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Next week I am heading to Paris to spend two weeks visiting LVMH retail locations in Paris, and each of the Palace Hotels, as well as the vineyards of Burgundy.
In the case of LVMH, the company controls one of the world’s best portfolios of luxury clothing, Champagne and liquors. It is virtually unrivaled.
The very best just never goes out of style.
Reports the Wall Street Journal:
Investors seem to be looking for any excuse to sell luxury stocks just now.
This week it was slightly underwhelming third-quarter sales numbers from luxury conglomerate LVMH LVMUY -9.07% Moët Hennessy Louis Vuitton, posted after the Paris stock market closed Tuesday.
LVMH stock is down 13% this month after an 8% fall Wednesday. Shares in Kering, the holding company for Gucci, Yves Saint-Laurent and Balenciaga, are down 17%
The latest selloff is hard to understand on the face of it. LVMH’s third-quarter sales were 10% higher than in the same quarter last year, excluding currencies and acquisitions.
Most companies would give a lot for this kind of growth. Moreover, sales growth accelerated to 14%, from 13% in the second quarter, in the higher-margin fashion and leather-goods division that includes the Louis Vuitton brand.
The inclusion for the first time of Christian Dior , which the company acquired in July last year, may have helped here.
The luxury sector is cyclical, so investors do well to buy when companies are gloomy. They just aren’t gloomy enough yet.
The news flow at LVMH will likely get worse before it gets better.
Read more here.
Dick Young
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