Fast But Not First Banking:
Banking is an industry to balance and it can often be counterintuitive to find success. For example, banks with plenty of cash and liquidity can still fail. Today we are talking specifically about innovation in banking. The banking industry isn’t typically thought of as particularly innovative or cutting edge, but somehow the model has stayed relevant since Mesopotamia and the average age of a bank is 103 years. That longevity is only achieved by “keeping up with the times.” Banks are very innovative. They might not be as fast-paced or adaptive as the tech companies that are associated with innovation and advancement. However, banks have a lot more legislation and logistics to maneuver. This makes them seem slow or old fashioned.
Banking advancement resembles tides more than waves. Waves are small, easy to create, and not very powerful, but tides are large, controlled by larger forces than weather, and effect a whole ecosystem. How banking changes and evolves effects all businesses for better or worse. Tides follow patterns, but there are outlier events that can alter them. This means the best role for a bank is not the contrarian which works in tech, but instead the early adopter.
LVMH Earnings:
Overall revenue from Q2 2023 was up 15% year/year (17% organic) to ~$46.57bn and profit from recurring operations was up 13% year/year to ~$12.8bn. This is strong growth from the luxury empire. But some piece contributed more than others. For example, revenue from Wine & Spirits was down 4% year/year to ~$3.51bn (only branch to shrink). Specifically revenue from Champagnes & Wines grew by 8% year/year with the largest growth coming from Japanese and European markets. Meanwhile, revenue from Cognac & Spirits was down by 11% year/year with the majority of this hit coming from the US market. On the other hand, all other branches grew by double digit percentages:
Revenue from Fashion & Leather Goods grew by 17% year/year to ~$23.36bn.
Revenue from Perfumes & Cosmetics grew by 11% year/year to ~$4.49bn.
Revenue from Watches & Jewelry grew by 11% year/year to ~$5.99bn.
Revenue from Selective Retailing grew by 26% year/year to ~$9.22bn.
Along with overall growth we’ve seen changes in regions for most sales. For example, Asia (especially Japan) has been the largest growth area followed by Europe. Meanwhile, the US has barely grown year/year.
Source: LVMH Group Investor Relations
For the branches’ performance shown in chart form:
Source: LVMH Group Investor Relations
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To access the full spreadsheet and its linked deep dive go here.
Until Sunday,
Soren
Not related with the post's topic but I want to ask you why if Brookfield is in your watchlist, you dont have position yet . Long discount to NAV right now