Advertising Is Lifting Billions Of LV, And Luxury Goods And Technology Are Becoming More And More Alike.

With four sales volume and product oriented fashion luxury groups reflecting the latest quarter's growth rate, industry demand has been basically established after the expansion of Asian brand names, the gradual rebound of French social stability and the increase of investment in marketing and creative design. In recent years, Gucci Gucci, which has seen explosive growth and has no market share of the first time, is likely to be only a case in the slow track.

Early Thursday LVMH Mo t Hennessy Louis Vuitton SE (LVMH.PA) and Moncler SpA (MONC.MI) increased by 3.2% and 6.3% euros to 392.65 euros and 41.4 euros respectively, both of them rose to the highest level in history and led to second new heights in Hermes international this week.

Jean-Jacques Guiony, chief financial officer of LVMH SE, pointed out at a conference call of analysts that the luxury industry's current boom is no longer just a "Chinese show". Although Chinese customers have not failed to live up to the "super high expectations" of the market, and the remarkable progress has been made in the two quarter, the United States, Japan and European customers have also made positive contributions to the strong growth of the first half of the fiscal year in all regions.

The Burberry Group PLC (BRBY.L) Bob Lee and the Herm s s SCA SCA, which are committed to promoting transformation, are also benefiting from this. The first quarter retail sales growth is twice as fast as the market expectations, and the latter has also accelerated.

However, analyst Tang Xiaotang, analyst at No Agency, warned investors should pay more attention to the improvement and improvement of brand profitability and profitability. The long-term double-digit growth of marketing investment and over 1/3 of the marketing rate are unsustainable.

Since 2017, the analyst has been warning investors to pay close attention to marketing expenses, and believes that the fashion industry has become more and more like the technology industry. Although it is still profitable, it will not lose money, but investment in marketing advertising has become frenzied, and this pattern is not sustainable for a long time.

"Just like competing for star traffic in China, this is a very bad industry phenomenon. In the plane, it is totally unprofitable. Once the growth path of profit, income and investment from strong to weak is reversed, the Domino dominoes will fall. On Thursday, the analyst commented on the performance of Lu Wei Hun Xuan, pointing out that although the investment in the luxury sector is crazy, it has been slightly better than the high-end cosmetic industry. Taking the Dior brand of the French giant as an example, he believes that the strength of the brand in the two quarter can be predicted, but its profit margin may decline instead.

LVMH SE road's two quarter revenue reached 12 billion 500 million euros, better than the market expected 12 billion 300 million euros, and 12% organic sales growth rate slightly over the first quarter and 11% of the same period last year, and the market expectations of 10%. Asia (excluding Japan) grew by 18%, a percentage point higher than the market forecast; Europe, Japan and the United States also recorded an increase of 13%, 11% and 8%, benefiting from the revival of local luxury goods sales in France after the "yellow vest campaign" subsided, and the European growth rate was significantly larger than that in the first quarter of 7%.

The fashion and leather Department, which has contributed more than 60% profits to the group, has achieved 20% organic sales growth in recent years. The management described the performance of Louis Vuitton Louis Weedon and Christian Dior Couture Dior in the word "excellence", and revealed that the new series of Loewe Rowe has also achieved "great success". On the Rimowa day, MW and Berluti grew further, and as for the star designer and the Celine CELINE, who entered the men's market, the group only indicated that the new series of Hedi Slimane has been on the shelves.

The second sector has an organic growth rate of 7%. Management points out that Sephora has strong growth in all regions, regardless of revenue or market share, and has made rapid progress in online sales. In the past eight years, the beauty retailer's revenue has increased 4 times, and now it is the second largest brand of LVMH SE road. The Rogerio Capital of RBC Capital Markets plus Huang capital market estimated that beauty accounted for about 60% of the retail sales, which means that the annual sales volume reached 8 billion 200 million euros.

In response to analysts' questions, Jean-Jacques Guiony revealed that the US business of Sephora, which began to rebound this year, has improved further in the two quarter, but not double-digit growth. He also stressed that the cooperation between Sephora and J.C. Penney Co. Inc. (NYSE:JCP) Penny department store is important to both sides.

Sephora has been stationed in J.C. Penney Penny department store in 2006. There are more than 660 stores in China. Jean-Jacques Guiony told analysts that even though the department store was not as good as before, it was still good for Sephora.

UBS AG UBS analyst's research report pointed out that J.C. Penney Penny's large number of shopping malls continue to shrink, which is not conducive to Sephora's challenge to Ulta Beauty Inc. (NASDAQ:ULTA) and online retailers. Piper Jaffray Co.'s data also show that Ulta Beauty Inc. has surpassed Sephora, and has become the most popular beauty shop in the US. There are market reports this week that J.C. Penney Co. Inc. Penny department store, which has accumulated a huge deficit of US $1 billion 700 million over the past five years, is seeking to restructure its debt to avoid bankruptcy.

In the first half of fiscal year, LVMH SE road's revenue for the first time broke through 25 billion euros, up 15.3% to 25 billion 82 million euros compared with the same period last year, and operating profit increased by 13.9% to 5 billion 295 million euros per annualized year. It was the first time to exceed 5 billion euros, and 21.1% of the operating profit margin was worse than the market forecast, partly due to the rise of advertising and brand fees.

Sales figures prove that related investments can bring greater returns. For example, Louis Vuitton Louis Weedon's pop-up (limited time) store has achieved great success in passenger flow, interaction and sales, so this year will add 20 Limited stores on the basis of 80 stores in 2018. Jean-Jacques Guiony told analysts that increasing marketing spending and capital spending in good times can not only support the existing momentum, but also enhance brand resilience to cope with the global market transformation.

While talking about liquor business, Jean-Jacques Guiony said the situation in Hongkong had no impact on the business in June, but now it is not yet too early to predict July.

LVMH Mo t Hennessy Louis Vuitton SE (LVMH.PA) reported a 376.15 euro on Thursday. After a weak session, it fell 1.1% and its market value exceeded 190 billion euros. The stock has soared 45.7% this year, helping the chairman and chief executive Beranrd Arnault Bernard Arnott squeeze Bill Gates Bill Gate to the third place in the Bloomberg rich list for the first time to win the world's second richest.