The CEO of Europe's most valuable company is currently the world's richest man, Bernard Arnault. According to analyst Gilles Guibout, the success of the company's strong growth this year is based on the increasing number of wealthy people around the world. This makes LVMH one of the favourite brands not only for investors but also for consumers with large fortunes. The company's best-selling products include Louis Vitton, focusing mainly on clothing and fashion accessories, Dior perfumes, Hennesy cognac and, from the end of 2021, Tiffany jewelry, which has forged a partnership with Nike, for example.
The stock's growth was mainly driven by the Asian market, with the exception of Japan. The performance in the US market was weaker for the company, especially from younger customers; in the US, sales grew by 8%, but this is still a positive. Increased consumer expenditure was to blame, as most of these sales came from the Sephora chain of cosmetics stores, a less exclusive sector for LVMH. The previous strong results came mainly from Americans' appetite to spend savings after the pandemic restrictions ended. China is estimated to be the main accelerator in the stock's growth in 2023 [1].
Since the beginning of the year, the stock is up 27%, helped mainly by the weakening of the dollar against the euro, which has helped the company's total market capitalization climb to $486 billion.* If it were to cross the $500 billion mark, it would become the first European company to do so. With the current uptrend, it could work, and LVMH stock would be a little green jewel for investors' portfolios.
LVMH's share performance over the last five years (Source: Google)
* Past performance is no guarantee of future results.
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.
