LVMH shares jump 11% on Q4 sales
LVMH’s upbeat Q4 sales numbers boosted its shares, which added some $30 billion to the French luxury giant’s market cap.
IGTV financial analyst Angeline Ong looks at why LVMH’s sales growth is a positive sign for the rest of the luxury sector.
(AI Video Summary)
LMVH gets big sales increase
The luxury goods company, LVMH, had a great quarter with a 10% increase in sales, thanks in part to Chinese buyers. This boosted investors' confidence in the luxury sector, leading them to invest more in companies like LVMH. As a result, LVMH's shares shot up by 15% at one point, adding a whopping $30 billion to the company's market value. Other luxury companies, such as Kering and Amazon, also saw their share prices rise after hearing the news. Even Burberry, which targets aspirational shoppers, experienced a 4% increase in its shares, despite previously issuing a profit warning.
Signs of overcoming sector challenges
The luxury sector was facing some challenges, like China's slow recovery from the Covid-19 pandemic, tensions in the Middle East, and the Russian-Ukrainian war. These factors were already putting pressure on the luxury market, but LVMH's strong sales figures helped ease concerns. It showed investors that the luxury market may not be as negatively impacted as they thought. As a result, the combined value of top luxury and drinks companies, including LVMH, Burberry, Rémy Cointreau, and Moncler, increased by a staggering $50 billion.
Although LVMH's shares have slightly decreased from their peak, they are still up by 12.3%. This indicates that there is an overall positive feeling in the luxury sector, driven by the company's robust sales performance. So, it's no wonder that investors are feeling more confident and optimistic about putting their money into luxury companies. With the support of Chinese buyers and strong sales figures, the luxury market seems to be bouncing back and attracting investors who are keen to benefit from its success.
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