>>> Ferrari steps up battery know-how though no plans to make them


April 8, 2024


https://finance.yahoo.com/news/ferrari-steps-battery-know-though-104040820.html


BOLOGNA, Italy (Reuters) - Ferrari wants to increase its expertise in battery cells given their importance in its shift to electrified vehicles, but it has no plans to manufacture them itself, its CEO Benedetto Vigna said on Monday.

The Italian luxury sports car maker has been selling hybrid-electric cars since 2019 and has promised its first-fully electric vehicle at the end of next year. Ferrari, which sold just shy of 14,000 cars last year, might not have the scale to produce its own cells profitably.

"We want to open up cells and understand what is in there," Vigna said at the opening of a research centre on battery cells in partnership with Italy's Bologna University and chipmaker NXP Semiconductors.

"Production will always be done through external manufacturers, based on the know-how we hope to acquire through this research centre," Vigna said during a presentation.

"We cannot afford to take cells as black boxes," he added.

The E-Cells Lab is focused on electrochemistry and is aimed at boosting Ferrari's long term expertise in battery cells, which it buys from external suppliers.

"We'll use more and more cells and will ... need to know the chemistry," Vigna said.

E-Cells Lab would initially focus on lithium-based, liquid-state cells, but was ready to turn to address new chemistries and technologies, although Vigna said he did not see solid-state batteries as a real option for the time being.

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>>> Ferrari N.V. (RACE), through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide. The company offers range, special series, Icona, and supercars; limited edition supercars and one-off cars; and track cars. It also provides racing cars, and spare parts and engines, as well as after sales, repair, maintenance, and restoration services for cars; and licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods. In addition, the company operates Ferrari museums in Modena and Maranello; Il Cavallino restaurant in Maranello; and theme parks in Abu Dhabi and Spain. Further, it provides direct or indirect finance and leasing services to retail clients and dealers; manages racetracks; develops and sells a range of apparel and accessories; and operates franchised and owned Ferrari stores. The company also sells its products through a network of authorized dealers operating points of sale, as well as through its website. Ferrari N.V. was founded in 1947 and is headquartered in Maranello, Italy.

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>>> LVMH’s Bernard Arnault Makes Surprise Visit to Beijing


WMD

by Denni Hu

June 27, 2023


https://www.yahoo.com/lifestyle/lvmh-bernard-arnault-makes-surprise-124128845.html


SHANGHAI — Bernard Arnault, chairman and chief executive officer of LVMH Moët Hennessy Louis Vuitton, landed in Beijing on Tuesday, visiting key retail locations in the country’s capital city.

For his first post-pandemic China visit, Arnault made stops at SKP Beijing, China World Mall and WF Central in downtown Beijing and conducted store visits at LVMH brands such as Dior, Tiffany & Co., Louis Vuitton, Loro Piana, Fendi and Bulgari.

According to social media posts shared on Xiaohongshu, the social-commerce platform, Arnault was accompanied by his daughter, Delphine Arnault, chairman and CEO of Christian Dior Couture; his youngest son, Jean Arnault, director of marketing and development, Louis Vuitton watches, and other top executives at LVMH.

According to Xiaohongshu, Arnault spent a particular amount of time at Dior boutiques. He also made a quick stop at Hermès‘ SKP Beijing store.

The Arnault entourage also stopped at The Espace Louis Vuitton in Beijing, a cultural and art space adjacent to the China World Mall that opened in 2017.

An LVMH spokesperson declined to comment on Arnault’s China itinerary, but it is believed the LVMH chief will travel to Chengdu, then Shanghai, both key retail hubs for the luxury goods conglomerate in China.

In April, Arnault and senior members of the LVMH management team met with Wang Wentao, China’s Minster of Commerce, in Paris. Arnault revealed that LVMH will participate in the sixth China International Import Expo in Shanghai later this year. Wang expressed his satisfaction with the strength and diversity of the world’s largest luxury group’s commitment to China, praising the “many commercial and cultural contributions” made by various brands under the group.

Arnault’s China visit comes after a series of high-profile trips made by luxury executives to the country in recent months. Last Feburary, François-Henri Pinault, chairman and CEO of Kering, became the first luxury executive to visit China since the country reopened last December.

Arnault’s expected China visit was first reported by Reuters earlier this month.

