LVMH: French luxury remains strong during crisis

Written by Kader Djellouli

The world’s leading luxury goods company LVMH, owner of the Hermès, Louis Vuitton and Dior brands, has demonstrated its strength by publishing a Q3 turnover of 19.76 billion euros, up 19% year-on-year, compared to the 19.03 billion anticipated by the consensus, despite the slowdown in the global economy and rising inflation.

LVMH said: “Despite an uncertain geopolitical and economic environment, the group is confident that current growth will continue and will maintain a policy of cost control and selective investments.”

The group has benefited from the end of the numerous lockdowns in China due to its Zero Covid policy but also the rise in the value of the Dollar (US citizens benefiting from the strength of the Greenback). The firm said: “Europe, the United States and Japan, which have seen strong growth since the beginning of the year, are benefiting from solid demand from local customers and the recovery in international travel. Asia (including China) is seeing less growth in the first nine months of 2022 although the last quarter is improving thanks to the partial easing of health restrictions.”

Jean-Jacques Guiony, chief financial officer at LVMH said, “In China, Louis Vuitton saw stable sales compared to the same period in 2021. We expect this market to rebound as soon as all health restrictions are lifted” and added “luxury is not a sector that is insensitive to the economic situation but our customers react more to shocks than to variations in gross domestic product“.

The fashion and leather goods division, which includes Christian Dior and Louis Vuitton, grew by 24% in the first nine months of the year, with LVMH’s turnover at 56.5 billion euros, up 20% on a like-for-like basis.


Technical Analysis

LVMH is currently trading at $619, below its Kijun cloud (green line) and Chikou Span (yellow line), indicating a downward trend. The Lagging Span (white line) is below its peers, but at the same time has refused to cross the cloud, indicating a possible reversal of the trend. If it does, the price could move towards its Kijun at $631.66; on the other hand, it could test its first support at $593.98 and then the second at $584.68.

About the author

Kader Djellouli

Kader Djellouli est un trader spécialiste de l'analyse technique Ichimoku Kinko Hyo, il a acquis au fil du temps une profonde compréhension de la psychologie des marchés. Pour lui le trading est une question de patience et de discipline. Il s'efforce de partager ses connaissances par le biais de webinars et d'analyses quotidiennes, dans le but de donner aux clients de la société des informations pertinentes pour optimiser leur prise de décision.