Record sales in 2022 led to luxury companies’ stocks outperforming the market
Some stocks surged more than 100% in the last 12 months
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European luxury goods are “on fire.” Despite the economic challenges posed by high inflation and war in Eastern Europe, the local luxury industry found a way to shine in this environment.
Asian buyers are desperate to own European brands. But they are not alone. In fact, Americans have the largest share, of about 30% of the market.
Luxury goods represent an indulgence rather than a necessity. Most of the industry comprises luxury hospitality, personal luxury goods, or luxury cars.
The excess savings during the pandemic poured into European luxury goods. An index of ten European luxury companies (STOXX Europe Luxury 10) was launched in May 2022.
Since then, it has delivered close to 50% returns – way more than STOXX Europe 600 (about 25% over the same period) or STOXX USA 900 (mostly flat over the period).
It is no surprise, though. As I reported in this article, LVMH recently became the first European company to exceed $500 billion in market capitalization. It reflects that buying European luxury goods is not only a status but also a great investment.
The Stoxx Europe Luxury 10 index is made up of 10 companies, such as Ferrari, LVMH, or Moncler. The largest component is LVMH, but that is not necessarily the best-performing company in the index.
Brunello Cucinelli (BIT:BC), gross returns are close to +120% in the last twelve months. The Italian luxury clothing company was founded in 1978 and is headquartered in Corciano, Italy.
Hermes, Burberry, and Christian Dior follow with returns between 55%-80% in one year.
Unsurprising, given the luxury industry trends in 2022. For instance, the luxury hospitality market surged to EUR191 billion, doubling in value compared to 2021.
Moreover, sales of private yachts and jets grew by 18%. Furthermore, sales of luxury cars hit a new record in 2022.
Summing up, everybody appears to buy European luxury goods.
How about their stocks?
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