Luxury brands stocks are as rocking as Luxury Bags

0
222

Rising inflation or you can say it’s a way of increasing their profit margin .

The French fashion house has been raising prices at a faster pace than other luxury brands, analysts say, prompting an outcry from some shoppers and testing their willingness to pay.

Chanel Tests Purse Lovers With $3,000 Price Hikes

Chart showing Chanel Luxury brand bags price increase from 2019-2021

Companies from Procter & Gamble Co. to Verizon Communications Inc. have been raising prices to offset rising costs of raw materials, labor and transportation. Consumer prices for goods and services rose 7% in December, the fastest pace since 1982, spurring the Federal Reserve to begin raising

interest rates in March. Hermès International SA raised prices by roughly 3% for 2022, slightly more than its usual 1% to 1.5% annual increase, according to Erwan Rambourg, head of consumer and retail research at HSBC. Mr. Rambourg said certain Louis Vuitton and Cartier items cost 3% to 5% more than they did a year ago. And Rolex SA this year raised prices by an average of 3.4%, according to the company.

Let’s see how all these is reflecting into their Financial statement:

( LVMH )

For the fiscal year ended 31/12/2021: LVMH Moet Hennessy Louis Vuitton SA’s revenues increased by 43.82% and amounted to 64.22B. Net income increased by 142.91% to 12.04B.

LVMH Financial numbers from year 2018 – 2021

Procter & Gamble :

For the fiscal year ended 30/6/2021: Procter & Gamble Co’s revenues increased by 7.28% and amounted to 76.12B. Net income increased by 9.53% to 14.35B. Net assets decreased by 0.48% to 46.65B and EPS increased from 4.96 to 5.50.

Proctor & Gamble Financial Numbers from year 2018 – 2021

Luxury brands stocks have done relatively well compare to market:

While start of 2022 was rough for technology stock , Luxury brands have done well. Returns more than SPX500.

Stock price compared for Luxury brands vs SPX500 in last 1 year

With all that, Should you buy 8000 USD bag for your sexy senorita or put that money into stock. My advice would be to buy stocks. While increased price will test the consumers appetite for these luxury items brans are using big data analysis to know demand will be still strong even with higher price tags.