Luxury Goods Producers Are Now In Trouble.

The slowdown in China's economic growth, the impact of terrorist attacks on tourism and the decrease in luxury consumption of tourists have had a great impact on the luxury industry. Financial Services Company's UBS Group AG (UBS) believes that the situation is likely to deteriorate further.

But even though profits and sales performance are not ideal, many luxury goods groups have increased their dividends to attract investors.

Because of the declining trend of the whole industry, luxury goods manufacturers are generally in a predicament. For them, higher share dividends have gradually become "luxury goods".

It has been reported that since 2016, the price of Richemont Tod, the Swiss luxury group, and the Tod 's SpA of the luxury goods group in the country have fallen by more than 20%, and investors are still short sellers.

Simon Colvin, an analyst at data analysis firms's IHS Markit Ltd., said: "although sales in many key markets are very weak, these companies are still improving their dividends.

If dividends are too high, they may have a long-term impact on the company's continuing operation.

If you are a target investor, you should be careful.

However, this strategy has not worked in the past year.

Morgan Stanley (Morgan Stanley), a company that tracks steady and high dividend yields, has fallen 16% in the past year, down to more than three times the European Storck (Stoxx Europe 600 Index) index.

Previously,

On Wednesday, profits and operating profits in the first half of the year will drop by nearly 50%.

In the first five months of the new fiscal year, the peak sales fell by 14% in the first fiscal month of the new fiscal year, and was forced to buy back the surplus stock in Asia, but analysts still thought they would increase their dividends; the Tod "s group" fell for the sixth consecutive quarter.

Road: "Tod" s group has lost 25.6% of its profits in the first half of the fiscal year, and the number of shops and stores will be flat next year, but spending on dividends will increase by 15%.

According to the media and Markit data, the two companies are the two most profitable companies in Europe, and the venting ratio of more than 6% (venting ratio = current short selling stock / average daily turnover) is also the highest two of the company.

Similar to them, Italy luxury group Salvatore Ferragamo SpA and Germany Hugo Boss AG are also the most preferred targets in the short selling market. The ratio of the two parties is more than 5%, and the share price is also in a downward trend.

Although the sales performance of the two companies is poor, their dividends are higher than the average level of the luxury goods industry.

Global clocks and watches, Switzerland's Swatch Group AG's profit in the first half of the fiscal year has been the lowest in the past seven years. The media reported: "Swatch group issued a profit warning: under the adverse environmental impact, sales in the first half of the fiscal year will fall by 12%, and profits will shrink by more than half." but dividends are higher than the average in the past seven years, and the venting ratio is as high as 27%, the highest in the European Storck index.

LVMH group and Kering SA

Expenditure is also higher than the average level of the industry, but their sales demand in some key markets is increasing, which is also driving up share prices.

The emptying ratios of the two are lower than 1.2%, lower than the overall average level of the luxury goods industry.

The French Herm e s International SCA (Hermes group), France's Herm e s International SCA, has just lowered its full year performance report on Wednesday.

The largest share of dividends paid by giants is only 0.7%, and the share price has risen 14% this year.

However, Luzerner Kantonalbank AG trader Benno Galliker believes that even if the company can maintain high dividends in the short term, the deterioration of sales will eventually affect the company.

"If you start to cut dividends, everyone will think that the company is in bad condition, so they will keep a higher dividend level if they still have funds.

But the luxury industry will not recover in the short term. It is very difficult to get back to the level of growth three years ago.

He said.