In the circulation of time, LVMH's revenue is like a long water flow, and the growth rate is no longer reunited. The analysts who insight into market changes have predicted that the severe winter of the luxury industry may be quiet.
In the past, many market observers put full confidence to the LVMH stocks, and they were like a "buy" rating like stars, including their firm belief in the company's long -term prosperity in the field of luxury consumption.
However, although the elites of Wall Street still regarded LVMH as a seductive investment treasure, the dawn in early 2024 revealed a more difficult challenge than expected.The global desire for luxury goods began to retreat like a tide, which undoubtedly covered LVMH's prospects.Nevertheless, with its rich product line, LVMH is still expected to move forward in countercurrents to surpass competitors who lack diversity.
The wind direction of the market seems to be changing.For the future income of LVMH, market forecasting has become more conservative, and analysts have adjusted the target price and rating of the company.Today, most market observer focuses on the goal of $ 146 per share, and the LVMH stock rating is carefully lowered to "hold".
For those investors in the stock market, LVMH's stocks have performed like a complex scroll since this year.Although its gain lags behind the gorgeous curve of the broader market, it stands out among many colleagues in the field of luxury consumption.Since the beginning of the year, LVMH's stock price has steadily raised about 7%, while the Standard 500 Index has risen by about 20%.In contrast, Kering's stock price fell nearly 14%.
This may be a portrayal of the next step in the luxury industry.Because the leader has appeared in this trend, for the development prospects of the entire industry, it is inevitable that a layer of haze that cannot be seen.
Settlement financial report
In the poetic time of Jinqiu October, LVMH, the world's largest luxury group, gently opened the third quarter of the financial report.In the third quarter of this year, the sales of the LVMH Group were like dew in the morning light, which increased by 9%organically to the gorgeous height of 19.964 billion euros.EssenceAt the same time, this autumn has also become the most humble season for revenue since this year. Compared with the 17%organic growth of 17%in the previous two quarters, the growth rate of this quarter is only half of them.
LVMH, this name has long been closely linked to the double -digit revenue growth in a single quarter, as if it is a bright star, shining in the night sky of the business world.However, time has passed, and the growth rate of the third quarter of this year has fallen to individual digits, which seems to be telling a self -evident story -global consumers' enthusiastic pursuit of high -end products is quietly retreating, especially in the bustling United States.And the European market.
This delicate change has also stirred ripples in the financial market. LVMH's stock price has slowly dropped to a new low in 2023.And the lens of time is longer, we will find that in the past six months, the stock price of LVMH Group has gone through about 20%of the wind and rain.
As the world's leading luxury group, LVMH is also a "barometer" of the luxury industry to a certain extent.As of now, LVMH Group has gathered 75 well -known brands, with a total revenue of 79.2 billion euros in 2022 and more than 5,600 stores worldwide in retail networks.These numbers not only show the strength and influence of LVMH, but also make us look forward to its future performance.
Judging from the third quarter financial statements released by the LVMH Group, in addition to the strong growth momentum of the boutique retail sector where Sither is located, other well -known leather goods luggage sectors, or the attractive watch in the past two years,The growth rate of & jewelry business has slowed down from the same period last year.Specifically, the growth rate of LVMH wines and spirits business revenue, from 3%in the first quarter to -14%in the third quarter, a drop of decrease far exceeding expectations.
According to the proportion of revenue share, LVMH's maximum revenue sources are still the fashion leather goods department where Louis Vuitton, Dior (Dior), Celine, etc. are located.In the first nine months of this year, the LVMH Group's "Fashion & Leather Goods" sector achieved revenue revenue of 30.912 billion euros.However, in the third quarter of this year, the organic revenue of the sector increased by 9%, and the growth rate was less than 11.2%expected by analysts, which was far lower than the revenue growth rate of the business in the first half of this year.
However, there is also a bright color in this autumn, that is, the largest revenue increase in the third quarter is the fine retail business, including Sephora.In the first nine months of 2023, LVMH Group's retail business revenue increased by 26%, with a total revenue of 12.431 billion euros.Among them, the first quarter increased by 28%.The Group said that thanks to the brand, including Sephora, it continued to obtain market share. The development momentum in North America, Europe and the Middle East is particularly strong, and the distribution network continues to expand.
The truth in the data
The third quarterly report shows that the growth rate of LVMH's revenue from June to September has slowed significantly, from 17%in the second quarter to 9%year -on -year in the third quarter.As expected, the company's main growth resistance comes from Asia, and the growth rate of this region decreases from 34%to 11%.
The European market slowed from 22%in the first half of the year to 7%, reflecting the erosion of inflation's demand for local consumers.HSBC analysts also said last month that European luxury expenditure was only restored to 41%of the level of August 2019, because the limit of flight transportation and visa restrictions limited the number of tourists and exacerbated local disadvantages.
It is worth noting that LVMH's revenue performance is much lower than the general expected market expectations.According to Refinitiv's data, the company's revenue was nearly 700 million US dollars.
