Street Takeaways - LVMH Moet Hennessy Louis Vuitton Q3 sales (€648.60, +14.

70)
Wednesday, October 13, 2021 11:01:11 AM (GMT)

Overview:
LVMH Moet Hennessy Louis Vuitton reported Q3 revenue of €15.51B vs FactSet €15.11B after the
market close yesterday. Group organic sales growth came in at +20% vs consensus +19.7%.
Commenting on outlook, within the context of a gradual exit from the health crisis, group is confident
in the continuation of the current growth.
Shares opened little changed, +0.3%, before advancing and currently are trading ~ +2%, around
session highs of +2.4%. Analysts welcomes better-than-expected Q3 sales and think overall figures
should be reassuring for the market. All point out that the group's tone remains confident and at this
stage suggests that no specific major slowdown is underway; further, the group remains in a
position to fully meet demand in Q4 even if it means accepting higher transport costs. A few make
slight upward revision to FY forecasts, but no material changes to consensus and sentiment
expected at this time.
Valuation:
NTM P/E 28.3x vs five-year average 25.5x and high 45.0x, low 16.4x
EV/EBITDA 15.4x vs five-year average 13.2x and high 16.9x, low 9.8x
Sell-side ratings (30 ratings):
Buy 80%
Hold 10%
Sell 10%
The average target increased +0.2% to €755.57, implying 16.6% upside
Consensus Estimate Revisions:
Q4: Revenues +2.1% to €17.63B, and EPS +€0.73, +7.0%, to €11.18.
FY2021: Revenues +0.4% to €61.85B, and EPS +€0.08, +0.4%, to €21.00.
FY2022: Revenues +0.7% to €68.72B, and EPS +€0.21, +0.9%, to €23.44.
Analyst Commentary :
RBC Capital Markets analyst Piral Dadhania
Notes Q3 revenues of €15.5B broadly in-line with consensus expectations
Points out Fashion & Leather growth maintained its two-year stack at +38% which is
reassuring and likely to be amongst the strongest in the luxury sector in 3Q
Adds, in itself, this should provide reassurance on luxury demand trends, particularly with
LVMH management confirming they expect to operate in a similar consumer environment in
the coming quarters
Adds, further, the US region has maintained its momentum in 3Q21 (+22%) whilst APAC has
decelerated and Europe has accelerated broadly in-line with expectations
Views this print as confirmation that trends are evolving largely in the way the market is
anticipating with no major surprises (except slight deceleration for Bulgari in Asia)
Does not anticipate material changes to consensus or any material change in sentiment as a
result
Target remains €780; Maintains outperform
Oddo analyst Jean Danjou - raises target
Comments LVMH group remained buoyed by favourable sales momentum in Q3 with organic
revenue growth at 2 years of +11%, i.e. y-o-y growth of +20%; Notes total sales were +5%
above Oddo forecasts
Remarks Fashion and leather remains the spearhead of the expansion with growth at 2 years
still at a remarkable +38% with just a limited deceleration from the exceptional +40%
reported in Q2
Says trends by region announced by the group overall shed some light on the ongoing
momentum: demand remained strong in both the US and Asia excluding Japan, are
confirmed as lacklustre in Japan impacted by Covid restrictions and, conversely, showed a
sequential improvement in Europe with local demand in good shape.
Notes a modest sequential improvement in growth at 2 years for perfumes and cosmetics
(+0% in Q3 vs -4% in Q1 and -1% in Q2) buoyed by Europe, an identical performance in Q2
for wines and spirits (+7% Q3) and lastly a still marked decline for selective distribution (-
 for wines and spirits (+7% Q3) and lastly a still marked decline for selective distribution (-
19%) which despite a visible recovery in Europe at Sephora remained impacted at DFS by
the persistent gloom of travel retail
Makes slight upward revision to FY forecasts (a total of +2% for sales and results for the full
year) to factor in the upside on Q3 sales and the more favourable forex effect for Q4 but has
made only a marginal adjustment to forecasts for organic growth and left unchanged margin
assumptions
Forecasts growth at 2 years for fashion and leather of +32% in Q4, anticipate a continued
improvement at perfumes and cosmetics over the quarter (growth at 2 years of +2%) and an
improved sequential performance for watches and jewellery (+8%), whilst at the same time
remaining cautious on wines and spirits (+6% after +7% in Q3) and selective distribution (-
15%).
Target raised to €712 from €697; Maintains outperform
Goldman Sachs analyst: Louise Singlehurst -- raises target
Notes, as usual LVMH does not comment on current trading or provide outlook, but as
highlighted in the press release the Group is confident in the continuation of current growth
Comments, during the conference call and questions relating to performance in Asia,
particularly given an increase in regulatory uncertainty in China (e.g. regarding wealth-
redistribution), management confirmed there has been no change in underlying sentiment or
customer behaviour amongst Chinese consumers
Elsewhere, sees the improvement in domestic European consumption as reassuring in the
period (two year stack -6% in 3Q21 vs -15% in 2Q21), particularly in light of management
commentary on reaching 2019 levels of sales in Europe soon despite the ongoing absence of
tourist-driven demand.
Remarks there was limited detail around the performance by region, although looking at
regional trends on an underlying basis versus 2019, management highlighted an improvement
in Europe, a magnitude of growth similar to Q2 for the US, and a deceleration in Asia-Pac
Target raised to €820 from €800; Maintains buy

Industries: Apparel/Accessories
Primary Identifiers: MC-FR
Related Identifiers: MC-FR
Subjects: Street Takeaways, Street Takeaways - Earnings
Related Stories:
StreetAccount Metrics Recap - LVMH Moet Hennessy Louis Vuitton Q3 Sales (€634.50, 0.00)
LVMH Moet Hennessy Louis Vuitton reports Q3 revenue €15.51B vs FactSet €15.11B (€634.50, 0.00)