China’s post-COVID-19 recovery helped lift LVMH’s first-quarter revenue by 17 percent. Asia, excluding Japan, registered 14 percent growth in the first quarter. Despite a swift rebound for the first half of 2023, an impending slowdown in the market meant that luxury players will continue to court big spenders in a bid to sustain the high level of growth seen during the past decade.

Louis Vuitton and Dior, two of the largest brands at LVMH, have been revamping their existing flagships and opening up exclusive salons to better serve super VIPs in China.

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Titleist - Acushnet (GOLF) - >>> Golf shows investors like competition, but not too much: Morning Brief


Yahoo Finance

Myles Udland

June 7, 2023


https://finance.yahoo.com/news/golf-shows-investors-like-competition-but-not-too-much-morning-brief-120026106.html


The golf world was rocked on Tuesday.

After a bitter, year-long fight the PGA Tour and the Saudi-backed LIV Golf league have set aside their differences and announced a "newly formed commercial entity to unify golf."

In other words, the leagues have merged. Arms have been laid down in the world of irons and drivers and wedges.

What all this means is, by definition, up in the air. "All parties will work in the months to come to finalize terms of the agreement, with details to be announced in due course," the PGA Tour said in its release.

There are all kinds of angles to this story and most of them don't concern investors. And least not directly.

But we did see a reaction in shares of the two biggest golf-related plays in the US market on Tuesday. And the reaction was positive — Titleist parent company Acushnet (GOLF) and Topgolf Callaway (MODG), which owns clubmaker Callaway, both saw their stocks gain nearly 5% on the news.

In a note to clients on Tuesday, Randal Konik, an analyst at Jefferies, wrote "this unexpected agreement holds immense potential to elevate the sport of golf to new heights."

"By joining forces, this combined entity can harness their collective resources, capital, and expertise to generate heightened attention and overall interest in the game," Konik added. "The infusion of capital from PIF signifies a strong commitment to the growth and promotion of golf on a global scale."

Significantly, this agreement also saw pending litigation between the parties dropped.

But it wasn't just any kind of litigation — several LIV players sued the PGA Tour on antitrust grounds last August, with the complaint alleging the PGA Tour held "monopoly power" in the world of professional golf.

Less than a year later, the issue of fair competition in professional golf will find a resolution by the two sides — along with the DP World Tour, Europe's biggest professional golf circuit — joining forces.

That the market liked seeing good old-fashioned open market competition in the world of golf go away should come as no surprise.

One of the most popular concepts in the world of investing is "moat." Meaning: does your business have a large, wide, and easily defensible position against its competition? The bigger the better.

In his 1993 letter to Berkshire Hathaway (BRK-A, BRK-B) shareholders, Warren Buffett quotes the great Peter Lynch: "Competition may prove hazardous to human wealth."

Buffett's point, in context, is that Berkshire owned large positions in names like Coca-Cola (KO) and Gillette because they are brand names with competitive advantages that are "obvious to even the casual observer of business," Buffett writes. In other words, they have large moats.

There are other sodas and plenty of options for men's razors and shaving cream. But as an average consumer who doesn't think too hard about such things, it also happens that I prefer Diet Coke and use a Gillette razor.

In 2005, Berkshire made $5 billion when Procter & Gamble (PG) bought Gillette. Berkshire's holdings in Coke are now worth $25 billion. Last year, Coke paid Berkshire $700 million in dividends; Buffett spent $1.2 billion building the position from 1987-1984. This is the moat in action.

The stock market's reaction to news of a détente between the PGA Tour and LIV on Tuesday, then, is straightforward — this new entity's increased power in the marketplace will be a positive for the business of golf.

Whether this is good for consumers or players is a different question. But for investors, less competition is better.

Of course, many investors cheer the idea of free market capitalism and therefore would never be caught openly celebrating monopoly power.

Instead, call it a moat.

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>>> Ulta Beauty COO on record-breaking sales: ‘The whole store is hot’


Yahoo Finance

by Edwin Roman

April 9, 2023


https://finance.yahoo.com/news/ulta-beauty-coo-on-record-breaking-sales-the-whole-store-is-hot-142511750.html


Inflation and slowing consumer spending on discretionary items haven't put the brakes on Ulta's (ULTA) momentum in the beauty category.

In its fiscal fourth-quarter earnings last month, the beauty retailer reported record annual revenue in 2022 that surpassed $10 billion for the first time in its 33-year history while its customer loyalty program reached an impressive 40.2 million members.

