I'm convinced in the long term - you don't rebuild brands in a few years and luxury will always work in my view. How do you see it?

Since the beginning of the year, analysts have lowered their profit estimates for the 50 largest listed companies in Europe by almost four percent. This is according to data from the financial specialist Bloomberg.

One of the main reasons for this is the tariffs imposed by US President Donald Trump Trump and the associated uncertainty. Tariffs make products more expensive, making them less affordable for end customers. In addition, the recent euro exchange rate against the dollar is affecting companies. This makes products sold in the dollar zone more expensive and less competitive. In addition, turnover and profits are reduced as soon as companies convert their dollar earnings into euros and report them on their balance sheets.

But there are exceptions. For five companies in the European Stoxx 50 share index, analysts have increased their profit forecasts for the current financial year by at least five percent since the beginning of the year. by at least five percent - for one group by as much as 15 percent.

Handelsblatt profiles the shares of these companies with a view to their business prospects, their stock market valuation and their share price potential.

The candidates are:

$PRX (+1,17%) - Prosus | 20 analysts per buy / 4 hold

$CFR (-2,22%) - Richemont | 17 buy / 16 hold / 1 sell

$NOVN (-0,08%) - Novartis | 9 buy / 15 hold / 5 sell

$SAP (-0,88%) - SAP | 25 buy / 6 hold / 3 sell

$IBE (+0,19%) - Iberdrola | 12 buy / 19 hold / 2 sell

The detailed analysis is available here (€):

https://hbapp.handelsblatt.com/cmsid/100124777.html

Source: Handelsblatt, 09.05.25

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00:00:00 Weekend trading stocks

00:03:40 Market environment

00:16:00 Delta Air Lines

00:20:00 LVMH, Grok AI

00:43:30 Hermès, Richemont, Kering

01:03:20 TSMC, ASML

01:26:50 Coalition agreement

Spotify

https://open.spotify.com/episode/36OedAqU7ZcTYd3PpnHRFQ?si=99nQieH0Qh6Hy1QhQ5hQzA

YouTube

https://youtu.be/QMjS235So6I

Apple Podcast

https://podcasts.apple.com/us/podcast/85-lvmh-herm%C3%A8s-tsmc-koalitionsvertrag-gratis-aktienanalysen/id1695869891?i=1000703930602

$MC (-0,72%)
$RMS (-1,31%)
$KER (+2,1%)
$DAL (-0,36%)
$2330
$ASML (-2,06%)
$GOOG (+0,36%)
$GOOGL (+0,48%)
$SPOT (-4,07%)
$AAPL (+0,13%)
$CFR (-2,22%)

Not a good day for LVMH $MC (-0,72%).

The champagne has been left in the fridge again (didn't expect to get it out either)

LVMH currently 5th largest position in my portfolio, according to the getquin Deepdive -> 3.8% portfolio share.

-40% from the all-time high and the benchmarks don't look good. I'm convinced in the long term and want to hold the position, but I'm still wondering whether it wouldn't make more sense to reallocate and enter later. Should I stay in the luxury sector or is the alternative a basic investment? I don't need the money at the moment and am thinking of holding on to it.

I'll answer this question for myself at the end of the post.

For now, here is an overview of the figures and classification. Sources: Earnings call and report presentation

(I know, dozens of others have already posted today, perhaps the classification and explanation will provide more clarity).

Overall view: Solid, but the shine is fading slightly

Turnover20.31 billion €

• -2 % reported (= incl. currency & portfolio effects)

• -3% organic (= real business development, adjusted)

Explanation:

Weak euro at the beginning of the year lifted US sales, weak yen depressed Japan, but overall it was enough for a better reporting result. Summarized at the end of the post for those interested.

Regional trends:

• Europe: +2 %

• USA: -3 % (despite good fashion performance, beauty weak)

• Asia excl. Japan: -11 %

• Japan: -1 % (base effect after +32 % in the previous year)

Explanation:

The decline in Asia is partly due to a "base effect": 2024 was extremely strong (especially in Japan due to Chinese tourists). This strong basis for comparison makes 2025 look much weaker, although the absolute level remains high.

2nd segment analysis: strengths and weaknesses at a glance

Fashion & Leather Goods (cash cow)

Turnover10.10 billion € (-5% organic)

Highlights:

• Louis Vuitton with successful Murakami collaboration (premium prices, sold out)
• New collections, change of creative directors (e.g. Givenchy, Loewe, Celine)
• Focus on "mix" strategy: sale of more expensive items instead of price increases

Classification:

Mix = higher-quality product mix, e.g. selling more €4,000 bags instead of €1,500 bags -> more sales per item and supports the margin without using official price increases.

