Luxury comes at a price - LVMH is the largest European company and 15th in the world

Last week, the main index of the Paris Stock Exchange, the CAC40, hit an all-time high. It is the second of the world's main indices to set a record, the first being the British one FTSE100. The driving force seems to be companies producing consumer goods, such as L'Oreal or luxury consumer goods, such as LVMH. These companies together account for approximately 17% of the company's share capital. in the entire French index. But let's take a look at the biggest of them.

LVMH Moët Hennessy is a manufacturing company luxury goodswhich sells all over the world. The company offers champagnes, wines and spirits, e.g. under Dom Pérignon, Ruinart, Moët & Chandon, Hennessy, Ardbeg and Chandon brands, as well as fashion and leather products under e.g. Loewe, Moynat, Louis Vuitton, Christian Dior, Emilio Pucci, Givenchy, Kenzo and Marc Jacobs. It also offers perfumes and cosmetics under the brands Stella by Stella Mccartney, Acqua di Parma, Parfums Christian Dior, Givenchy Parfums, Perfumes Loewe, Kenzo Parfums, Fenty Beauty by Rihanna and Marc Jacobs. LVMH also offers watches and jewelery under the Chaumet, Tiffany & Co, TAG Heuer, Zenith, Bulgari, Fred, Hublot and Repossi brands, as well as custom-designed yachts under the Feadship and Cheval Blanc brands, LVMH designs and builds luxury yachts under the Royal Van Lent brand.

In addition, the company offers daily newspapers under the Les Échos brand; Belmond, luxury travel services, and also runs the Jardin d'Acclimatation amusement park and theme park. It runs 5664 stores. LVMH Moët Hennessy - Louis Vuitton, Société Européenne was founded in 1923 and is headquartered in Paris, France.

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Market data, share price and prospects of LVMH

As of February 2023, LVMH has a market capitalization of $443,87 billion. This makes LVMH the 15th most valuable company in the world by market capitalization. In this respect, the owner of luxury brands is ahead of such companies as JPMorgan Chase, Johnson&Johnson, Walmart and Mastercard. LVMH is just short of $4 billion in capitalization growth to overtake Meta, the owner Facebook or Instagram. In the European Union, LVMH is second to none, it is the largest company on our continent.

The capitalization seems to be quite well covered by the increase in the company's revenues. Just 10 years ago, in 2013, LVMH's revenue was $40 billion. It is now over $70 billion. The company's share price at the time was around $188, while today a share of a luxury brand owner costs over $880. Thanks to this, 73-year-old Bernard Arnault, President and CEO of the company since 1989, could become the richest man in the world, surpassing Elon Musk. His fortune is estimated at $193 billion, and Elon Musk's valuation is $10 billion lower, according to Bloomberg.

In recent years LVMH expanded the scope of its activities to the Asian market and the United States. In 2021, Asia accounted for the largest share in sales results with a weight of 34,8%. The United States, on the other hand, had a share of 25,8 percent. There, in relation to 2021 to 2020, there was a huge increase in sales, because as much as 55 percent. y/y In Asia, the increase was 45%. According to the market consensus, this year net profit may increase fourfold compared to 2020. We are talking about EUR 16 billion in profit compared to EUR 4 billion in a difficult pandemic year. In 2022, the company earned a net profit of EUR 14 billion.

Despite inflation, potential recession, economic slowdown and other everyday difficulties, as you can see, luxury is in the price and wealthy people do not spare money for this type of goods, despite generally more difficult times.