"The whole store is hot," Ulta Beauty COO Kecia Steelman told Yahoo Finance's Brian Sozzi at the 2023 Shoptalk Conference (video above). "But I would say one of the categories that we're really seeing that's coming through COVID that's really stuck is wellness. ... So we're seeing wellness stick, and we're also seeing [consumers] really lean in a little bit more to cosmetics, which is great."

According to Susan Anderson, analyst at Canaccord Genuity, Ulta's strength can be attributed to the strength of the category overall as well as factors specific to the retailer, such as its rewards program, omnichannel presence, and range of products and services across mass and prestige cosmetics, skincare, and wellness.

The beauty category has "continued to be strong into this year," Anderson told Yahoo Finance Live following her bullish Buy rating on Ulta stock. "I think that's only going to benefit Ulta."

"We also see them as a share gainer despite the higher growth category," added Anderson, who has a $622 price target on the stock. "We see them taking share from department stores, particularly as they roll out their prestige business further and then also add luxury such as Dior to their lineup of brands that they sell in the store."

Even as Ulta makes a push into more luxury segments, Steelman noted that the retailer is still attracting a broad range of consumers.

"What we're really pleased that we see is that the consumer across all income sectors is spending at a great pace," the COO said. "There's not one income sector that's outperforming another. So it's very consistent across the spectrum, and I think part of that is because we do offer everything in one place across all price points."

Ulta Beauty's momentum has given its collaborator Target (TGT) reason to celebrate as it saw a boost in makeup sales in the fourth quarter. The 350 Ulta shop-in-shops in Target stores have also incrementally boosted Ulta's sales and expanded its customer base.

"Target has over a hundred million customers in their loyalty program," Anderson said. "The next largest is probably Ulta. So it's definitely very large, but there's over a hundred million adult women in the U.S., so we think there's still opportunity for them to grow that loyalty program."

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>>> Ferrari (RACE) - While exotic car manufacturer Ferrari (NYSE:RACE) might seem an odd idea for the best blue-chip stocks to buy, in my view, it makes perfect sense. First, it’s a world-recognized brand with a market cap north of $51 billion. Second, it’s performed very well this year, gaining over 29% of equity value. In contrast, the benchmark S&P 500 index moved up just under 9% during the same period.


https://finance.yahoo.com/news/greatest-7-blue-chip-stocks-170709839.html


Fundamentally, what makes RACE so special within this rarefied blue-chip stocks list focuses on economic insulation. Brewing headwinds against the consumer economy means that people are cutting back on their purchases, impacting once-resilient sectors like electric vehicles. However, Ferrari remains a powerful brand that constantly generates positive traction because it caters to a completely different wealth class.

In other words, there’s rich and then there’s Ferrari rich. And Ferrari rich doesn’t worry about little things like interest rate hikes. They’re truly above it all. Not surprisingly, Wall Street analysts peg RACE as a consensus moderate buy. Their average price target comes out to $287.58, implying a bit over 3% upside potential.

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>>> The Estée Lauder Companies Completes Acquisition of the Tom Ford Brand

April 28, 2023


https://finance.yahoo.com/news/est-e-lauder-companies-completes-161500504.html


ELC licenses the TOM FORD trademark to Zegna Group for fashion and accessories and Marcolin Group for eyewear


NEW YORK, April 28, 2023--(BUSINESS WIRE)--The Estée Lauder Companies Inc. (NYSE: EL) ("ELC") announced today that it has completed its acquisition of the TOM FORD brand and is now the sole owner of the TOM FORD brand and all its intellectual property.

ELC’s stewardship and its licenses with Ermenegildo Zegna N.V. (NYSE: ZGN) ("Zegna Group") and Marcolin Group provide continuity and allow for the further evolution of the TOM FORD brand as one of the preeminent global luxury brands of the twenty-first century.

As previously announced, the deal values the total enterprise at $2.8 billion. At closing, ELC paid approximately $2.25 billion. This amount was funded by cash on hand and proceeds from the issuance of commercial paper, as well as $250 million received from Marcolin. An additional aggregate amount of $300 million in deferred payments from ELC to the sellers becomes due beginning in July 2025. The remainder of the total enterprise valuation is reflected in the acquisition of TOM FORD FASHION by Zegna Group.