Wines & Spirits (problem child)

Turnover1.30 billion € (-9 % organic)

• Cognac declining sharply (-17%) in USA & China
• Turnaround plan over 2 years announced, no details given, but focus is probably on stabilization & new brand activation

Watches & Jewelry

Turnover2.48 bn € (0% organic, sales stable)

• Tiffany: strong demand (Tiffany T, Tiffany Lock, Tiffany Knot, new flagship stores)
• Bvlgari, Chaumet, Fred: new collections & solid growth

Perfumes & Cosmetics

Turnover2.17 billion € (-1% organic)

• Dior: success with J'adore & high-end series "La Collection Privée"
• Guerlain, Givenchy, Aqua di Parma: new fragrances & ambassadors

Selective Retailing (Sephora, DFS, Le Bon Marché)

Turnover4.18 billion € (-1 % organic)

• Sephora: further growth in stationary retail (Brick & Mortar)
• Weakness in e-commerce, Amazon aggressive with prices... is Amazon a competitor?
• .. Yes, Amazon is a direct competitor, especially in the online beauty business
• -> Amazon is putting Sephora under pressure with aggressive prices. LVMH does not want to go along with this in order to preserve the brand value.
• DFS (duty-free stores, i.e. luxury stores in airports / tourist centers): few tourists in Hong Kong / Macau = pressure, weak figures

3. challenges in the market environment

Geopolitics & economy

• -> "In the case of tariffs, price is a lever that we are going to consider."
• "It will not be one size fits all... it can be very different depending on the brands, categories, pricing power."
• -> LV has three production facilities in the U.S., but it's rather around one third of local needs."
• "There is still capacity... we are looking at that obviously. It's something we can contemplate in a reasonable timeframe."

Interpretation:

• LVMH is not planning across-the-board price increases, but is considering them on a brand-specific basis in case tariffs come.
• LVMH is examining whether it can produce more in the USA if necessary, e.g. to avoid possible tariffs - but no immediate relocation.

• Asia: Weak demand development, but structurally intact (long-term growth of the middle class)

Buyer behavior

• "Aspirational buyers" (status-oriented middle class buyers) show restraint

• -> Demand currently weaker due to sentiment, not due to income

• -> Early indicator for cyclical decline in the luxury market

4. LVMH strategy & positioning

+ Strengths:

• Market leader with a broad brand portfolio (LV, Dior, Tiffany, etc.)
• Long-term increase in value through consistent investment in brand, stores, creativity
• Strong innovative strength in products & cooperations

- Weaknesses / risks:

• Profit growth is slowing down
• Luxury market as a whole in a "normalization phase"

5. bottom line, stay invested or reallocate?

LVMH remains a giant that invests selectively in weak cycles instead of cutting back.

Those who take a long-term view will benefit from the structural brand value.

In the short term, the share has no clear price driver in an environment of high interest rates, geopolitical uncertainty and weakening demand in Asia and the USA.

My conclusion: (not investment advice, of course 👀)

>>> Hold position. <<<

______________

What can investors who want to get in on LVMH do?

Stay patient, buy in tranches if necessary

Why?

• The company remains fundamentally strong, but is currently facing challenges (tariffs, China weakness, US risk)
• The P/E ratio is below the 5-year average (~21 instead of 31 depending on the source) -> valuation is more attractive
• The market is already pricing in many uncertainties, but a real upward trigger is currently missing
• LVMH is qualitatively first-class in the long term, but dependent on the economy and geopolitics in the short term

Strategy tip:

Enter in partial tranches (e.g. x% now, x% on setbacks) + watch out for signals (e.g. stabilization in Asia, tariffs specified, Q2 sales trend)

What should investors who are currently in the red do?

Do not sell out of panic

Why?

• The operating basis is intact, LVMH is not cutting back but investing anti-cyclically
• The valuation is no longer excessive compared to recent years
• Luxury demand is cyclical, but structurally intact
• Declines in "aspirational buyers" are sentiment problems, not structural problems

What to do instead of selling?

• Consider adding to the position to improve the entry level (if there is still conviction)
• Or simply hold and wait for the next upward phase
• Alternatives: Possibly reallocate to Hermès $RMS (-1,31%) (premium exposure) in case of returnees or Richemont $CFR (-2,22%) (adequately valued, less US risk) if you want to stay in the luxury segment. Otherwise, for example, switch to Basis Investment.

______________

Exchange rate effect explains why -2 % instead of -3 %?

In the first quarter of 2025, LVMH reported organic sales growth of -3%, but the reported growth was only -2%. The difference is due to positive exchange rate effects, mainly from the US dollar.

