The Luxury Goods Vue is a concentrated share portfolio of high conviction positions in ten stocks which are poised to benefit from growth in demand for luxury goods in emerging economies across Asia.
Every quarter our Investment team conducts a thorough review of this portfolio, taking into account recent earnings and related news flow, and provides our investors with an update on its performance and any changes made to the Vue.
Macrovue’s Luxury Goods thematic portfolio (or Vue) is one of our stronger performers over the last twelve months, having returned 36.77 % (to 4/30/2018).
By means of comparison, the ASX 200 was up 5.1 % over the same period.
Top contributors to performance were:
- Kering +86.02%
- Michael Kors +82.79%
- Moncler +80.22%
The 3 best-performing Luxury Goods stocks in the last 12 months
French luxury goods conglomerate Kering delivered a very solid 1Q 2018 earnings report with consolidated revenues up by 27.1% as reported and 36.5% on a comparable basis to €3.1 billion.
Gucci sales were up 48.7% and are now some 62% of total revenues.
The company also saw a sustained sales increase at Yves Saint Laurent (up 19.6% on a comparable basis) and decent growth for the so called “Other Houses” (up 37.9% on a comparable basis), driven by exceptional momentum from Balenciaga and solid trends at Alexander McQueen, the Jewelry Houses, and in Watches.
Gucci is now Kering's most profitable brand by far but Saint Laurent, Balenciaga and other brands and categories should continue to provide solid growth as well.
Given the spectacular 12 month stock performance, it’s hard to believe that luxury apparel and accessories retailer Michael Kors was struggling as recently as 18 months ago, with tepid same store sales and reduced profitability.
Fortunately the company embarked on a solid restructuring effort that included aggressively cutting back on department store promotions in order to reduce the number of discounts on their merchandise. These constant stream of promotions were not only cutting into sales, but also diluting the brand.
The company also embarked on a number of very specific initiatives to improve same-store sales outcomes: new design elements for its handbags in the $498 and $398 category, more footwear in high-volume stores, and an increased digital marketing spend.
These measures, combined with the opportunistic purchase of iconic high end shoe retailer Jimmy Choo in July 2017 have facilitated a solid turnaround going into 2018 and the stock price has responded accordingly.
Analysts predict that Italian luxury wear retailer Moncler's revenue growth will continue to exceed luxury peers' high-single-digit pace in the midterm as it steers its strategy to grab new online opportunities as it expands globally.
The company, best known for its down jackets, is making the most of the positive momentum in the luxury goods sector, accelerating investment in digital and omnichannel inventory management, while continuing to expand its store network and add product lines.
Moncler made the most of an exceptional winter in Europe and extended Chinese New Year, and will use that to facilitate the buildup of its digital infrastructure.
Complementary categories, such as knitwear, shoes and accessories, which rose 25-40% in 2017, should be a sales driver into the Northern spring and summer. As well the “Genius” designer collaboration is progressing, with first collections due in June.
It’s no wonder that Moncler has doubled its sales in the five years to end 2017 to become a 1.2 billion-euro brand, capable of expanding revenue across all regions.
Explore Macrovue’s Luxury Goods portfolio
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
Past Performance is not a reliable indicator of previous performance. See how our performance is calculated.