LVMH Moet Hennessy Louis Vuitton, the renowned French luxury conglomerate, is scheduled to release its 2023 financial results on Thursday. Here’s what you need to know:
Sales Forecast
According to a poll of analysts’ estimates compiled by FactSet, LVMH is expected to report sales of €85.83 billion ($93.16 billion) for the entire year. This reflects an increase from the €79.18 billion in sales recorded in 2022.
Profit Forecast
The company is also anticipated to announce a net profit of €15.72 billion, as provided by the FactSet consensus. This marked improvement compares to the €14.08 billion net profit reported in the previous year.
Market Performance and Investor Sentiment
Investor attention has been drawn to the luxury industry’s slowing sales growth, which has had an impact on LVMH’s stock performance over the last six months. During this period, the company’s shares dipped by nearly 22% and lost their status as Europe’s most valuable listed company to Novo Nordisk—a Danish pharmaceutical giant specializing in obesity medications like Wegovy and Ozempic.
Key Considerations
As LVMH unveils its financial results, industry observers will be paying close attention to factors influencing sales growth and profitability trends. With the luxury market facing challenges, discerning stakeholders will be keen to assess LVMH’s strategies and performance in navigating this landscape.
Outlook for 2024
According to Deutsche Bank analysts Matt Garland and Shwetha Ramachandran, the commentary on expectations for 2024 will be crucial for investors. They mentioned that both LVMH and the luxury sector are expected to experience a significant growth in the second half of the year. However, until there is clear visibility of improving demand, sentiment is likely to remain cautious.
High-end Customers
Deutsche Bank analysts noted that the demand for luxury goods is slowing down as anticipated. Nevertheless, the sector’s growth has been supported by affluent customers with higher spending power. Richemont and Brunello Cucinelli’s impressive results have further raised expectations regarding the resilience of higher-end luxury demand, particularly for differentiated and heritage brands.
Fashion and Leather Goods: Investigating Demand Divergences
Investors are set to closely examine variations in demand within different categories and brands, particularly within the Fashion & Leather Goods division of the company. This division houses esteemed brands such as Louis Vuitton and Dior, which are highly influential in the fashion industry.
Consensus estimates provided by Visible Alpha indicate that the key business of the group is anticipated to reach a noteworthy EUR42.35 billion. It is worth noting that Richemont’s recent favorable results for its core jewelry division may have raised investors’ expectations for the fourth quarter. These positive results from the Swiss company have certainly captured the attention of Deutsche Bank analysts, prompting further anticipation for encouraging outcomes in the coming period.
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