Luxury for the portfolio from the pinnacle of fashion - LVMH, Burberry, Hermés, Kering, Estée Lauder, Essilor Luxottica, Richemont…

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Below is a tweet thread about LVMH.

The thread states, among other things, that LVMH is weighed down by the weak consumer confidence environment in China, but the consumption of the company’s core customer base has remained strong. The F1 deal brings global visibility and strengthens brand value. Also, insiders have bought 3.7 billion euros worth of shares at a price over 40 percent higher.

The drop in the stock price opens an exceptional opportunity for quality hunters for a long-term portfolio, this is perhaps how the tweet thread could be summarized.

https://x.com/chartaldin/status/1933866796983152835
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Rest of the tweet thread

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I’m considering LVMH for my portfolio, but shouldn’t I buy Dior instead?

Dior owns 42% of LVMH, acts as Arnault’s holding company, and trades at even lower multiples.

I’d gladly hear from someone knowledgeable on the subject.

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I personally buy Dior, but the risk here is that this “discount” may never materialize, at least not until old man Arnault kicks the bucket. There’s a discussion about this a couple of messages up. The free float shares are constantly decreasing as more shares are bought into this family holding company.

One additional point could be that Dior doesn’t always pay out as much in dividends to shareholders compared to LVMH’s dividend; instead, they take in LVMH’s dividends and buy their own shares with them. Due to French dividend taxation, this is a good thing.

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Kering on nimittämässä Renaultin toimitusjohtajana toimineen Luca de Meon uudeksi toimitusjohtajakseen.

Jutun mukaan hänen brändinrakennusosaamistaan pidetään vahvana ja häneltä odotetaan ratkaisuja Guccin ja Saint Laurentin uudistamisessa, kun molemmat brändit kamppailevat laskevan suosion ja myynnin kanssa.

Key Points

  • Shares of Kering popped on reports that it has appointed industry outsider Luca de Meo as group CEO.
  • The French fashion house, which owns beleaguered brands Gucci and Saint Laurent, is embarking on the latest phase of its turnaround.
  • Auto veteran de Meo’s departure as CEO of Renault was confirmed Sunday.
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Here’s a tweet showing what Richemont includes. :slight_smile: Not a very familiar company to me, and perhaps that’s why it came as a surprise that the company is quite “young”.

https://x.com/Quartr_App/status/1934983349077979387

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I have been following LVMH for about half a year. The stock price just keeps falling. P/E is now around 20, dividend yield almost 3%. Not super cheap, but companies in this sector are never super cheap. Cash is burning a hole in my pocket, I might buy this soon. It will surely rise in a proper economic upturn, but does the recent decline mean that a recession is knocking at the door? It also worries me a bit that during my last city break a few months ago in Europe, people walked past empty luxury stores. Perhaps an earnings warning and a sharp drop are still coming before it bottoms out?

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It’s worth considering what is causing the sales decline and what could act as a catalyst for a recovery. Could, for example, the war between Russia and Ukraine have something to do with the sales decline? The operations of many companies took a hit when Russia started the war with Ukraine.

The energy crisis caused by the war, in turn, caused prices to rise across the board, which was met by raising interest rates. This, in turn, caused construction to completely stall. In Europe, interest rate cuts have already begun. When will the US follow suit? Also, the erratic US tariffs cause uncertainty in the markets.

Usually, when the situation is at its bleakest, it can be a good time to buy. Rarely is the stock price low when all the gray clouds have disappeared and only the sun shines in the sky.

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Unhedged’s latest episode discusses LVMH’s drinks division; https://open.spotify.com/episode/4KowCK9BC9PN6ztfh04epb?si=MS6birtPT7KfLymJCJ-uwA

Sales have also decreased there.

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Source: OP

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Would @jonihuu, or anyone else using OP’s services, summarize what the value drivers are behind the Buy recommendation?

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That actually seems to be Kepler Cheuvreux’s report, which OP distributes. In summary, they conclude that there have been and will be headwinds (beverage sales, erosion of COVID margins), but the share price has, in their opinion, taken too much of a hit, even though the short-term outlook is negative.

