Luxury goods investment has become a popular topic among those looking for a way to turn the tables and make the wealthy work for them. Companies like LVMH and Kering have built a reputation for creating exclusive brands that command high prices. If you’re interested in investing in these companies, it’s important to understand the major brands they own and analyze their earnings reports to see how a 5-year investment might have looked like. In this post, we’ll explore the statistics with stock prices, the significance of these companies, and everything you need to know before investing in luxury goods.
LVMH and Kering: Major Companies and Their Importance
Luxury items have become a symbol of status and success, especially among millennials and Gen Z. With the rise of social media and influencers, the desire for luxury goods has only intensified. Companies like LVMH and Kering have played a significant role in shaping the luxury industry and the perception of luxury among younger generations.
LVMH and Kering are two of the biggest names in the luxury industry. They own several luxury brands, including Louis Vuitton, Gucci, Dior, and Saint Laurent. These brands are often associated with high prices, exclusivity, and quality. For many, owning a luxury item from these brands is a symbol of success and accomplishment.
Statistics and Analysis of Earnings Reports
LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury goods group, recorded revenue of €79.2 billion in 2022 and profit from recurring operations of €21.1 billion, both up 23%. All business groups achieved significant organic revenue growth over the year. Fashion & Leather Goods notably reached record levels, with organic revenue growth of 20%.
Kering, on the other hand, owns several luxury brands, including Gucci, Yves Saint Laurent, and Bottega Veneta. The group revenue exceeded €20 billion in 2022, an increase of 15% as reported and 9% on a comparable basis. Also, all Group activities contributed to the 11% rise in recurring operating income, which reached €5.6 billion.
Kering Stock Value and PE
Kering’s stock value is currently at 571.80 Euro. The company’s price-to-earnings (PE) ratio is 19.52, which means that investors are willing to pay 19.52 times the company’s earnings per share (EPS). This is a reasonable valuation compared to other luxury goods companies in the market. Kering’s five-year growth rate is 20%, which shows that the company has been consistently growing over the years.
LVMH Stock Value and PE
LVMH is the world’s leading luxury goods company, and its stock is currently valued at 875.40 Euro. The company’s PE ratio is 31.23, which is higher than Kering’s but still reasonable for a company with such a strong track record of growth. LVMH’s five-year growth rate is an impressive 207.81%, which shows that the company has been outperforming the market over the years.
Impact of LVMH and Kering on Today’s Generation
As we’ve discussed earlier, LVMH and Kering are two of the biggest names in the luxury industry.
These companies have also been at the forefront of sustainability efforts in the luxury industry. LVMH, for example, has launched a program called “Life 360” that aims to reduce the environmental impact of its products. Similarly, Kering has set several sustainability targets, including reducing its carbon footprint by 50% by 2025.
Moreover, both LVMH and Kering have recognized the importance of diversity and inclusion in the luxury industry. LVMH has launched several initiatives to promote diversity, including its “EllesVMH” program, which aims to support and empower women within the company. Kering has also set several targets to increase diversity and inclusion, including increasing the number of women in leadership positions by 50% by 2025.
Make the Rich “Work” for You
While luxury items are unattainable for many, their sales are driven by the wealthiest 1% or 0.1% of the population.
Investing in luxury brands may present a profitable chance for average investors. This is because it capitalizes on the spending patterns of the extremely rich. Owning shares in companies like LVMH and Kering allows you to benefit from their opulence. With this investment, the rich effectively work for you. Even if you cannot purchase their high-end products, you can still profit.