To The Moon

Luxury goods giant $LVMH-Moet Hennessy Louis Vuitton(LVMUY)$ is the first European company to surpass $500 billion in market value. Shares of LVMH have risen more than 20% since 2023.

The family of LVMH's president is the latest to be crowned the richest in the world by Forbes. In recent years, luxury giants represented by LVMH, Kering, and Hermes International have seen high revenue growth, with the Asian market becoming a major consumer.

Strong growth in luxury goods

The parent company’s brands include Louis Vuitton, Moet & Chandon, Hennessy, Givenchy, Bulgari, and Sephora. And its 17% rise in first-quarter sales more than doubled analyst estimates. That, plus a profit from recurring operations of 21.1 billion euros, marked its second consecutive year of record results.

LVMH announced key financial figures for the first quarter of 2023, with sales revenues up 17% year-on-year to €21,035 million, thanks to strong growth in China. All divisions except Wines & Spirits achieved double-digit organic growth.

Regionally, sales in Asia excluding Japan grew 14% YoY in the first quarter, with revenue up 37% YoY, the largest increase of any region. Sales in Japan increased 34% YoY and revenue increased 7% YoY. Sales in the U.S. grew 8% YoY and revenue grew 23% YoY. Revenue in Europe, excluding France, grew 14% YoY, and revenue in France grew 7%.

As for the driver? Higher-income consumers continue to spend despite uncertainty in the economy. Additionally, reopening fueled a rebound in travel by high-end spenders.

LV CEO tops the world's richest person

The results send $LVMUY shares to fresh all-time highs, further boosting CEO Bernard Arnault’s net worth (currently the world’s richest person).

As of today, LVMH ranks 13th in the world in terms of market capitalization, right behind $Exxon Mobil(XOM)$, $Visa(V)$ and $Tesla Motors(TSLA)$.

The three giants of luxury goods are growing strongly

In recent years, the earning power of luxury industry cannot be underestimated. The revenue of $LVMH-Moet Hennessy Louis Vuitton(LVMUY)$ $KERING SA(0IIH.UK)$ $Hermes International SA(HESAY)$ has been growing.

• The Kering Group whose brands include Gucci, Baudrillard, Saint Laurent, Boucheron etc generated sales of €20.351 billion in 2022, up 15% year-on-year; net profit increased 14% year-on-year to €3.614 billion.

• In 2022, Hermes revenue broke 10 billion euros for the first time, reaching 11.602 billion euros, up 23% year-on-year at fixed exchange rates; operating profit of 4.697 billion euros, with an operating margin of 40.5%, reaching the highest level in history.

  Net profit of 3.367 billion euros, up 38% year-on-year, with a net profit margin of 29%, the highest level in 10 years.

What do you think LVMH's market value is about to catch up with Tesla?

Which one are you bullish on?