It’s also good to note that the same entity has, over the past year, given a target price of up to 840€ at its peak (February 2025), meaning they are generally quite bullish. Now the target price has thus fallen by about 30% in four months.

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Target price (600 €) is based on an assessment of LVMH’s growth potential and strong fundamentals (cash flow, margins, low debt). The current price (449.95 €) provides an upside of ~33%, which exceeds the 10% threshold required for a recommendation. DCF and P/E valuation (P/E 2027E: 17.5) supports a higher valuation as markets recover and brands strengthen their position.

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"This morning, Goldman added lvmh to its European Conviction Buy list, arguing that investors should look through second-quarter softness and calling LVMH “a clear winner in the next luxury upcycle.”

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LVMH consensus seems to only include buy and hold recommendations from analysts. There are only a few sell recommendations in Market Screener’s statistics, which start from 2019.

In early May 2025, HSBC, Barclays, and TD Cowen lowered their recommendations to hold. Over the past 2 months, JP Morgan, Deutsche Bank, and Jefferies have also remained at hold or neutral. Goldman Sachs and Bernstein continue with a buy recommendation month after month.

LVMH analyst recom

A Goldman analyst highlighted positive news released by LVMH earlier this year. In March, Louis Vuitton’s new venture into beauty products was reported, and in June, Dior announced Jonathan Anderson’s appointment as creative director for all Dior collections. This is positive for Dior and Louis Vuitton, but at the same time, Moët Hennessy and Tiffany continue to face at least some headwinds.

Regarding funds, I looked at, for example, Seligson’s Global Top 25 Brands fund. In that fund, LVMH was not among the TOP10 holdings based on quarterly reports in 2022-2023. LVMH only rose to the TOP10 holdings in the Q4/2024 quarterly report, becoming the fourth largest holding with a weight of 6.6%. Recent developments look like this:

  • Q4/2024 Quarterly Report: 4th. LVMH share: 6.6%
  • Q1/2024 Quarterly Report: 3rd. LVMH share: 6.4%
  • Seligson Fund Navigator 30.04.2025: 5th. LVMH share: 5.75%

In 2024, Wine & Spirit accounted for 7% of revenue and Watches & Jewelry for 12%. However, the difficulties in these product categories receive a lot of media attention, even though their significance in the larger LVMH picture is smaller. Negative stories perhaps generate more reader interest.

A couple of weeks ago (June 23), a Financial Times article about LVMH-owned Tiffany was published. I found the article neutral and well-written, so I thought I’d pull a few highlights for this thread. The article is likely behind a paywall at the moment. https://www.ft.com/content/58870f92-b46f-4dec-88a7-9de22dbd4711

Tiffany, FT 23 June 2025

The Financial Times article mainly discussed how Tiffany is being revitalized and elevated from a mid-tier brand closer to the level of Richemont-owned Cartier.

“The aim is to move the American jeweller upmarket from a mid-level purveyor of silver and engagement rings to a top-tier maison in the same league as Cartier.”

The article described how Tiffany draws on its illustrious history in an attempt to revive sales of high-end jewelry and gain more visibility.

  • Regarding high-end jewelry, the 2025 Blue Book collection was presented in April at the Met Museum in New York. In the new collection, Tiffany’s Chief Artistic Director of Jewelry, Nathalie Verdeille, has drawn inspiration from jewelry designer Jean Schlumberger’s classic jewelry design. Tiffany seems to trust that the allure of its 1960s heyday will always be popular with the jet set.

The Financial Times interviewed Tiffany’s CEO for the article. Anthony Ledru, who has served as CEO since 2021, discusses hundreds of millions in investments, including the Fifth Avenue flagship store in New York, new equipment, and workshops in Paris.

"This involves everything from buying exceptional stones to new equipment and workshops in Paris to make one-of-a-kind pieces for top-tier clients.

According to Ledru, investments must continue for five to ten years. The article states that in the 4 years since LVMH’s acquisition, about a third of Tiffany’s stores have been renovated.

