 4% decline in U.S. sales. Richemont shares fell 10% on the news, pressuring other luxury stocks throughout the week as analysts braced for a potential U.S. luxury slowdown. During the LVMH earnings call Tuesday, CFO Jean-Jacques Guiony said sales dropped in the U.S. as aspirational consumers no longer spent on entry-level products. While he said he couldn’t explain the exact reason for the drop, he said fading stimulus payments after COVID could have contributed. “If we assume that that group was benefitting from subsidies during COVID, those come to an end at some point,” he said. #consumerconfidence #brandmarketing #brandstrategy https://lnkd.in/eXt2nrvd