At the beginning of the year, the euro was weak against the US dollar, which means

Sales in the USA (e.g. with Louis Vuitton or Sephora) were converted into euros at a more advantageous exchange rate -> this lifts reported sales.

At the same time, the Japanese yen was significantly weaker against the euro. Sales in Japan (e.g. with Dior or Bvlgari) bring in fewer euros when converted, although sales in yen have not changed → this has a negative effect.

Bottom line:

The positive effect from the weak euro against the dollar was stronger than the negative effect from the weak yen. This is why the reported growth of -2% is better than the operating loss of -3%.

______________

Thanks for reading! 🤝

______________

Sources:

Audio Webcast Q1 2025 Revenue:

https://voda.akamaized.net/lvmh/2083769_67e55782ce10a/

Presentation:

https://lvmh-com.cdn.prismic.io/lvmh-com/Z_0pc-vxEdbNPBim_LVMHQ12025.pdf

$CFR (-2,22%) currently has an important factor that clearly sets it apart from competitors such as LVMH and Hermes!

Not least for this reason and the attractive chart picture should make you sit up and take notice.

Click here for a brief analysis:

https://investment-traders.com/kurzanalysen/cie-financiere-richemont-aktie-jetzt-in-allerbester-kauflaune

The world's population is getting older and older, an irreversible demographic change with considerable economic consequences.

This article is intended to provide investment ideas and impetus. The stocks mentioned do not, of course, constitute investment advice, but merely serve as examples of potential beneficiaries of demographic change. Historical developments are no guarantee of future returns.

The main source is the short analysis "How to invest as the global population ages" by Goldman Sachs [1], which, however, does not name any specific stocks.

I have also added additional sources and charts.

__________

🌍 Demographic change: growth and ageing of the world's population

The world's population will grow to almost 10 billion people by 2050. But it is not just the number of people that is increasing, their age structure is also changing dramatically. [2]

Increase in the older population:

• The proportion of people aged 60 and over is rising from 8% (1950) to 21.5% (2050).
• In 2050, 2.1 billion people will belong to the over-60 age group.

Source: [2]

Regional differences:

Europe & North America have the oldest populations & remain the most affected demographically.

Latin America, the Caribbean & Asia: The proportion of over-60s will more than double between 2015 and 2050, reaching around 25 %.

Africa remains the youngest region: in 2015, there were 21 countries worldwide with a birth rate of 5 children per woman, 19 of which were in Africa. However, it should be noted that current statistics from 2024 show that the birth rate per woman in Africa was already just 4.07 in 2023 and could fall to 2.79 by 2050. [3]

While industrialized countries are struggling with an ageing society, Africa remains the most dynamic and youngest region in the world. This development can also have an economic impact and open up new investment opportunities. [2]

Goldman Sachs also comments in the article with similar figures, according to which the global population is expected to increase by around 20% by 2050 and senior citizens will make up a disproportionate share. The number of people over the age of 65 is expected to double from 800 million to 1.6 billion during this period. [1]

In view of this demographic development, there are opportunities to benefit from precisely this trend. Opportunities lie in targeted investments in sectors that could benefit from the growing proportion of older people.

🚑 Healthcare: A growing market worth billions

Facts:

• In the USA, people over the age of 65 already account for 36% of healthcare expenditure, although they only make up 18% of the population. Age-related diseases such as cardiovascular disease, diabetes and neurological disorders are driving up costs. [1]
• Alzheimer's cases are even expected to double worldwide by 2050.

Possible profiteers:

Medical technology

• Medtronic ($MDT (+0,84%) ) - (cardiac pacemakers, diabetes technology)
• Stryker ($SYK (-0,04%) ) - (orthopaedic implants, surgical devices)
• Siemens Healthineers ($SHL (-1,27%) ) - (imaging, diagnostics)

Pharmaceuticals

• Novo Nordisk ($NOVO B (-1,91%) ) - (Diabetes & Obesity)
• Eli Lilly ($LLY (+0,98%) ) - (Alzheimer's, Diabetes)
• Roche ($ROG (-0,34%) ) - (Oncology, Diagnostics)

🏡 Senior Living & Care: Bottlenecks in nursing homes worldwide

Facts:

The UK has a shortfall of over 30,000 senior units by 2028. [1]

In Germany, France and Italy there is a shortage of nursing home places due to the ageing population. [1]

In the US, only 2% of people over 65 live in nursing homes, leading to an increasing demand for home care and telemedicine. [1]

Potential beneficiaries:

Care providers

• Brookdale Senior Living ($BKD (+0%) ) - (senior living, care facilities)