“We’ll have to invest for five to 10 years, which is what we’re doing now,” says Tiffany chief executive Anthony Ledru

“LVMH has invested heavily in Tiffany since the acquisition, including revamping and updating about a third of its stores so far.”

The article states that most of Tiffany’s high-value jewelry customers are American, generally over 40 years old. CEO Ledru mentions that in Asia, Tiffany’s customers may be slightly younger.

Tiffany’s main focus is on growing its mid-tier customer base, who purchase products starting from $1,300 (HardWear, Lock). Ledru states in the article that sales in this segment have doubled over the past four years.

"This is where Tiffany must actually make a difference in the future and is already starting to do so,” says Ledru, adding that sales in that segment have doubled in the past four years, and need to double again. “If I have to be honest, we’re halfway there.”

  • Tiffany is opening at least two new flagship stores this year, and renovations are expected for other stores as well:

    • In April 2025, Tiffany opened a new flagship store in Milan, and a flagship store is expected to open in July in Tokyo’s ultra-luxury Ginza district.
    • Anthony Ledru mentions at the end of the article that the Paris and London stores are in need of renovation, so changes might be coming for them at some point. Ledru’s description of Tiffany’s Bond Street flagship store in London speaks volumes about the need for renovation:

“a magnificent address, a superb facade, but unfortunately when you enter the store it . . . looks like something out of the ’80s or ’90s”

So, a lot of investments and renovations have been made, but based on Ledru’s comments, Tiffany’s new resurgence will still have to wait. Perhaps in 2-4 years, the London and Paris stores will have been renovated.

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Yksi nouseva teema kulta- ja korumarkkinoilla näyttäisi olevan kiinalaisen Laopu Goldin kasvu Aasian markkinoilla. Tämä keskustelu taisi saada uutta vauhtia, kun Richemontin johto innostui kommentoimaan aihetta webcastissa. Sen verran paljon talousmediaa aihe on kiinnostanut, että keräilin huomioita ketjuun.

Toukokuun 16. päivä Richemont julkaisi tuloksensa ja järjesti analyytikoille webcastin. Webcastissa Bernsteinin analyytikko Luca Solca kysyi Richemontin johdon kommentteja kiinalaisen Laopu Goldin kasvusta Kiinassa. Richemontin transcriptin sivut 13-14: https://www.richemont.com/media/ziepz2n0/fy25-annual-results-transcript.pdf

Luca Solca: “Laopu Gold has been growing like a weed. Is that more of a flash in the pan, or is it something that we need to worry about in the future? They’re seemingly very, very popular, and their IPO has been extremely successful…”

Richemontin toimitusjohtaja Nicolas Bos totesi korujen valmistuksen ankkuroituvan vahvasti paikallisiin kulttuureihin ja perinteisiin, joten paikalliset brändit ottavat osansa markkinoista. Richemontin hallituksen pj. Johann Rupert nosti esimerkiksi Intian vahvan paikallisen korumarkkinan ja sen mestarilliset käsityöläiset. Nicolas Bos sanoi pitävänsä terveellisenä, että markkinat ovat aktiiviset ja uusia tulokkaita nousee eri alueilla. Bos kuvasi Laopun kehittävän erittäin ainutlaatuista ja eriytettyä tarjontaa. Näin se luo myös uutta energiaa markkinoille ja Richemontin on oltava jatkossa luovempia ja kehitettävä uusia tapoja lisätä omien brändien houkuttelevuutta.

Nicolas Bos (CEO): “We think that it’s very healthy that there is an active market with newcomers, new players, in the different regions and different cultures. Laopu Gold is a fantastic example of a new Chinese brand that’s very much rooted in Chinese culture, and also integrated and understood some of the codes of international luxury, and is developing a very, very unique and differentiated offer. It really contributes to building the desirability on the category, and the energy around the category. We have to continue to be creative and to develop ways to make all brands desirable.”

Bos kuvaisi lopuksi uuden brändin olevan tavallaan siunaus markkinassa, sillä se uutta tarjontaa myös uusille ja nuoremmille asiakkaille. Hallituksen pj. Johann Rupert korosti vielä lopuksi Richemontin johdon kunnioittavan ja seuraavan Laopun etenemistä.