About The Estée Lauder Companies

The Estée Lauder Companies Inc. is one of the world’s leading manufacturers, marketers, and sellers of quality skin care, makeup, fragrance, and hair care products, and is a steward of outstanding luxury and prestige brands globally. The company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, La Mer, Bobbi Brown Cosmetics, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, and the DECIEM family of brands, including The Ordinary and NIOD.

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>>> L'Oréal's Latest Acquisition Could Be a Game Changer


Motley Fool

By Adam Spatacco

Apr 23, 2023


https://www.fool.com/investing/2023/04/23/loreals-latest-acquisition-could-be-a-game-changer/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

L'Oreal recently acquired the Aesop cosmetics brand for $2.5 billion.

Several luxury brand companies and private equity firms were competing for it.

Aesop just entered China, an emerging market for luxury retail.

The cosmetics giant's purchase of Aesop was its biggest acquisition ever.


When it comes to growth, fashion companies frequently choose to buy it off the rack. They expand by acquiring already-popular luxury brands and build a robust portfolio of different products that can include alcoholic beverage and skincare brands as well as clothing.

In recent history, a big catalyst for luxury goods sales has been the rise of social media. Content creators and influencers have contributed to a broader democratization of luxury goods. It is not uncommon to see pictures of non-celebrities on Instagram or Snapchat flaunting expensive clothing or vacationing in exotic locales.

This is one reason that stocks like Ulta Beauty, LVMH Moet Hennessy, and L'Oreal SA (LRLCY) have been performing handsomely for investors. All three have returned well over 100% over the last five years. And L'Oreal just made a new $2.5 billion acquisition -- its biggest deal ever. Let's see what that could mean for the company and its investors.

The name of the game is consolidation

Unlike technology companies, luxury brand operators don't always allocate heavily into the development of innovative, new products. Rather, these companies tend to acquire brands when they want to diversify their offerings.

Over the last few years, several big names in luxury fashion have been purchased. For example, LVMH bought Tiffany's for around $16 billion in 2021. In November 2022, Estée Lauder acquired the Tom Ford brand in a deal that put an enterprise value of $2.8 billion on it.

The rationale behind these deals is that the acquiring company is getting much more than a brand or new suite of products. In a way, it is buying history. Well-known brands tend to have fiercely loyal customers. (Look at Apple as a prime example.)

L'Oreal recently found its way into the deal mix when it approached Natura & Co to acquire beauty and wellness unit Aesop. According to L'Oreal's press release, Australia-based Aesop generated $537 million in sales in 2022. That gives it a valuation of 4.7 times revenue based on the deal price.

Is the juice worth the squeeze?

It's not every day that a company makes its biggest acquisition ever. Following the deal, Yahoo Finance interviewed Pauline Brown, the former head of LVMH North America for her take. She asserted that L'Oreal had paid a premium for Aesop, but that it still got a good deal on it, and she suspected that the bidding process was intense.

Perhaps some validation can be provided to investors regarding the price tag, because according to public reports, rivals including LVMH and Japanese skincare conglomerate Shiseido were competing with L'Oreal to ink deals for Aesop. Moreover, Axios reported that several private equity firms, including KKR, were also interested.

Good times ahead?

While makeup and skincare products straddle the line between consumer staples and consumer discretionary goods, sales of cosmetics tend to be resilient during times of recession. As Brown pointed out:

Beauty has outgrown all categories of consumer goods for as long as I can remember. [The] premium segment of beauty even outgrows the total market of beauty. And I would put this [Aesop] in the premium segment .... It has obviously during the pandemic moved largely online. Aesop is about 30% online penetration in terms of its total sales, but more importantly here, it has way outpaced the growth of the total beauty sector, and I would say it's probably outpaced almost all of the L'Oreal brands in terms of its recent performance top and bottom line.

This sentiment should excite investors. And if that weren't enough, it's important to keep in mind that Aesop primarily operates in the Americas, Europe, and Australia. The company just entered China last year.

Management consulting firm McKinsey & Co. published a report in November about the state of luxury fashion. McKinsey found that "the luxury sector is expected to grow between 5 and 10 percent in 2023, driven by strong momentum in China (projected to grow between 9 and 14 percent) and in the United States (projected to grow between 5 and 10 percent)."

While cosmetics is a component of fashion, it's safe to assume that markets like China will play an integral role in luxury skincare for years to come. So while Aesop has a minute footprint in China, the brand should be able to leverage L'Oreal's operations and storefronts there to penetrate a new market. Now could be a really exciting opportunity to buy L'Oreal stock.