Homecare

• ResMed ($RMD (+0,34%) ) - (sleep apnea, ventilators)
• Fresenius Medical Care ($FME (-1,72%) ) - (dialysis, home therapy)
• Coloplast ($COLO B (-0,15%) ) - (ostomy care, incontinence products)

Telemedicine

• Teladoc Health ($TDOC (-0,82%) ) - (virtual doctor visits, digital health solutions)
• Hims & Hers ($HIMS (-0,05%) ) - (telemedicine & e-health)

Anti-Aging

• L'Oréal ($OR (-1,8%) ) - (skin care, cosmetics)
• Estee Lauder ($EL (+0,94%) ) - (luxury cosmetics, skin rejuvenation)
• Revance Therapeutics ($RVNC ) - (Botox alternative, wrinkle treatment)

🚢 Leisure & consumption: The new "silver economy"

The following chart shows the distribution of wealth in Germany depending on the age of the main income earner. [4]

It is clear that older people tend to have higher wealth than younger age groups. This is reflected in the significantly higher values for the percentiles for age groups aged 50 and over. In particular, the groups aged between 50 and 74 have the highest assets.

The trends are also similar internationally:

• The wealth of older people is 3x that of millennials.
• Over-60s control more than 50% of consumer spending in many developed countries.
• The global silver economy could reach a volume of USD 15 trillion by 2030 (Oxford Economics).

This observation underlines the economic importance of the older generations and their central role in wealth distribution and consumer spending.

Possible beneficiaries:

Luxury

• LVMH ($MC (-0,72%) ) - (fashion, jewelry, wine & spirits)
• Hermès ($RMS (-1,31%) ) - (Exclusive Fashion & Accessories)
• Richemont ($CFR (-2,22%) ) - (Swiss luxury watches & jewelry)

Cruise (Over 60s book a third of all cruises worldwide [1])

• Royal Caribbean ($RCL (+0,33%) ) - (Cruises for seniors & families)
• Carnival ($CCL (+0,28%) ) - (mass market cruises)
• Norwegian Cruise Line ($NCLH (-0,38%) ) - (premium cruises)

Motorhome manufacturers/ recreational vehicles (47% of motorhome users are over 55 years old, In the UK, two thirds of over 55s have a motorcycle license, which may indicate a growing market for motorcycles and accessories. [1])

• Thor Industries ($THO (-0,23%) ) - (motorhomes, campers)
• Winnebago ($WGO (-1,54%) ) - (motorhomes & caravans)
• Harley-Davidson ($HOG (-0,63%) ) - (motorcycles and entry-level electric motorcycles)

🤖 Technology & automation: solution to the labor shortage

Facts:

The labor shortage caused by an aging society is becoming a global challenge. Automation, AI and robotics could help close the skills gap. [1]

Profiteers:

• ABB ($ABBNY (-0,71%) ) - (industrial robotics, automation)
• Fanuc ($6954 (-0,66%) ) - (robotics, factory automation)
• Intuitive Surgical ($ISRG (+0,07%) ) - (robot-assisted surgery)
• Siemens ($SIE (-0,86%) )- (automation & also medical technology)

🧠 Conclusion:

Demographic change offers long-term investment opportunities. Early investment in the right sectors can benefit from rising spending on health, care, leisure and technology.

I myself am still looking for one or two individual investments and am a little annoyed that I didn't get into Hims & Hers earlier, although I have been on the verge of doing so several times. Apart from the luxury segment with LVMH, the portfolio also includes Siemens as a conglomerate in the field of automation.

Do you explicitly take demographic change into account in your investments, e.g. in the form of individual shares?

Which shares do you have in your portfolio or do you still see them as an opportunity?

Thanks for reading!

_________

Sources:

[1] https://www.goldmansachs.com/insights/articles/how-to-invest-as-the-global-population-ages

[2] https://www.bpb.de/kurz-knapp/zahlen-und-fakten/globalisierung/52811/demografischer-wandel/

[3] https://de.statista.com/statistik/daten/studie/1343516/umfrage/entwicklung-der-fertilitaetsrate-in-afrika/

[4]

https://www.iwd.de/artikel/mit-dem-alter-waechst-das-vermoegen-489710/

I was able to leave the champagne in the fridge yesterday after LVMH $MC (-0,72%) fell short of expectations in terms of profit and net income, losing up to -5% at times. The share recovered slightly later in trading. Things don't look so rosy today either. In the long term, however, I am not worried, even if the jump above €800 may take a little longer.