Tämä Richemontin johdon vastaus näyttää saaneen yllättävän paljon näkyvyyttä talouslehdistössä. Laopu Goldista on kirjoiteltu parin viime vuoden aikana, mutta nyt kesänä aikana talousmedian kirjoittelu näyttää kiihtyvän. Muutamia esimerkkejä median uutisoinnista:

Asia-Pacific alueen merkitys Richemontille
Bloombergin jutussa mainitaan Laopun Kiinan myynnin olleen viime vuonna oli alle puolet Cartierin myynnistä. Saman jutun mukaan Morgan Stanleyn analyysin mukaan Laopun myynti kuitenkin ylitti Van Cleef & Arpelsin myynnin Kiinassa.

Aasian alueen merkitys on merkittävä Richemontille:

Laopu Gold Co Ltd.
Loppuun vielä jotain poimintoja Laopusa edellä luetelluista jutuista.

  • perustaja Xu Gaoming avasi ensimmäisen Laopu-myymälän vuonna 2009 Pekingiin. Yhtiön myynti on yli kaksinkertaistunut viimeisten kahden vuoden aikana.

  • listautui kesäkuussa 2024 Hong Kongin pörssiin ja osake on noussut listautumisen jälkeen vahvasti. Listautumisannissa osakkeen merkintähinta oli 40,50 hongkongin dollaria osakkeelta

  • Konsulttiyhtiö Digital Luxury Groupin johtaja kuvailee Bloombergin jutussa Laopun tuotteiden vetovoimaa: “Laopu stands out by offering a product steeped in history and Chinese traditional craftsmanship.”

  • Perinteiden arvostuksesta kertonee myös se, että Forbesin jutun mukaan Laopu tarkoittaa kiinaksi kirjaimellisesti “vanhaa kauppaa”. Frank Holmes jopa nimittää jutussaan Laopun olevan kultaseppäalan Hermès, joka tarjoaa eksklusiivisia tuotteita ja hienostunutta muotoilua.

Myymälät:
Laopulla on 40 myymälää tällä hetkellä ja 5 on rakenteilla

  • myymälät sijaitsevat yleensä ostoskeskuksissa, joissa myös eurooppalaisten kilpailijat ovat
  • Pekingissä 13 myymälää, Shanghai 3 (+2 rakenteilla), Shenzhen 3 (+1 rakenteila), Hong Kong 2 (+1 rakenteilla)
  • Lippulaivamyymälöitä on ainakin kolme:
    • Pekingissä SKP tavaratalossa (avattu 2017)
    • Singaporen Marina Bay Sands -ostoskeskuksessa
    • ja Hong Kongissa IFC Mall -ostoskeskuksessa.
  • Tokioon suunnitellaan myymälän avausta

Tarjonta

  • Laopu valmistaa koruja perinteisillä kiinalaisia valmistusmenetelmillä ja lisäksi länsimaisia ​​luksusbrändejä alhaisempaan hintaan. Jutun mukaan päävalikoiman hinnat ovat noin 1 500–7 000 dollarin välillä. Toisessa jutussa mainitaan päävalikoiman hintahaitarin olevan 10,000-50,000 yuaniin. Bloombergin jutun mukaan luksustuotteiden hinnat voivat nousta yli 35 000 dollariin.

  • Bloomberg siteeraa jutussa Morgan Stanleyn analyytikoita, joiden mukaan Laopu on juuri oikealla sweet spot -paikalla olemalla paljon premium-laatuisempi kuin suurten massojen tuotemerkit, mutta kuitenkin edullisempi kuin useimmat luksustuotteet.
    “Laopu sits at the sweet spot of being far more premium than a mass-market brand but more affordable than most luxury,” Morgan Stanley analysts wrote in May."

  • Jutussa nostetaan esille myös LVMH:n kello- ja koru liiketoiminta-alueen johtaja Stephane Bianchin kommentti, jossa hän luonnehti Manner-Kiinan kuluttajien mieltymykset muuttuneen. Nyt paikalliset korumerkit ovat kuumaa tavaraa markkinalla, koska ne ovat kiinalaisia.