Considering the slowdown in the third quarter, LVMH failed to depict a key prominent and encouraging prospect in the fourth quarter holiday season.This is definitely not conducive to investor confidence in the stock.More specifically, in the context of the decline in the demand for luxury goods, the analyst's forecast is that by 2024, the total sales of luxury goods will increase by about 5%year-on-year, which is about 1%-2%lower than the expected expectations released in the third quarter of large banks.Essence
This kind of careful prediction, based on such a kind of concern, that is, macroeconomic challenges may greatly limit the growth of luxury demand.Sales in 2024 and 2023 may be flat.At the same time, many analysts doubt whether LVMH is capable of using pricing as a means to achieve growth.
What is most concerned about investors at present is the Asian market with uncertainty.At the telephone meeting for the third quarterly report, more than half of the investment bank representatives including Morgan Stanley, Goldman Sachs, Citi, HSBC, and Barclays asked Guiony the Chinese market.Whether it is consumer confidence, restarted shopping overseas, or Hainan's 2025 tax exemption policy.The reason is that the revenue growth of these European luxury groups depends on this Asian market dominated by China.
In the past few years, LVMH's Asian market revenue has increased from 26%in 2016 to more than 34%in 2023.Asia (except Japan) and the US market revenue have declined slightly, but the proportion of the two is still exceeded half of the annual revenue of the entire group.
In addition, analysts are also worried about consumption.Indexs such as PMI and consumer confidence show that Europe and the United States may decline in early 2024.This will definitely have a significant adverse effect on global luxury demand.
With the slowdown of the global economy, consumers' desire for bright high -end goods also retreats like a tide, especially in the Chinese market that was once in the middle of the day.
The third quarter of the 2023 financial report released by LVMH Group shows that the group's operating income increased by only 1%year -on -year; Kaiyun Group's financial report this year is also like the moonlight sprinkled on the lake.Falling leaves fell 13%.According to Bloomberg, since April this year, the market value of the seven major luxury companies in Europe has evaporated about $ 245 billion (about 1.75 trillion yuan) like a dream bubble.
For a long time, the Asian market in China has always been LVMH's largest source of income like spring water.In the financial report, the LVMH Group stated that the total sales of the Asian market accounted for more than 30 %.However, the differences in luxury pricing in China and Europe, such as the melody on the strings, have long played different movements.Taking Europe as the stage, the price difference between the luxury goods in China and Europe passed the night sky like a meteor, reaching 25%-45%.Among them, the price differences between entry -level luxury goods are more obvious than expensive luxury goods like pearls.
Taking LV's NEVERFULL handbag as an example, the price is nearly 30%in China and France.In order to reconcile global product prices and reduce differences, luxury brands adjust their prices on a regular basis, which has become a well -known dance step.
The high pricing stack continues multiple rounds of price increases, such as the drizzle gently stroking the earth, which affects the brand's performance growth to a certain extent.However, Bain's previously released luxury market research report shows that the high net worth customers with a head of heads of 2%have been as bright as stars and contributed about 40%of luxury sales.In contrast, entry -level luxury consumers feel more deeply in the melody of economic slowdown.
In the past three years, the price increase of luxury brand prices is endless, mainly because of the scenery in the painting, no longer the same.Compared with other goods with increased price and sales and main products, the main products are mainly profit -making, the higher the price of the luxury industry -the higher the price of the product, the more it attracts consumers like a magnet and becomes a treasure in their hearts.
However, too frequent prices make the price of luxury goods like a rocket that breaks through the sky, causing the marveling of fashion media: the price of luxury goods has reached the ceiling.Challenge.
After the epidemic, consumers became as clear and calm as autumn water.While they are more inclined to buy luxury goods with investment value and high circulation rate, they start to return to offline consumption and enjoy a real shopping experience.
According to the fashion self -media Ladymax report in December this year, Saks Fifth Avenue Department Store investigated a whisper in the wind, showing that 75%of the respondents said that they would wait for the luxury of luxury goods to be discounted before buying.In sharp contrast.At the same time, because luxury brands will not be easily discounted in order to maintain scarcity, Marc Metrick, CEO of the department store's online business, predicts that during the forthcoming holiday discount season, the company's business will not be as strong as in the past three years.
When the poem in autumn was not ended, the day before the third quarter financial report was released, the melody of the financial world seemed to have changed subtle changes.Morgan Stanley lowered the expected key of 6%of the income of luxury goods in 2024, while Bank of America would reduce the expectations by 7%.At this moment, StoxX European luxury 10 index including LVMH, Kaiyun, Richelon, and Hermes, such as fallen leaves in autumn winds, set the biggest decline since 2020.
Time flowed down to 5 years ago, Arnold also joked in the crowd and talked about LVMH's stocks too expensive, and even he felt that repurchase was a luxury idea.However, three days after the Q2 financial report on July 25 this year, he was like a poet blowing by the autumn wind, and bought 215 million euros of LVMH stocks through its Financiere Agache and Christian Dior SE.At present, Alino and their families have about 48%of LVMH, and have nearly 64%of the voting rights.
In this fall, the story of LVMH is like interweaving the melody and poem, which has both the ups and downs of the financial community and the power of family inheritance.
On the other hand, when "price increases" are no longer the best answer to the problem, luxury brands also need to find new problem solving ideas like explorers.Continue to move forward during the unknown market journey.
[Analysts are well -known investors and senior analysts in Wall Street..