Strong demand for fashion, jewelry, and perfume has brought luxury goods manufacturer LVMH another record year in 2023. Despite a more difficult economic time, wealthy people continued to eagerly purchase handbags from Louis Vuitton, fragrances from Christian Dior, and jewelry from Tiffany.

Demand is normalizing The demand boom from the post-Covid-19 period is over, but business is now normalizing. While sales in the first half of the year increased by 17% on a currency-adjusted basis, the recent rise was only just under 10%. The business development was driven by the largest division of the group, the fashion and leather goods business. This includes brands such as Louis Vuitton, Christian Dior, Kenzo, Givenchy, and luggage manufacturer Rimowa. The division’s revenue increased by 14% on a currency-adjusted basis to more than €42 billion, which is almost half of the group’s total revenue.

Revenue increased by 9% in 2023 In the past year, LVMH increased its revenue by 9% compared to 2022 to more than €86 billion. If currency rates had remained stable, the growth would have been 13%, as the luxury group announced in Paris on the evening of January 25, 2024. With the exception of the wine and spirits business, all divisions saw an increase in revenue and operating profit. Net profit grew by 8% to €15.2 billion. Analysts had expected a smaller increase in revenue, but had expected a slightly higher annual profit. Shareholders will now receive a dividend of €13 per share, one euro more than a year ago.

End of travel restrictions boosts sales The end of the pandemic and travel restrictions particularly benefited the retail division. As people start traveling again and shop at airports, the segment’s revenue increased by a quarter to €17.9 billion on a currency-adjusted basis. Even for 2024, CEO Bernard Arnault expects overall growth – despite or perhaps because of the economic and political uncertainties in the world.

LVMH Moët Hennessy Louis Vuitton ISIN: FR0000121014

Source: https://www.aktienscreener.com

Evaluation and technical chart analysis Based on earnings estimates, LVMH’s stock has a price-earnings ratio of 24 in 2024. The dividend yield is 1.8%. The stock of the luxury goods group is currently trying to regain the blue 40-week line. The stock has almost 20% room to reach its all-time high from last year at €904.60.

Conclusion LVMH’s stock is not pure luxury, but it is also not cheaply valued. In the long term, the stock of the industry leader should continue to rise despite all crisis situations.