  • Bloomberg kirjoittaa kullan hinnan nousun antaneen Laopun myyntiin vauhtia, sillä kiinalaiset kokevat Laopun tuotteet hyväksi kohteeksi säilyttää rahojaan epävarmoina aikoina. Kiinan markkinoilla mikään hyvä idea ei kuitenkaan pysy pitkään kopioimatta, joten odotettavissa on kasvavaa kilpailua muilta kiinalaisilta kilpailijoilta.

Laopun IPO-esitteen tietoja

  • listalleottoesite: (http://hk.lphj.com/ir/2024/0620/2024062000017.pdf)

  • Laopu toimii erittäin kilpailulla alalla, jossa yhtiön on pystyttävä kilpailemaan tehokkaasti. Kilpailukyvyn heikentyminen vaikuttaisi olennaisesti ja haitallisesti myynnin, kannattavuuteen ja kasvunäkymiin.

  • (s. 56) Tiettyjen tuotteiden tuotanto on ulkoistettu ulkopuolisille tuottajille, sillä oma tuotantokapasitteetti ei ole riittänyt.

  • (s. 119) Perinnekultakorut ovat Japanin markkinalla vasta kehitysvaiheessa. Esitteessä ennustettu CAGR vuosina 2023-2028 14,5 %. Tällä hetkellä Tokion perinnekultakorumarkkinoiden päätoimija on Chow Tai Fook.

Laopun listaa seuraavat vahvuudet IPO-esitteessään (sivu 3):

  1. an accredited heritage gold jewelry brand in China, epitomizing China’s intangible cultural heritage value;
  2. relentless focus on innovation and acute sensitivity to the fashion trend of the times;
  3. comprehensive product portfolio with classic craftsmanship, assertive style and high quality;
  4. strong sales network in reputable commercial centers and systematic operational model of boutiques
  5. adoption of standardized enterprise management system to maintain efficient operations and effective quality control in the ever-evolving consumer market.

Analyytikoiden ennusteita (poimittu Forbesin ja Bloombergin jutuista):
Laopu Gold näyttää olevan hypen kohteeksi päätynyt tarinaosake (P/E-luku yli 80x). Ehkä se kertoo myös siitä, että Kiinassa etsitään turvasatamia kriisien ja taantumien pelossa. Mutta tässä JPMorganin ennusteita.

  • JPMorgan ennustaa 28. toukokuuta päivätyssä sijoitusmuistiossa Laopun vuosittaisen liikevaihdon nousevan tänä vuonna lähes 20 miljardiin dollariin, kasvua 135 % vuoteen 2024. Nettotuloksen JPMorgan ennustaa nousevan 3,8 miljardiin dollariin viime vuoden 1,5 miljardista dollarista ja bruttokatteen olevan yli 41 prosenttia.

  • kesäkuun lopulla JPMorganin analyytikko toisti suosituksen ylipainota ja nosti hieman tavoitehintaa (HK$1 149 → HK$1 249)

  • Kesäkuussa myös Goldman Sachs toisti osta-suosituksen ja nosti tavoitehintaa (HK$976 → HK$1 090). 40 % Laopu Goldin osakkeista poistuu Jutun mukaan Laopun osakkeista 40 % poituu kaupankäyntirajoituksesta 27. kesäkuuta, jolloin voi tulla ostomahdollisuuksia (https://www.investing.com/news/analyst-ratings/goldman-sachs-raises-laopu-gold-price-target-on-strong-sales-93CH-4100474)

Osakkeessa oli pientä laskua ennen myyntirajoitusten poistumista, mutta heinäkuussa osake on noussut jälleen uusiin huippuihin.

Laopu Gold stock
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Laopun kasvu vaikuttaa Aasian markkinoilla, mutta vastassa on myös isot eurooppalaiset LVMH, Richemont ja Kering. Euroopassa on enää muutamia perheomisteisia yhtiöitä, kuten Graff, Chopard, Messika, Boodles. Kaikilla neljällä on yhtiöiden nettisivujen mukaan myös myymälöitä Kiinassa, joten jonkinlaista vaikutusta Kiinan myynnillä siis on.