Let's start with the facts:

I have taken the time and trouble to read through the annual reports and listen to the earnings call:

Summary and classification from the published annual reports of LVMH "Presentation
2024
Annual Results" [1] and "Financial Domcuments" [2]. Page references in the source reference refer to the reports mentioned separately in [Source 1 & 2].

First of all, a brief overview of how the % figures in the annual report are to be understood, as this is important in my opinion.

📈 Percentage figures: "Published" vs. "Organic"

Two types of growth figures are given in the LVMH reports:

1 . Published development (Published)

• This figure shows the change in sales compared to the previous year in euros.
• It takes into account exchange rate fluctuations (e.g. a weak US dollar or yen) and changes in the scope of consolidation (e.g. due to acquisitions or sales of parts of the company).
• Example: A fall in the US dollar against the euro means that sales from the USA are worth less in euros, even if they have remained stable in the region. *(For a detailed explanation, please refer to the "Appendices" at the end of the post).

2 . Organic development (Organic)

• This figure shows the "real" growth of the core business.
• Exchange rate effects and changes in the company portfolio are deducted.
• It better reflects the extent to which the company has actually grown or declined in its markets.

Why the difference is important:

Published change gives a complete picture of external factors. Organic change, on the other hand, shows operational performance and is a better indicator of a company's long-term stability.

📊 Business figures 2024: overview

• Sales: EUR 84.7 billion (-2% published, +1% organic, exceeded expectations of EUR 84.3 billion) [2, p. 2; 3]

• Operating profit: EUR 19.6 billion (-14% published, -9% organic, below expectations of EUR 20.3 billion) [1, p. 23; 2, p. 7; 3]

• Net result: EUR 12.6 billion (-17% published, below expectations of EUR 13.7 billion) [1, p. 22] (More on increased marketing & administration costs later in the text)

• Operating margin: 23.1% (decline of 3.4 percentage points, but still strong compared to the industry) [2, p. 7]

Regional performance: [1, p. 17-18]

• Japan: The strongest market with +28% organic sales growth, supported by a weak local currency and robust local demand.
• Europe and USA: Stable development of +2% and +3% organic sales growth respectively, despite uncertain consumer sentiment.
• Asia (excluding Japan): Decline of -10% organic, mainly due to weaker demand in China.

Main factors for profit decline explained: (Transcript Earnings Call, CFO: Jean-Jacques Guiony)

LVMH reports a 17% drop in profits to 12.5 billion euros compared to the record previous year. This is mainly due to several factors:

1 . Increase in costs:

• Operating costs increased by 2 %, which was higher than organic sales growth and led to a reduced operating margin.

2 . Currency and price fluctuations:

• Currency movements, mainly due to the US dollar and the absence of price increases contributed to the decline in gross margin, which fell by 180 basis points (-1.80%)

3 . losses in certain areas:

• Wine & Spirits: a decline of -36% due to lower volumes, prices and mix ratios, although costs were reduced.
• Duty Free Shoppers (DFS): Heavy losses, mainly due to weak Chinese tourism in Hong Kong and Macau.
• Non-recurring charges: Losses due to restructuring in Duty Free Shops (DFS), the withdrawal from brands such as Stella McCartney and Off-White, as well as expenses for irregular events, e.g. the Olympic Games and employee share plans.

4 . Higher expenses:

• Administrative expenses increased by 9% and investment in new stores and marketing costs were maintained or increased slightly (+1%), further impacting profit.
• Labor costs increased, but could not be offset by price increases (or should not be offset by price increases, according to the call).
• In addition, costs increased due to store openings already planned in 2021-2023, which increased the cost base.

Additional management decision:

• LVMH faced a difficult decision: to cut costs more drastically, but this would have sent the message that a "crisis" is structural in nature, i.e. longer-term and profound. This would have meant the company adopting a very cautious approach to spending and investment in order to prepare for a prolonged crisis.

• Instead, the management emphasizes that the "crisis" is only temporary and that it is important to remain flexible in order to adapt to changing circumstances. They did not want to take too drastic measures that could damage the company in the long term, especially in areas such as marketing and budget planning. These should not be cut too severely in order not to jeopardize future growth potential and competitiveness.

• Despite the decline in profits, LVMH was able to increase its cash flow by 3.4 billion euros, which led to a reduction in debt.

• In addition, a stable dividend of 13 euros per share was proposed in order to offer shareholders a constant return in difficult times.

Summarized so far: LVMH's profit decline resulted from an imbalance between cost increases and sales growth, as well as specific challenges in some business units.

