With the economy rapidly approaching a period of normalization spurred by vaccine-induced herd immunity, high-end retailers are embracing a new dawn, helped along by massive government stimulus efforts and improving confidence in the V-shaped economic recovery hypothesis.
In fact, stocks in the luxury goods space have been on fire over recent months, and investors may benefit from taking a closer look.
This space benefits from a lack of correlation with other sectors simply because players in the space cater to a consumer base that is often divergent from other demographics in the economy. But they are still cyclical. So, when cyclical juices are flowing, these stocks tend to outperform.
With that in mind, we take a look at a selection of interesting luxury goods stocks worth checking out: Signet Jewelers Ltd (NYSE:SIG), LVMH Moet Hennessy Louis Vuitton SA Unsponsored ADR (OTCMKTS:LVMUY), Sun Kissed Industries Inc (OTCMKTS:SKDI), and Tapestry Inc (NYSE:TPR).
Signet Jewelers Ltd (NYSE:SIG) bills itself as the world’s largest retailer of diamond jewelry.
The company operates approximately 2,900 stores primarily under the name brands of Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda, and JamesAllen.com as well as digital marketplaces under multiple websites.
Signet Jewelers Ltd (NYSE:SIG) most recently announced the appointments of André Branch and Dontá Wilson to its board of directors, effective immediately. Their appointments will expand Signet’s board to 12 from 10 members, 11 of whom are independent, and will further position the company’s goal to reinvent how people browse, shop and purchase jewelry for all occasions.
“We’re thrilled to welcome André and Dontá to the Signet Board of Directors,” said H. Todd Stitzer, Board Chairman. “These dynamic, transformative leaders with incredible backgrounds and track records join Signet at an exciting time, and embody what we seek from our directors – agile mindsets, proven leadership and innovative thinking. I’m confident they will help fuel our work accelerating Signet’s digital-first, omnichannel transformation under CEO Gina Drosos’ leadership.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 5% in that timeframe.
Signet Jewelers Ltd (NYSE:SIG) managed to rope in revenues totaling $1.3B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 9.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.3B against $1.7B, respectively).
LVMH Moet Hennessy Louis Vuitton SA Unsponsored ADR (OTCMKTS:LVMUY) is represented in Wines and Spirits by a portfolio of brands that includes Moët & Chandon, Dom Pérignon, Veuve Clicquot Ponsardin, Krug, Ruinart, Mercier, Château d’Yquem, Domaine du Clos des Lambrays, Château Cheval Blanc, Colgin Cellars, Hennessy, and Château du Galoupet.
Its Fashion and Leather Goods division includes Louis Vuitton, Christian Dior Couture, Celine, Loewe, Kenzo, Givenchy, Pink Shirtmaker, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Nicholas Kirkwood, Loro Piana, RIMOWA, Patou and Fenty. LVMH’s Watches and Jewelry division comprises Bvlgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred and Hublot. LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Groupe Les Echos, Cova, Le Jardin d’Acclimatation, Royal Van Lent, Belmond and Cheval Blanc hotels.
LVMH Moet Hennessy Louis Vuitton SA Unsponsored ADR (OTCMKTS:LVMUY) recently announced that the company showed good resilience in 2020 in an economic environment severely disrupted by the serious health crisis that led to the suspension of international travel and the closure of the Group’s stores and manufacturing sites in most countries over a period of several months.
With an organic revenue decline of only 3% in the fourth quarter, the Group saw a significant improvement in trends in all its activities compared to the first nine months of 2020. Fashion & Leather Goods in particular, enjoyed a remarkable performance, with double-digit growth in both the third and fourth quarters. While Europe is still affected by the crisis, the United States saw a good recovery and Asia grew strongly.
LVMUY hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Shares of the stock have powered higher over the past month, rallying roughly 8% in that time on strong overall action.
LVMH Moet Hennessy Louis Vuitton SA Unsponsored ADR (OTCMKTS:LVMUY) managed to rope in revenues totaling $26.3B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 4.7%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($20.7B against $25.3B, respectively).
Sun Kissed Industries Inc (OTCMKTS:SKDI) looks to now be defined entirely by its subsidiary, SFL Mavin, a high-end online jewelry retailer that brought in sales of nearly $11 million in 2019 and over $122 million since 2004 on a proven track record featuring strong revenues over seventeen years.
That track record looks to have held up in 2020, despite the challenging context for high-end retailers, and also set to ramp up in 2021, based on the company’s recent communications.
Sun Kissed Industries Inc (OTCMKTS:SKDI) recently put out a corporate update on its performance over recent quarters and its outlook for the year ahead.
“2020 has been stormy weather from start to finish for the high-end market, but the light at the end of the tunnel is in view now as multiple strong vaccines get ready to roll out,” commented Joseph Ladin, Sun Kissed CEO. “All in all, we have weathered the storm remarkably well, with accelerating growth over the past two quarters and into the end of the year, maintaining our long-term trajectory with an eye toward breakout performance in 2021.”
According to the release, the company performed extremely well in Q3 2020, ramping revenues to $1.8 million (+53% q/q), and Q4 is on pace, accounting for typical seasonal effects, to post a rapid growth pace when the books are closed.
October and November sales already added up to over $1.4 million by mid-December. And, due to holiday shopping trends, December is often a particularly strong month for the company, suggesting that Q4 was poised to produce robust performance metrics to close out the year.
Ladin added, “We have been able to gain access to inventory holdings at really great pricing levels and we have maintained strong revenue numbers across most quarters despite the unique challenges served up this year. That puts us in what we believe to be a very strong position as we approach a more normal macro context around the next corner.”
Sun Kissed Industries Inc (OTCMKTS:SKDI) is likely nearing a public release featuring its final numbers for 2020 and giving more insights into its sales trends in 2021, which could fuel the next big move in the stock. Shares have been strong since transitioning to SFL Mavin as the lead operating entity for SKDI late last year. The stock is now riding a strong upward trend, up as much as 350% since the operational transition in November.
Tapestry Inc (NYSE:TPR) frames itself as a company that provides luxury accessories and branded lifestyle products in the United States, Japan, China, Hong Kong, Macau, Europe, Canada, Taiwan, South Korea, Malaysia, Australia, New Zealand, and Singapore.
The company operates through three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s accessories, including handbags, such as wallets, money pieces, wristlets, and cosmetic cases; novelty accessories comprising address books, time management accessories, travel accessories, sketchbooks, and portfolios; key rings; and charms.
Tapestry Inc (NYSE:TPR) recently announced its partnership, through its Coach brand, with More Than A Vote, a new voting rights organization led by LeBron James and a coalition of Black athletes and entertainers aimed at combating voter suppression and misinformation that disproportionately disenfranchises communities of color.
“The foundation of democracy is the right to vote,” said Jide Zeitlin, Chairman and Chief Executive Officer of Tapestry, Inc. and Interim CEO of the Coach Brand. “America cannot resolve systemic racism and inequality without ending voter suppression. We are proud to partner with More Than A Vote and to work toward equal access to the ballot box for every single eligible American.”
Even in light of this news, TPR hasn’t really done much of anything over the past week, with shares logging no net movement over that period. But the stock has been a roaring upward trend over the past 6 months, launching over 150% in that time.
Tapestry Inc (NYSE:TPR) pulled in sales of $1.7B in its last reported quarterly financials, representing top line growth of -7.2%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.7B against $1.5B).
…
This article is part of JournalTranscript.com Networks. Read the JournalTranscript.com Networks Disclaimer.
