Lvmh : Prada, LVMH, Hermès… Ces groupes de luxe qui s’en sortent le mieux en Bourse

Lvmh : Prada, LVMH, Hermès... Ces groupes de luxe qui s'en sortent le mieux en Bourse

(BFM Bourse) – LVMH, Kering, Hermès or Moncler, the European luxury giants announced this week exceptional half-year results marked by an increase in sales and profits of between 20 and 30%. Despite price increases, demand for luxury goods remains intact, and its loyal clientele is unaffected by inflation and the deteriorating economic environment.

The large luxury groups continue their rise, offsetting the slowdown in sales in China with increases in Europe and the United States, in a sector where they have been able to raise prices without losing customers, impervious to the uncertain global economic situation.

LVMH, Kering, Hermès, L’Oréal, Prada, Moncler: luxury groups this week announced exceptional half-year results, with global sales up 20-30% and profits along the same lines. “The demand is there,” explains Arnaud Cadart, portfolio manager at Flornoy, to AFP.

Greater growth for the saddler Hermès

The luxury group Hermès announced on Friday a profit of 1,640 million euros in the first half, 39.7% more year-on-year thanks to the increase in sales in all regions. Sales of the manufacturer of leather goods for saddlers amounted to 5,475 million euros, 29% more than in the first half of 2021, according to a press release. The current operating margin is 42.1%, “the highest historical level,” according to group director Axel Dumas.

For its part, Kering celebrated on Thursday a “very good performance” in the first half, recording a net profit of almost two billion, 34% more in a year, thanks to sales increases in Europe and the United States, offsetting the slowdown in Porcelain. The sales of the group led by François-Henri Pinault totaled between January and June 9,930 million euros, 23% more in one year. Kering’s current operating profit was 2.82 billion and its current operating margin was 28.4% (vs. 27.8% in 2021).

The number one luxury, LVMH, for its part, posted a profit of 6.5 billion in the first half, a jump of 23% in one year. The results go up even more compared to the same period of 2021, whose performance had already been described as “record” by the group.

Sales of Bernard Arnault’s group, the first French fortune according to the magazine challenges and second in the world according to Forbes, it stood between January and June at 36,700 million euros (+28%). The group with “75 houses” is led by its flagship division, Fashion and Leather Goods, which alone generates €18 billion in sales (+31%). Although the group does not detail the financial performance of its brands, it assures that “Louis Vuitton, Christian Dior, Fendi, Celine, Loro Piana and Loewe are gaining market share everywhere and reaching record levels of profitability.”

A luxury clientele less sensitive to inflation

Contrary to the large distribution, the luxury clientele is made up of aged people, “the CSP+”, of the categories “plus aged who are more sensitive to inflation, at the risk of recession and at the slowdown of the march of labor” , according to him.

Geographically, “all markets are up, except for China, which is down a bit,” according to the analyst. What the groups confirm: Luxury saw sales rise in the US, Japan and Europe, offsetting a slower pace in China due to lockdowns to fight Covid-19 in the second quarter.

Prada’s sales soared 89% in Europe and Moncler’s 42% thanks to the return of tourists, especially Americans who benefit from a strong dollar against the euro.

“In Europe, we now have a quadrupling of sales to Americans compared to last year and we are up from 2019,” confirmed Jean-Marc Duplaix, chief financial officer of Kering (Gucci, Yves Saint Laurent, Balenciaga…) during a conference. he call with reporters.

The rise in the value of the dollar against the euro is a boon for the luxury industry, which produces mainly in Europe (in euros), particularly France and Italy, but sells worldwide (in dollars).

“Small adjustments” in prices

“We estimate that, on average, the euro zone represents (only) around 15% of the total turnover of European luxury companies,” estimates an HSBC note in mid-July. The sector thus benefits from “strong foreign exchange support thanks to the depreciation of the euro”.

The world number one in luxury LVMH saw its turnover take off 28% in the first half compared to the same period in 2021, thus exceeding 36.7 billion euros in the period from January to June. A quarter of this increase is due to the currency effect, according to the group. Given the increase in the cost of raw materials and transport, the sector can also afford to raise its prices.

“At the moment, customers are insensitive to this increase. Sales in France increased by 41%, a record”, underlines Pierre Michaud, manager of Monocle, referring to the situation of the Hermès group’s customers.

At LVMH, which owns Louis Vuitton, Dior, Tiffany, among others, “most brands have increased their prices (…) between 3% and 7%,” explained CFO Jean-Jacques Guiony, ” especially in the first trimester. . “When there’s a recession, we adjust and adapt,” he explains.

cost increase

Along the same lines, Hermès made a “small adjustment, between 3 and 5%” “in jewelry and watches” to take into account “the very strong increase in the price of gold and certain metals,” explained the manager Axel Dumas. during a conference call with journalists. Pierre Michaud, from Monocle, tells AFP that in leather goods “the increase in prices far outweighs the increase in costs.”

Despite an uncertain global economic future, major luxury groups say they are confident. Kering even announced in June that he wanted to double his sales of Yves Saint Laurent in the medium term to 5 billion euros a year and multiply by 1.5 those of his flagship brand Gucci to 15 billion euros.

At the same time, Ferrari indicates that there will be a lot of affairs worth 6.7 million euros in 2026, which will constitute a 40% environmental bond for reporting aux recettes that will pay 4.8 million euros for attendees this year.

Prada tops the bag

Despite these good results and the rallies in recent days, luxury groups have suffered on the stock market since the beginning of the year, although Prada is doing in the best way.

Here is the performance of the leading publicly traded luxury groups since January:

  • -Prada: -6.1%
  • – LVMH: -7.7%
  • – Hermes: -13.5%
  • – L’Oreal: -13.6%
  • -Richemont: -16.9%
  • -Kering: -21.3%
  • -Moncler: -24.3%

(with AFP)

SS – ©2022 BFM Bourse

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