From Morningstar:

LVMH, the world’s largest luxury group, is expected to comment on the state of the luxury market in Europe, the US, and China. The company’s third-quarter sales figures showed a 14% organic revenue growth and a strategy focused on enhancing the desirability of its brands. Expectations for 2024 remain consistent with the previous year.

After a strong first half, LVMH saw a deceleration in revenue growth in the third quarter. Analysts expect a 8.6% organic revenue growth in Q4, with fashion and leather goods, including Louis Vuitton and Christian Dior, leading the way.

LVMH’s full-year sales are projected to reach €85.74 billion, with an operating profit of €22.49 billion and a net income of €15.70 billion. Morningstar analyst Jelena Sokolova has upgraded the Fair Value Estimate for LVMH to €670 per share.

The luxury market is experiencing a slowdown, with more cautious consumers impacting growth. LVMH’s focus on pricing and marketing investments could help protect margins. Despite easier comparison bases in China, analysts do not expect growth to reaccelerate in the near future.

LVMH’s wide economic moat is supported by a portfolio of leading brands with strong brand recognition and market share. The Louis Vuitton brand is a key driver of revenue, supported by iconic bags and accessories. LVMH also has a strong presence in watches, jewelry, perfumes, cosmetics, and wines and spirits.

Louis Vuitton has seen spectacular growth, but the luxury goods industry remains vulnerable to future demand in emerging markets. Decelerating demand in Europe and the US, as well as the risk of overpaying for acquisitions, pose potential challenges for LVMH.

Overall, the luxury market is experiencing a slowdown, with caution from consumers impacting growth. LVMH’s performance in the fourth quarter and its strategy to maintain strong brand recognition and pricing power will be closely watched.



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