👜 Products & segments: Highlights 2024

1 . Fashion & leather goods

• Sales reached EUR 41.1 billion (-3% published, -1% organic). Louis Vuitton shone with innovative collections, including Pharrell Williams' "The World is Yours" designs. Christian Dior combined tradition and modernity with its spring/summer 2025 collections, inspired by Amazons and Scottish history. A collaboration with artist Takashi Murakami and the opening of a flagship store on the Champs-Élysées are planned for 2025. (2, S. 11-12)
• Further store expansions in addition to the new flagship store on the Champs-Élysées are planned to further strengthen the global presence in Tokyo and Milan.

2 . Perfumes & Cosmetics

• In the Perfumes & Cosmetics segment, sales rose to EUR 8.4 billion (+2% published, +4% organic). Dior Sauvage continued to assert itself as the world's leading men's fragrance, supported by the launch of "Sauvage Eau Forte". Guerlain expanded its successful "Aqua Allegoria" range and focused on sustainable production, including regenerative agriculture for the flowers used in the fragrances. (2, S. 13-14)

3 . Wines & Spirits

• Sales in the Wines & Spirits segment fell to EUR 5.9 billion (-11% published, -8% organic), as weaker demand in China and the USA weighed on the business. Nevertheless, Moët Hennessy impressed with new products such as Dom Pérignon Vintage 2015 and other prestige cuvées. For 2025, LVMH plans to further expand the customer experience, including through innovative marketing initiatives such as the collaboration with Formula 1. (2, p. 10)

4 . Watches & Jewelry

• In the Watches & Jewelry division, LVMH generated sales of EUR 10.6 billion (-3% published, -2% organic). Tiffany & Co. opened its renovated "Landmark" flagship store in New York, while Bulgari set new standards with its "Aeterna" collection and the world's thinnest watch design. (S. 14-15)

5 . Selective Retailing (Sephora & DFS)

• In the Selective Retailing division, sales rose to EUR 18.3 billion (+2 % published, +6 % organic). Sephora recorded double-digit growth in North America and Europe and relied on innovative technologies such as AI tools to improve the customer experience. (2, S. 15-16)

🌎 Sustainability in case anyone is itching:

• Reduction of CO₂ emissions by 55% compared to 2019 (target for 2026 already exceeded).
• Biodiversity projects will be expanded to five million hectares by 2030 (2024: 3.8 million hectares)
• Focus on circular design: by the end of 2024, 31% of materials were already sourced from recycled sources (2, S. 4)

💰 Financial strength and key figures

Cash and debt

• Cash position: EUR 9.6 billion (+24% compared to 2023).
• Free cash flow: EUR 10.5 billion (+29% compared to 2023)
• Net financial debt: decrease to EUR 9.2 billion (-14% compared to 2023), resulting in a debt ratio of 13.3
• Available credit lines: EUR 10.8 billion, sufficient to cover current liabilities

Inventories

• The total value of inventories rose to EUR 23.7 billion, an increase of 3.1 %. This is primarily due to strategic stockpiling in the fashion and perfume sectors.

📈 Classification in the stock market environment

LVMH shares have been under pressure in recent months, despite strong fundamentals:

• Macroeconomic uncertainties: Interest rate hikes and a weaker buying mood for luxury goods are weighing on the sector.
• Declining figures in Asia: Weak sales in China are dampening market sentiment.
• Competitive pressure: Competitors such as Hermès $RMS (-1,31%) are reporting stronger growth, which is increasing the pressure on LVMH.

LVMH has reported a 17% drop in profits, not a good sign at first glance. But when you look at the details, it becomes clear:

The problems are largely temporary.

• Macro factors: Currency movements (strong USD), higher costs and weaker demand in some segments, notably Wine & Spirits (-36%) and DFS (Travel Retail).
• No structural problem: Management has deliberately cut non-aggressive costs in order not to jeopardize long-term growth potential (e.g. marketing & expansion).
• Operating margin under pressure: Costs increased by 2%, while sales declined slightly (Published, organic +1 %)which led to a decline in the margin.

⚡ Why I remain optimistic in the long term:

• Strong brands & pricing power: LVMH owns premium brands with high pricing power, once demand recovers, the company can expand margins again.
• China recovery as a catalyst: Weak Chinese tourism is weighing on business, but consumer behavior should normalize in the medium term.
• Global demand shift: Luxury is not dependent on "one" country; if one region weakens (e.g. due to US tariffs on European luxury goods), LVMH can expand sales in other markets (e.g. in the Middle East, South East Asia or Europe). In addition, different production locations and logistics strategies can be used to circumvent trade barriers.
• Solid financial position: Despite the decline in profits, cash flow remains strong (€10.5 billion), debt has been reduced and the dividend remains stable at €13.

