Europe's largest market capitalization company, Louis Vuitton Mo?t Hennessy (LVMH), has entered the world's top 10 companies by market capitalization. This surge is attributed to the soaring stock prices driven by reopening expectations in China, the largest consumer of luxury goods.
Listed on the French stock exchange, LVMH closed at 883.90 euros on the 13th (local time), up 5.65% from the previous session. Based on the closing price that day, its market capitalization reached 442.5 billion euros (approximately 639 trillion won), which converts to about 488.9 billion dollars. Bloomberg reported that this valuation places LVMH as the 10th largest company globally by market cap, following the US big tech company Meta (555 billion dollars).
The news agency noted that LVMH's market cap is close to entering the 500 billion dollar range, and if it surpasses 500 billion dollars, it will become the first European-listed company to reach this milestone.
LVMH's stock price has risen nearly 30% since the beginning of the year. Gilles Gibeaut, head of European equity strategy at AXA Investment Managers, said, "LVMH's strong growth reflects expanding demand for luxury goods and the intensification of wealth polarization."
Leading luxury stocks LVMH and Herm?s have grown at an average annual rate of over 20% over the past decade. During the same period, the pan-European STOXX 600 index rose only 8.3% annually.
Despite concerns over a deepening recession due to high-intensity tightening and banking crises, LVMH showed solid performance. This is because high-income consumers still have strong purchasing power, and the sector's characteristics, which are less sensitive to economic cycles, have led to more pronounced price increases compared to other consumer goods.
Behind this strong performance is China, a major luxury consumption country. The Wall Street Journal (WSJ) evaluated that with the lifting of China's zero-COVID policy, the pent-up purchasing power of consumers in China and other Asian regions has surged, significantly boosting LVMH's sales.
In its earnings announcement the previous day, LVMH reported first-quarter sales of 21.035 billion euros (about 30 trillion won), a 17% increase compared to the same period last year (18 billion euros). This figure is more than double the market expectation of 8%.
By business segment, sales in fashion and leather goods, including Louis Vuitton and Dior, grew by 18%, while perfume and cosmetics, as well as watches and jewelry segments, each recorded double-digit growth of 11%.
During the same period, Japan led the strong performance with a 34% sales increase, and sales in Asia excluding Japan grew by 14%, while US sales rose by 8%.
Jean-Jacques Guiony, LVMH's Chief Financial Officer (CFO), stated that Chinese customers have been returning to LVMH stores this year, and online sales are also increasing. He added that while cosmetics sales will take more time to recover to previous levels, he expects strong sales of clothing and jewelry within mainland China.
Meanwhile, the sharp rise in LVMH's stock price has significantly increased Chairman Bernard Arnault's wealth. According to the Bloomberg Billionaires Index, as of the market close that day, Arnault's net worth reached 198 billion dollars.
Arnault's net worth had surpassed 200 billion dollars earlier this year, fueled by a stock price surge. Crossing the 200 billion dollar mark in personal net worth is a milestone previously achieved only by Tesla founder Elon Musk and Amazon founder Jeff Bezos, making Arnault the third person globally and the first outside the US to reach this level.
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