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LVMH Moet Hennessy Louis Vuitton SE MC

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Morningstar’s Analysis

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LVMH's Sales and Profits Rebound Strongly From 2020, Exceed 2019 Levels. Shares Rich

Jelena Sokolova, CFA Senior Equity Analyst

Analyst Note

| Jelena Sokolova, CFA |

We increase our fair value estimate for wide-moat LVMH to EUR 357 as we incorporate stronger than expected improvement in sales and profits in the first half of 2021 not only against easy 2020 comparables but also against 2019 levels. Revenue in the second quarter was up 14% on a comparable basis versus 2019 levels (up 84% from 2020 levels and sequential improvement from 8% versus 2019 delivered in the first quarter). Performance continued to be led by the fashion & leather division, which reported stellar 40% growth against 2019 levels (38% in the first quarter) with continued strength of Louis Vuitton and Dior and good performance of smaller brands. Performance was balanced across nationalities and Asia and the U.S. led gains as Europe and Japan remain constrained by lack of tourism. Strong growth led to positive operating leverage with margin for the division at record 41% (similar to second half of 2020) and helped overall group reach 26.6% operating margin (versus 19%-20% it delivered on average over the past 10 years). Other divisions reported strong growth against 2020 levels, and mostly exceeded 2019 levels, with exception of perfumes & cosmetics (hindered by make-up and travel retail channel) which was down 1% on 2019 levels and selective retailing which remained 19% below 2019 levels in the quarter. Profitability improved strongly across the divisions, mostly exceeding 2019 levels (with exception of travel retail).

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Company Profile

Business Description

LVMH is a global producer and distributor of luxury goods. It operates six segments: fashion and leather goods, its largest and oldest; watches and jewelry; wines and spirits; perfumes and cosmetics; selective retailing (including Sephora and airport duty-free retailer DFS); and other (including publishing). Higher-profile brands include Louis Vuitton, Bulgari, Fendi, Givenchy, Tag Heuer, Hennessy, Moet & Chandon, Glenmorangie, Sephora, and Benefit. LVMH operates more than 5,000 stores around the globe and is headquartered in Paris.

22, Avenue Montaigne
Paris, 75008, France
T +33 144132222
Sector Consumer Cyclical
Industry Luxury Goods
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 148,343


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