📉 It may remain bumpy in the short term, but LVMH is a quality company with a strong capacity for innovation, which will remain in demand even in difficult times. I am looking forward to the future plans of the industry leader, which remains on course for success with a strongly growing brand presence. For long-term investors, the "price slide" could therefore be more of an opportunity than a risk. (Of course, my personal opinion does not constitute investment advice or a recommendation to buy or sell. 🙂)

Finally, Bernard Arnault was also optimistic about the future:

"LVMH will continue to focus on creativity, excellence and agility to extend its leadership in the luxury market. Despite global uncertainties, the Group sees further potential for sustainable growth and long-term success."

🎉 Thanks for reading! From here on there are attachments, examples & original slides

_______________

*Exchange rate fluctuations explained (example)

When a company like LVMH sells products in the USA, sales are generated in US dollars (USD). However, since LVMH publishes its financial report in euros (EUR), these sales must be converted into euros.

What happens if the US dollar depreciates against the euro?

1 . Before the devaluation: 1 USD = 0.95 EUR

• A turnover of USD 100 million would correspond to EUR 95 million.

2 . After the devaluation: 1 USD = 0.90 EUR

• The same turnover of USD 100 million now corresponds to EUR 90 million.

➡️ Although LVMH sold exactly the same amount in the USA, sales in euros appear lower.

At the beginning of 2024: 1 USD = 0.9060 EUR.

Low on August 23: 1 USD = 0.8927 EUR.

Increase until December 31: 1 USD = 0.9662 EUR.

_______________

Sources:

[1] LVMH: "Presentation" to " 2024 Annual Results"

https://lvmh-com.cdn.prismic.io/lvmh-com/Z5j825bqstJ998qD_LVMH-2024FullYearresults.pdf

[2] LVMH: "Financial Domcuments"

https://lvmh-com.cdn.prismic.io/lvmh-com/Z5kVBpbqstJ999KR_Financialdocuments-December31%2C2024.pdf

[3] Expected results 2024

https://stock3.com/news/lvmh-aktie-nach-zahlen-deutlich-unter-druck-2-16085679

If you've made it this far, you can still see the original slides from the presentation of my favorite products, or rather those of my wife 😵‍💫.

$CFR (-2,22%)
$BRBY (+2,96%)
$KER (+2,1%)

Tonight presents LVMH
$MC (-0,72%) presents its results for the 2024 financial year and Q4.

• Financial release after the close of the Paris stock exchange
• 18.00 Earnings Call via live webcast

https://www.lvmh.com/en/financial-calendar/2024-full-year-results

Analysts expect sales for the fourth quarter of 23.2 billion euros and earnings per share (EPS) of 17.44 euros [1].

For the full year 2024, turnover of 84.2 billion euros and EBITDA of 25.97 billion euros is forecast [2].

Morgan Stanley raised its rating for LVMH to "overweight" yesterday and set the target price at 820 euros (+14%). As a result, the share price rose by 3% and is moving back towards the 800 euro mark [1].

Market development:

The luxury sector recently experienced an upswing after Richemont $CFR (-2,22%) the parent company of Cartier, presented impressive figures.

In the third quarter, which ended in December 2024, turnover rose by 10% to 6.15 billion euroswhich exceeded analysts' expectations [3].

The positive results also boosted other luxury brands such as LVMH, Kering $KER (+2,1%) and Hermes $RMS (-1,31%) [4].

The US market is expected to be a key driver of LVMH's growth, especially given the continued weakness of the Chinese market [5].

USA: A sustained recovery in demand is boosting sales.

China: The recovery is slower than expected, but competitors such as Burberry $BRBY (+2,96%) are reporting stabilized sales.

Fashion & Leather Goods: Louis Vuitton and brands such as Loewe and Rimowa continue to perform strongly.

Risks in brief:

Morgan Stanley warns of potential burdens from tariffs on luxury goods or consumer restraint, particularly in China.

Should growth at Louis Vuitton stagnate, this could have a negative impact on the entire Group.

Portfolio:

LVMH is the second-largest single position in my portfolio after getquin Deepdive with just under 5%, consisting of direct and indirect investments, behind Bitcoin $BTC (+0,42%) .

I am therefore looking forward to the results tonight and am betting on a strong Q4.

The battle for Europe's most valuable company continues... can LVMH still surprise and make the leap over the €800 mark or are expectations already priced in?

___________________

Sources:

[1]

http://de.investing.com/equities/l.v.m.h.?

