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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Kering SA    KER   FR0000121485

KERING SA

(KER)
  Report
Real-time Quote. Real-time Euronext Paris - 01/15 10:39:03 am
557.3 EUR   -2.16%
01/13KERING : RBC reiterates its Buy rating
MD
01/12KERING : Disclosure of transactions in own shares from January 4 to 8, 2021
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01/12KERING : Disclosure of Transactions in Own Shares
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LVMH shares jump as Louis Vuitton calms worries

07/26/2013 | 09:30am EST
Shoppers walk past a Louis Vuitton store in Shanghai

PARIS (Reuters) - Shares in LVMH (>> LVMH) soared on Friday after the luxury group reassured investors about margins and sales growth at its star brand Louis Vuitton and joined rival Kering (>> KERING) in pointing to an uptick in sales in the second quarter.

PARIS (Reuters) - Shares in LVMH (>> LVMH) soared on Friday after the luxury group reassured investors about margins and sales growth at its star brand Louis Vuitton and joined rival Kering (>> KERING) in pointing to an uptick in sales in the second quarter.

The latest figures added to evidence of a rebound in the luxury sector as solid demand in Japan and the United States combined with recovery in Europe to offset China's slowdown.

Investors were concerned that Louis Vuitton's growth was running out of steam after enjoying more than two decades of annual increases above 10 percent, driven by a rapid expansion around the globe.

The stock in industry leader LVMH (>> LVMH) rose as much as 5.7 percent - their biggest one-day gain in more than three years.

LVMH Chief Executive Bernard Arnault, France's richest man, said in January that Louis Vuitton's slowdown was voluntary and the brand had put the brakes on opening new shops to preserve its exclusivity.

At that time, Arnault publicly admitted for the first time that Louis Vuitton, LVMH's biggest contributor to profits, was at risk of being too ubiquitous.

To counter that perception, Arnault said the brand would move upscale and expand its leather bag offering while pruning its portfolio of LV-embossed canvas bags which make up two third of its business and generate gross margins of around 90 percent.

LVMH Finance Director Jean-Jacques Guiony on Friday said Louis Vuitton's margins rose in the first half, both at the operating and gross level, reversing a decline which analysts estimate started two or three years ago.

"People feared that less canvas and more leather could impact Louis Vuitton's margins," said Exane BNP Paribas analyst Luca Solca.

HSBC calculated that Louis Vuitton's operating margin fell to 42 percent from 44 percent between 2011 and 2012.

RELIEF

Sales growth at LVMH's fashion and leather goods division, of which Louis Vuitton makes up 75 percent of sales, doubled in the second quarter to 6 percent from 3 percent in the previous three months on a like-for-like basis.

"It is a relief that there is an improvement in the second quarter and that the margin (at LV) stopped deteriorating," said Zurich-based Andrea Gerst, who helps run the Julius Baer Luxury Brands fund with 417 million euros ($551.92 million)under management.

Referring to Louis Vuitton's performance regionally, Guiony said trading in Asia was "flattish," in the United States "in the mid-single digits" while in Japan and Europe, it was "a bit higher or a bit lower than double digit."

Guiony added that the bulk of Chinese demand today was from tourists and estimated overall Chinese demand for the brand to be in "mid-single digits" terms.

Analysts estimate that growth in the global luxury goods industry will slow down to around 6-8 percent in 2012, or about twice the level of global GDP growth depending on estimates, compared with 10 percent growth last year.

Luxury investors and analysts said they expected trading to continue to improve in the second half of the year, partly thanks to the return of Chinese customers, the world's biggest buyers of luxury goods.

"We expect a slow but steady recovery of Chinese luxury demand because of the underlying appetite for luxury and wealth creation continuing," Gerst said.

In the past year, China's luxury market, which had been the industry main growth driver, was hit by a slower economy and the government's crackdown on the country's tradition of gift-giving to facilitate transactions and deals.

LVMH rival Kering on said on Thursday the slowdown continued in China but earlier this week Swatch Group (>> The Swatch Group Ltd.), the world's biggest watch maker, said it expected Chinese demand to improve in the second half.

Before Friday's rise, shares in LVMH were down 6 percent since January, making them the second-worst performers on the Paris CAC 40 index <.FCHI> of blue-chips and the worst performing European luxury stock overall.

By comparison, shares in peers such as Kering (>> KERING), previously known as PPR, have gained 28 percent since January while shares in Bruno Cucinelli (>> Brunello Cucinelli SpA) and Salvatore Ferragamo (>> Salvatore Ferragamo Italia SpA) have risen more than 50 percent.

On Friday alone, Kering shares jumped 4.5 percent.

Since January, UBS had estimated that LVMH underperformed luxury peers by over 30 percent and traded on a 2014 enterprise value to earnings before interest, tax, depreciation and amortisation (Ebitda) of 8.1 times, below the sector average of 9.7 times, excluding the very highly valued Hermes (>> HERMES INTERNATIONAL).

($1 = 0.7555 euros).

(Reporting by Astrid Wendlandt, additional reporting by Blaise Robinson,; Editing by James Regan and David Cowell)


© Reuters 2013
Stocks mentioned in the article
ChangeLast1st jan.
BNP PARIBAS -1.91% 44.175 Real-time Quote.4.70%
BRUNELLO CUCINELLI S.P.A. -2.18% 33.94 Delayed Quote.-2.35%
CAC 40 -1.72% 5580.93 Real-time Quote.2.34%
GIFT INC. -0.28% 1779 End-of-day quote.0.62%
HERMÈS INTERNATIONAL -2.39% 875.8 Real-time Quote.1.98%
HSBC HOLDINGS PLC -1.75% 400.5 Delayed Quote.7.75%
KERING SA -2.21% 557.3 Real-time Quote.-4.17%
LVMH MOËT HENNESSY - LOUIS VUITTON SE -2.93% 493.35 Real-time Quote.-0.57%
SALVATORE FERRAGAMO S.P.A. -4.44% 14.53 Delayed Quote.-3.53%
THE SWATCH GROUP SA -1.98% 246.7 Delayed Quote.4.35%
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More news
Financials
Sales 2020 13 317 M 16 142 M 16 142 M
Net income 2020 1 814 M 2 199 M 2 199 M
Net Debt 2020 2 003 M 2 428 M 2 428 M
P/E ratio 2020 39,7x
Yield 2020 1,34%
Capitalization 71 137 M 86 405 M 86 225 M
EV / Sales 2020 5,49x
EV / Sales 2021 4,62x
Nbr of Employees 32 685
Free-Float 57,9%
Chart KERING SA
Duration : Period :
Kering SA Technical Analysis Chart | KER | FR0000121485 | MarketScreener
Technical analysis trends KERING SA
Short TermMid-TermLong Term
TrendsNeutralNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 627,96 €
Last Close Price 569,60 €
Spread / Highest target 35,9%
Spread / Average Target 10,2%
Spread / Lowest Target -30,1%
EPS Revisions
Managers and Directors
NameTitle
François Jean Henri Pinault Chairman & Chief Executive Officer
Jean-Marc Duplaix Group Chief Financial Officer
Baudouin Prot Director
Jean-François Edmond Robert Palus Director & Group Managing Director
Yseulys Costes Independent Director
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