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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  LVMH Mot Hennessy - Louis Vuitton SE    MC   FR0000121014

LVMH MOT HENNESSY - LOUIS VUITTON SE

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Louis Vuitton owner flags June turnaround after sales slump

07/27/2020 | 02:02pm EST
FILE PHOTO: Customers stand in front of a Louis Vuitton shop inside the department store Le Printemps Haussmann in Paris, France

LVMH, the world's biggest luxury goods group, said sales momentum picked up in June and had especially improved in China, after store closures sparked by the COVID-19 pandemic tore a hole into the Louis Vuitton owner's second-quarter sales.

Like rivals, LVMH temporarily closed stores and paused manufacturing as the outbreak spread from the key Chinese market to Europe and the United States.

"I do not think we have ever seen such a perfectly negative alignment of planets against us," Financial Chief Jean-Jacques Guiony told a conference call, although he also sounded a note of optimism about an upturn in countries such as China as confinement measures ease.

The conglomerate's rivals, including Gucci owner Kering and France's Hermes, which are yet to report earnings, are exposed to similar trends, although LVMH's business is more varied, as it also produces champagne and wine.

Its share price has held up better than that of peers during the COVID-19 crisis.

In an encouraging sign for the sector, LVMH's sales momentum improved across Asia excluding Japan in the second quarter, with comparable revenue falling by 13% versus a 32% slump in the previous three months.

But it remains exposed to travel restrictions, affecting its duty free stores in airports, while many of the shoppers it targets in cities such as Milan or Paris are tourists.

Guiony said the group's travel retail business would continue to suffer for several more quarters, and warned that domestic shopping by Chinese consumers could not offset the near absence of purchases by Chinese tourists travelling abroad.

TIFFANY APPROVALS

Overall, LVMH's revenues came in at 7.8 billion euros in the April to June period, down 38% on a like-for-like basis, which strips out the impact of currency swings and acquisitions.

That was a touch better than some analysts had expected, with those at UBS citing a consensus for a 39% fall in comparable sales.

The group - which has spent massively on marketing at its big brands like Christian Dior and Vuitton in recent years - said it would control costs and remain more selective in its investments.

It has also increased prices at its most resilient labels, hiking them again by 5% at Vuitton at the end of June -- the third price increase at the brand since March.

Run by France's richest man Bernard Arnault, LVMH was in the middle of working through its $16.2 billion acquisition of U.S. jeweller Tiffany when the pandemic hit.

It examined ways in which it might be able to lower the deal price as a result, though these attempts have been put on hold for now, people close to the matter have said.

Guiony said antitrust approvals for the deal had been delayed by the pandemic, and said LVMH had little visibility on when these might come through. But he said that the particularly steep sales fall in LVMH's watches and jewellery division during the second quarter had not changed the group's view on the deal.

Profit from recurring operations came in at 1.67 billion euros in the first six months of 2020, down 68% from a year ago.

Rival Moncler, which makes luxury puffer jackets, reported a first-half operating loss for the first time in its history on Monday.

By Sarah White and Silvia Aloisi


Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
CHRISTIAN DIOR SE 1.57% 440 Real-time Quote.-5.25%
HERMÈS INTERNATIONAL 1.81% 842.8 Real-time Quote.24.17%
KERING SA 0.41% 607.6 Real-time Quote.3.40%
LVMH MOËT HENNESSY - LOUIS VUITTON SE 0.39% 499.9 Real-time Quote.20.20%
MONCLER S.P.A. 1.85% 42.45 Delayed Quote.4.09%
UBS GROUP AG 0.04% 12.89 Delayed Quote.5.44%
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Financials
Sales 2020 45 236 M 54 791 M 54 791 M
Net income 2020 4 221 M 5 112 M 5 112 M
Net Debt 2020 13 817 M 16 736 M 16 736 M
P/E ratio 2020 61,5x
Yield 2020 0,88%
Capitalization 251 B 303 B 304 B
EV / Sales 2020 5,85x
EV / Sales 2021 4,89x
Nbr of Employees 163 309
Free-Float 51,8%
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Technical analysis trends LVMH MOT HENNESSY - LOUIS VUITTON SE
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TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 462,34 €
Last Close Price 497,85 €
Spread / Highest target 8,47%
Spread / Average Target -7,13%
Spread / Lowest Target -43,6%
EPS Revisions
Managers
NameTitle
Bernard Arnault Chairman & Chief Executive Officer
Antonio Federico Belloni Group Managing Director & Director
Jean-Jacques Guiony Chief Financial Officer
Delphine Arnault-Gancia Director
Antoine Arnault Director
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