|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||403.20 - 415.80|
|52 Week Range||387.50 - 498.20|
|Beta (5Y Monthly)||0.72|
|PE Ratio (TTM)||25.03|
|Earnings Date||Jan 28, 2020|
|Forward Dividend & Yield||6.80 (1.59%)|
|Ex-Dividend Date||Apr 21, 2020|
|1y Target Est||396.00|
This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll apply a...
(Bloomberg Opinion) -- When even LVMH misses estimates, it’s not a good look for the luxury sector.While the owner of the Louis Vuitton and Christian Dior brands still delivered 8% growth in organic sales in the final quarter of the year, this was slightly below the consensus of analysts’ estimates of 8.7%. Organic sales from the fashion and leather goods division — its driver, accounting for 41% of sales and 64% of operating profit in 2019 — rose by 15%. That’s impressive, but still slower than the second and third quarters.The world’s biggest luxury group hasn’t been immune from the unrest in Hong Kong and a slowdown in Japan after the country increased its consumption tax in October. The backdrop could get worse, given the spread of the deadly coronavirus, which has claimed more than 130 lives.LVMH’s chairman and founder, Bernard Arnault, said on Tuesday that if the outbreak was contained quickly — say in two to two-and-a-half months — the effect would be manageable. If it lasted longer, it would be more serious, he added. Given that Chinese consumers accounted for about 35% of luxury purchases last year, according to Bain & Co. and Altagamma, all top end groups are exposed to the spread of the deadly virus. It’s clearly too early to say how things will progress, and with China grappling with how best to stop the spread of a novel virus that’s infected thousands of people, now isn’t the time to worry about handbag sales. But the uncertain outlook speaks to just how dependent many of the world’s global consumer brands are on China’s market and Chinese consumers wherever they are.For example, on Tuesday Starbucks Corp. said that it would have upgraded its financial projections for the year had it not been for the outbreak in mainland China, its most important growth market. While its high-end Roastery in Shanghai may look like a luxury temple, with queues to rival those at Louis Vuitton, it is just one of its 4,000 outlets across the country. The group has closed more than 2,000 cafes in response to the spread of the illness.As for LVMH, while it will be hit just like the other big brands, it may be better placed to weather any impact than most of its rivals. Its exposure to Chinese consumers is around the industry average — about 30% — according to analysts at UBS. Thanks to both its geographic and product diversification, with sizable operations in the U.S., for example, it is less dependent on Chinese shoppers than many of its rivals.With sales about three times that of its nearest competitor, it also has scope to change its focus, for example by investing in marketing campaigns to attract domestic customers in the Europe and the U.S., where it’s just bought diamond jewelry specialist Tiffany & Co. It also has scope to cut costs in Asia, if the situation deteriorates further. Consequently, LVMH would face a potential 3% fall in this year’s earnings from a 20% drop in Chinese consumption in the second quarter, according to UBS, which expects some other luxury groups would be hit harder. LVMH hasn’t been immune from the sell-off in luxury shares over the past 10 days. It’s down about 6% since Jan. 17. Even with the recent dip, the shares are up about 60% over the past year, and remain at a deserved premium to the Bloomberg Intelligence top luxury peer group.It’s still early days in terms of establishing the toll the deadly virus might take on luxury and consumer groups. But LVMH’s scale and financial strength should make it one of the more resilient.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Record Results in 2019 Paris, 28 January 2020 The Christian Dior group recorded revenue of €53.7 billion in 2019, up 15%. Organic revenue growth was.
(Bloomberg Opinion) -- If you have to ask the price, you can’t afford it. No wonder Bernard Arnault, France’s richest man, isn’t disclosing the details of LVMH Moet Hennessy Louis Vuitton SE’s deal to carve up the second-biggest diamond ever recorded in the history books.On Thursday, Lucara Diamond Corp. said it had entered into a collaboration with LVMH that will see the 1,758-carat Sewelo diamond, which is roughly the size of a tennis ball, turned into Louis Vuitton jewelry. The stone’s name means “rare find.” LVMH is probably one of the few luxury groups that could pull off such a coup.But this is no vanity project. It comes hard on the heels of LVMH’s close to $16 billion purchase of Tiffany & Co., the go-to destination for engagement rings wrapped in that iconic little blue box. If that indicated the French company’s intent in jewelry, this leaves no doubt.It’s not yet clear how exactly the rough diamond will be used. Louis Vuitton has been expanding in fine jewelry, and with its Maison Vendome flagship store has a dedicated space for the category with its own entrance on the Place Vendome, the epicenter of Paris jewelry retailing. The group’s other jewelry houses include Bulgari, Fred, Chaumet, and the soon-to-be-added Tiffany. Christian Dior, meanwhile, has the potential to sell lots of pricey adornments to its fashionista fans.However it eventually polishes up, the Sewelo will be part of the classic luxury playbook. LVMH will likely create several extremely high-end pieces to establish a sense of exclusivity. While only a small number of customers may be wealthy enough to purchase these, many more will be able snap up Tiffany bangles or Louis Vuitton rings. LVMH is counting on the stone to encourage these purchases, too. It’s the diamond-encrusted equivalent of sending extravagant creations down the catwalk to sell trunk loads of Louis Vuitton’s popular Neverfull bags, which sell for about 1,000 pounds ($1,307).Even taking this strategy into account, it’s likely that LVMH will seek to take Tiffany upmarket. There’s scope to increase its margins by jettisoning lower-price products and selling more high-end pieces. The allure of the Sewelo will help in this process, too.The luxury jewelry market is growing strongly, with particular demand for items boasting a designer label. Bain & Co. estimates that excluding currency fluctuations, sales rose 9% in 2019, in contrast to watches, where sales fell 2%. Timepieces have been hurt not only by the unrest in Hong Kong but by the segment’s continued disruption by smart and connected watches. Jewelry faces no such technological shifts. So there’s plenty of room for LVMH to expand.A more muscular rival is a worry for companies including Richemont, which owns Van Cleef & Arpels and Cartier, as well as Swatch Group AG, which owns Harry Winston. It could also make it harder for LVMH’s French archrival Kering SA, which also has scope to sell more jewels, to do so. Luca Solca, analyst at Bernstein, has suggested that a merger between Richemont and Kering would be a formidable response.LVMH’s Sewelo gem gambit is not without some potential pitfalls. At the moment it is a rough stone, whose outer surface is still covered in a layer of carbon. It’s not yet clear what kind or quality of polished gem it will reveal. Lucara Diamond previously said it may not deliver the highest standard.Whatever emerges, the stone’s size alone will make for an interesting story for LVMH’s marketing team. And with the group being at the cutting edge of fashion, it may be bolder and more creative than a diamond dealer, whose primary concern is usually how many carats can be secured in order to maximize the sale price. Add in the halo effect around the jewelry maisons — the Sewelo will be shown to clients and press at the Paris couture shows next week before embarking on a world tour — and there’s even less of a risk.So even if the Sewelo doesn’t turn out to be as much of a sparkler as hoped, it will still help LVMH sell plenty of other baubles.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Christian Dior presented a wardrobe fit for glamorous eco-warriors in Paris on Tuesday, as models showed off looks dotted in wild flowers on a catwalk lined with trees set to be replanted around the city. Dior, part of luxury group LVMH, is one of the first major French brands to kick off Paris Fashion Week, with the likes of Kering's Saint Laurent and independent Chanel also set to showcase looks for next spring and summer. Hot on the heels of runway shows in New York, London and Milan, where some labels as well as organisers sought to address consumer concerns over the industry's green credentials, Paris is also looking to improve its environmental record.