Perheomisteisista yhtiöistä vaikea saada tietoa myynnin jakautumisesta, mutta mahdollisesti perheyhtiöille Laopun voimakas kasvu Aasiassa voisi olla ongelmallista. Richemontin osakekurssissa ei ole nähty laskua, joten Richemontin osalta markkinat eivät näytä olevan huolissaan.

Top players in Jewelry Segment
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Meta has invested a bit in EssilorLuxottica. :slight_smile:

https://x.com/EconomyApp/status/1942680962204311846
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In Helsingin Sanomat, a paywall-free article about the growth of LV in Finland. Astonishingly strong growth, even though it’s almost insignificant from LVMH’s perspective.

A particularly interesting observation from the interviewed docent about the appeal of the price point of LV, and I would assume, more broadly, this kind of entry-level luxury:

Kauppinen-Räisänen speculates that Louis Vuitton has succeeded in finding the perfect price point: they are just suitably too expensive. Many ordinary middle-class people can afford them by saving. However, not everyone has this opportunity.

“The feeling of exclusivity remains. At the same time, the products are attainable with effort even for those who wouldn’t ‘really’ be able to afford them.”

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It is important to note in this article that it discusses revenue growth for 2024, not 2025.

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This kind of email came today from Louis Vuitton:

Sender: finland@contact.louisvuitton.com

Dear customer,

We regret to inform you that a third party has temporarily gained unauthorized access to our system and obtained some of your data.

We want to assure you that the accessed database did not contain passwords or financial information, such as credit card details, bank details, or other financial accounts.

At Louis Vuitton, we highly value the trust and confidential relationship we have with you. Therefore, the situation is now under control, we have further strengthened the security of our systems, and we have been in contact with leading cybersecurity experts.

What has happened?
Despite all security measures in place, we recently detected a personal data breach, which resulted from certain personal data of our customers falling into the hands of an external party due to unauthorized system access.

We want to assure you that our cybersecurity teams have handled the situation with extreme care and precision. Immediately after the situation, technical measures were implemented to contain the incident, specifically by blocking unauthorized access. Louis Vuitton’s teams are cooperating with the relevant authorities, who have been informed of the incident, including the French supervisory authority (CNIL), which acts as our lead supervisory authority in the European Economic Area.

What personal data has the incident involved?
Based on our investigation, we have determined that this incident may have involved some of your personal data:
first name, last name, gender, country, phone number, email address, postal address, date of birth, purchases, and preference-related information.

Our recommendations
Given the nature of the data involved, we strongly recommend that you remain vigilant against any unsolicited communication or other suspicious correspondence, such as emails, phone calls, and text messages. Although we have no evidence that your data has been misused to date, phishing, fraud attempts, or unauthorized use of your data may occur. Never disclose your Louis Vuitton password to anyone. You can also be sure that Louis Vuitton will never ask you to reveal your password.

Our commitment to you
At Louis Vuitton, we highly value the trust and confidential relationship with our customers. We sincerely apologize for any inconvenience this situation may cause. We assure you that the security and protection of your personal data are of paramount importance to us. We are constantly doing everything we can to prevent similar situations from recurring in the future.

If you have any further questions, you can contact us using the contact details below.

Thank you for your continued trust in Louis Vuitton.

Sincerely,
Louis Vuitton Malletier

Customer Service: +358981710681 – finland@contact.louisvuitton.com
Data Protection Officer: personaldata@louisvuitton.com

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ChatGPT:

finland@contact.louisvuitton.com is genuinely the customer service email address used by Louis Vuitton in Finland. This is confirmed by an official Louis Vuitton document, which instructs to contact Finland specifically at that address.

Edit official link and last page:
https://www.louisvuitton.com/content/dam/lv/online/other/allcountry/legalnotice/LV_terms_conditions_FI.pdf

For those allergic to links:
IMG_7417

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