There is ferment in the sector of luxury After Prada detected Versace for 1.25 billion euros and Hermèsone of the oldest French fashion houses, carried out the “Spery” on the stock exchangein terms of capitalization, on the historic rival LVMHthe Louis Vuitton Maison, belonging to the Arnault family. A overtaking which, in reality, was determined by the fall of the LVMH prices, after the disappointing sales data announced by the big name of luxury.
The “overtaking” on the stock exchange
LVMH He closed the exchanges yesterday on the Paris Stock Exchange, a 488.65 euros per share, down 7.8% on a daily basis and 23% since the beginning of the year, with one capitalization of 244 billion of euros, about half of the peak of 500 billion touched in the post pandemic period.
A performance that pay the disappointing sales data announced by the French fashion house, which is hearing the repercussions of the difficult economic situation and the early effects of the duties announced by Trump. The company announced just a drop in sales of 3%in the 1st quarter, due to the negative performance of the clothing sectors (-5%) and alcohol (-9%).
Compatriot Hermeson the other hand, concluded the exchanges in good estate for 2,355 euros per action, for one capitalization of almost 247 billion euro, higher than that of LVMH. Even the performance since the beginning of the year (+1.5%) highlights a discreet seal, perhaps also for the greater cost of the title, which armor from excessive daily oscillations.
But what to expect in the near future?
The war of the duties started by Trump makes him Future scenario full of shadows and difficult to scan. In any case, except for temporary repercussions, analysts believe that the two big names of fashion will be able to beat the situation. Kevin Thozetmember of the investment committee of Carmignacanalyzes the trend of the luxury sector in this season of the quarterly and compares the perspectives with the trend of Walmart, which in good approximation represents the sector die consumer goods.
LVMH: the “pioneer”
LVMH was the first company in the luxury sector to publish the Trimester resultsi, who have been lower than expecteddue to the contraction of demand by American, Japanese and, to a lesser, Chinese consumer consumers. This “not very positive result” does not bode well for the rest of the year, due to the internship nature of Trump’s policies and the weakening of the dollar. The consensus it indicated growing profits at a rate of +12% Compared to the -3% recorded in the first quarter, but this scenario appears less and less likely And it is believed that sales instead register one Flat or very low growth to a CIFRto. LVMH could always reduce costs, but the impact would be limited, because most of the costs (rents and staff) appear incompressible in the short and not in line with the culture of the company (layoffs).
Hermès: the “first of the class”
In 2024, while the sector showed signs of weakness, Hermès It managed to reverse the trend, to obtain clearly higher results, with an increase in the annual turnover of 13%, a rhythm similar to that of the last 10 years. The fashion house rarely “missed” the goal (only once in the last six years), however, after a quarter of 2024 exceptional and extremely high demand, the stocks are likely to decrease. Hermès therefore seems destined to record the quarter with the weaker organic growth from the pandemic period. The good news is that however growing is expected medium-high to a figurebut a consensus a +8.7% It appears to analysts still too optimistic, given the situation. It follows that Hermès should get better than competitors, thanks to a growing growth more by the offer than by the question.
Launch on consumer goods?
As for the other segment of the consumption sector – basic necessities – The luxury sector can serve as a warning for those who wonder how to reduce the risk of wallet. Many investors have tried to focus on luxury securities, taking a potential resumption of profits, given that the sector appeared underestimated, but “chasing” the securities of the primary consumer goods sector, such as Walmartcould prove to be the same risky.
“Despite the current uncertainty at record levels i markets are demonstrating considerable efficiency. Grab a knife that falls is never simple: for this reason, it is essential to focus on titles with high and regular growth prospects, and therefore tend to resist better in the event of moderate flexion “
The Carmignac analyst concludes.