[2]

https://de.marketscreener.com/kurs/aktie/LVMH-4669/termine/

[3]

https://www.richemont.com/investors/results-reports-presentations/

[4]

https://www.investopedia.com/european-luxury-stocks-jump-on-richemont-record-quarterly-sales-8775521

[5]

https://www.reuters.com/business/retail-consumer/luxury-groups-pin-hopes-us-china-weakness-persists-2025-01-15/

As every Sunday, the most important news from the past week. As well as the most important dates for the coming week.

Also as a video:

https://youtube.com/shorts/6kS3uOc3Gyo?si=ylP3Ik3aaxt4tQ6Q

Monday:

The Dutch pension fund ABP sold all of its $TSLA (+2,84%) Tesla shares. However, the reason for the sale is not Elon Musk's political statements. It was his remuneration model and the working conditions at Tesla. According to Tesla, Musk is entitled to a 56 billion dollar share package that Musk has been fighting over with American courts.

https://www.handelsblatt.com/finanzen/anlagestrategie/fonds-etf/tesla-europas-groesster-pensionsfonds-verkauft-alle-tesla-aktien/100100218.html

Tuesday:

$ST5 (-3,31%) Steico exceeded expectations in terms of turnover 376.3 million euros instead of 375 million euros. However, profits were slightly lower than expected. Steico manufactures sustainable insulation materials.

https://www.ecoreporter.de/artikel/steico-mehr-umsatz-weniger-gewinn-aktie-legt-zu/

Producer prices in the USA are less hot than expected. Year-on-year, producer prices rose by 3.3%. However, analysts had expected an increase of 3.5%. Producer prices are regarded as a leading indicator for inflation.

https://www.ariva.de/news/usa-erzeugerpreise-steigen-weniger-als-erwartet-11501258

Wednesday:

The German economy remains in a permanent slump. According to initial estimates, GDP shrank by 0.2% in 2024. This means that GDP has shrunk for two consecutive years (2023: 0.3%). This was last seen in 2002 and 2003 and resulted in Agenda 2010. It is striking that comparable political players were in government in 2002 and 2003, as well as in 2023 and 2024.

https://www.handelsblatt.com/politik/konjunktur/bip-daten-deutsche-wirtschaft-schrumpft-erneut-minus-von-02-prozent/100100833.html

New DAX record at 20,609 points. The reason for the rise is a decline in core inflation in the USA. This reduces the risk of a restrictive monetary policy by the Fed. Core inflation was expected to be 3.3 %, but was actually 3.2 %.

https://www.handelsblatt.com/finanzen/maerkte/marktberichte/dax-aktuell-dax-steigt-nach-us-inflationsdaten-auf-neuen-rekord/100100826.html

Thursday:

As the Swiss luxury group $CFR (-2,22%) Richemont presents strong figures, the entire luxury goods sector takes off. Even $KER (+2,1%) Kering and $MC (-0,72%) LVMH were also able to make significant gains. The Christmas quarter went much better than expected.

https://www.deraktionaer.de/artikel/commerce-brands-unicorns/richemont-mit-knaller-zahlen-lvmh-kering-und-co-starten-durch-20373118.html

Also $ZAL (+0,33%) Zalando reported a strong final quarter and exceeded its profit targets in Q4. EBIT is likely to rise to 510 million euros, whereas a maximum of 480 million euros was originally forecast.

https://www.handelsblatt.com/unternehmen/handel-konsumgueter/online-modehaendler-zalando-uebertrifft-mit-schlussspurt-gewinnziel-fuer-2024/100101118.html

In his first days as President of the European manufacturers' association ACEA, Ola Källenius is campaigning against the CO2 sanctions imposed on car manufacturers. His argument is that we need a market-driven path to decarbonization and not one driven by EU sanctions.

https://www.handelsblatt.com/unternehmen/industrie/autoverband-acea-ola-kaellenius-wehrt-sich-zu-beginn-seiner-amtszeit-sich-gegen-co2-strafe/100101161.html

Friday:

Trump is likely planning to make cryptocurrencies a national priority and wants to give crypto insiders a voice in the government to do so.

https://www.instagram.com/p/DE6ZsF6R-5v/?igsh=bjgyMGVhemZjMWZx

Industrial production in the US rises by a surprising 0.6% in December. Experts had only expected an increase of 0.2%. Mining and the production of utilities also increased.

https://www.n-tv.de/ticker/Industrieproduktion-in-den-USA-steigt-im-Dezember-ueberraschend-um-0-9-Prozent-article25496778.html

These are the most important dates for the coming week:

Monday: 08:00 Producer prices (DE)

Tuesday: 14:30 Inflation data (Canada)

Thursday: 14:30 Unemployment figures (USA)

Can you think of any other dates? Write it in the comments 👇

#termine
#inflation
#kanada
#erzeugerpreise

⬆️⬆️⬆️

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