Dividends and LVMH’s caution points to fading lust for luxury in US

If you were to win a lottery either with a lottery ticket or bought a very undervalued stock and it became enough for you to be worth a great deal of money, after your basic needs are taken care of, what would you do? It is an age old question, ever since the invention of the lottery or sweeps ticket, to some degree almost everyone gambles a little and only a few get to answer the question. If the answer of the lottery win was $10,000 or less, the average person would say bills or take a vacation. If the win was higher, there is usually an element of shopping involved. Sometimes it is a house, sometimes it a vehicle, sometimes it is clothes but it includes shopping.

In an article by Mimosa Spencer of Reuters, wherever there are people with money to spend, you will find the brands of LVMH. Most of the brands are termed high fashion, which includes both people who can afford the brands and those that want the brands because of what they mean to the person. In the article, the writer writes luxury shoppers in the US are curtailling purchases of high-end fashion and leather goods, according to LVMH’s first quarter sales report.

The owner of LVMH is either the richest or second richest person in the world, and LVMH brands include: Louis Vuitton, Dior, Chanel, Hermes, Hennessy cognac and Tiffany which it bought for $16 billion in 2021.

US revenues grew 8% over the quarter, but LVMH’s finance chief Jean-Jacques Guiony said most of the growth was in the less-exclusive Sephora beauty chain. Sales have fallen after a big push from the end of COVID and a desire to own designer labels.

Credit card data from Citi showed US luxury spending in March declined to its lowest monthly rate in nearly 18%.

LVMH luxury division has almost doubled their global market share to 22% from 12% between 2018 – 2023.

Linking to dividend paying stocks, in every market there are the high profile, highly marketed items that appeals to a small segment but wanted by a bigger audience. If you are a dividend buyer of stocks, sometimes the quality is worth it espically if those consistent dividends pay for it. In every market there are cycles and given the decrease in sales, perhaps now is a good time to buy with even more discounts. The point is always, in your personal finances you always want to have choice to buy or not buy; to sell or not sell; to use the dividends to pay for luxuries or buy more stock; patience is the key and time is on your side.

There are more questions than answers, till the next time – to raising questions.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s