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LVMH - >>> Europe’s first half-trillion-dollar company couldn’t have made it without China


Quartz

by Ananya Bhattacharya

April 25, 2023


https://finance.yahoo.com/news/europe-first-half-trillion-dollar-133400394.html


LVMH has become the first European firm in history to surpass $500 billion in market cap.

Besides its eponymous products—the fashion lines of Louis Vuitton and the wines and spirits of Moët Hennessy—the Paris-listed conglomerate is also behind a slew of other luxury and lifestyle labels, including Bulgari, TAG Heuer, Christian Dior, and Stella McCartney.

Even before reaching its new sky-high valuation, the French luxury house, founded and run by Bernard Arnault, became the first European firm to slide into the list of the top 10 companies in the world by stock valuation. On the back of upbeat first-quarter sales earlier this month, LVMH clawed its way into a ranking long dominated by US tech behemoths such as Apple, Alphabet, and Amazon.

China’s comeback helped LVMH

In January, Arnault said that LVMH had “every reason to be confident, indeed optimistic on China.” He added that if the “green shoots” the company sensed in China continue to grow, “it will be an excellent year.”

By the end of the first quarter, sales were showing promise. While reporting its most recent earnings earlier this month, LVMH noted that “Asia experienced a significant rebound following the lifting of health restrictions.” This included China scrapping covid-19 restrictions after three long years in 2023.

Sales have been buoyed by the return of luxury shopping in China not only for LVMH but also for others such as rival bagmaker Hermès and the British luxury brand Burberry.

To service this group of affluent shoppers, LVMH is gearing up to meet them where they are. The company is reportedly launching a two-story flagship Louis Vuitton store in Hainan, a duty-free haven in China. (Whether the store itself will offer duty-free products is not yet public knowledge.) LVMH also continues to expand further into metros as well as tier-2 and -3 cities such as Fuzhou, Guiyang, and Nanning.

Arnault, who co-founded LVMH 35 years ago, is 74, and he seems to have succession planning on his mind. The tycoon tweaked the structure of his holding company to the kind used by the likes of other French family-owned firms such as Hermes and Michelin, to prevent takeovers and ensure control stays within the bloodline. But the family tree isn’t so straightforward. Arnault has five children from two different marriages to choose from.

In January, Delphine Arnault, Bernard’s 47-year-old daughter and the oldest of his five children, was appointed head of Dior. Antoine Arnault, 45, is CEO of the holding company Christian Dior SE—which controls 41% of the capital and 56% of the voting rights in the LVMH group—and vice chairman of its board of directors.

Arnault’s three younger children also hold important positions in the group: 30-year-old Alexandre Arnault, 28-year-old Frederic Arnault, 24-year-old Jean Arnault oversee the jewelry brand Tiffany, the watch brand Tag Heuer, and Louis Vuitton’s watches division, respectively.

Arnault is in no rush to choose yet. Chairman since 1989, he is considering holding on to his post until his 80th birthday.

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Hermès - >>> Another iconic European luxury brand, Hermès, is a no-brainer buy right now. Just like Ferrari, Hermès doesn't need to worry about inflation and other macro headwinds because its core customers aren't much bothered by economic downturns. It can also easily afford to charge higher prices to offset its elevated supply chain costs.

https://www.fool.com/investing/2023/04/18/why-ferrari-hermes-and-coca-cola-are-no-brainer-bu/


Hermès differentiates itself from other top-tier luxury companies like LVMH (LVMUY) with two tactics.

First, it produces most of its products in France through a tight network of artisan workshops instead of outsourcing all of its production to overseas factories -- as LVMH does with most of its leading brands. That focus, which results in some items being crafted from start to finish by a single artisan, enables Hermès to sell its products at sky-high prices and gross margins.

Second, Hermès doesn't own a massive portfolio of secondary brands like LVMH does. It spends all of its cash cultivating the growth of its namesake brand, which prevents it from overdiversifying and diluting brand appeal.

This is a simple formula that generates consistent growth. Between 2017 and 2022, Hermès' revenue grew at a CAGR of 16%, its recurring operating margin expanded from 34.6% to 40.5%, and its net profit increased at a CAGR of 22%.

Analysts expect its revenue and net profit to grow 16% and 14%, respectively, in 2023. Its stock might seem pricey at 54 times this year's earnings, but it arguably deserves that high valuation.

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