Comparative Financial Statement Analysis of LVMH, Kering and Richemont. Evaluating Financial Performance and Strategic Growth in the Luxury Goods Industry
Bobyleva, Aleksandra (2025)
2025
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-202505048859
https://urn.fi/URN:NBN:fi:amk-202505048859
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This study analyzes the financial performance and strategic growth of three top luxury goods companies—LVMH, Kering, and Richemont—from 2020 to 2024. The goal was to understand how these firms managed challenges like post-pandemic recovery, inflation, and changing consumer trends, and how their financial strategies affected their competitiveness. The research focused on evaluating their financial health, comparing their strategies, and identifying links between financial decisions and long-term success.
The study used a combination of financial data analysis and strategic theories. Key financial ratios—such as profitability (return on equity), liquidity (current ratio), and solvency (debt-to-equity ratio)—were calculated using annual reports. These numbers were then analyzed alongside strategic frameworks like SWOT (to assess strengths and weaknesses) and Porter’s Five Forces (to study industry competition). Additional insights were drawn from company reports and industry publications to connect financial results with strategies like digital innovation, sustainability efforts, and market expansion.
The results showed clear differences among the companies. LVMH had the highest profitability, supported by its diverse brands and efficient operations. Richemont stood out for strong liquidity and financial stability, thanks to careful debt management and reliable cash flows, though its growth was slower. Kering, despite strong sales margins, saw profit declines due to reliance on a few key brands and rising costs. The study concludes that effective financial strategies—such as managing cash reserves, controlling debt, and investing in new technologies—are vital for success in the luxury sector. These findings offer practical advice for companies to balance risk, diversify strategies, and adapt to market changes.
The study used a combination of financial data analysis and strategic theories. Key financial ratios—such as profitability (return on equity), liquidity (current ratio), and solvency (debt-to-equity ratio)—were calculated using annual reports. These numbers were then analyzed alongside strategic frameworks like SWOT (to assess strengths and weaknesses) and Porter’s Five Forces (to study industry competition). Additional insights were drawn from company reports and industry publications to connect financial results with strategies like digital innovation, sustainability efforts, and market expansion.
The results showed clear differences among the companies. LVMH had the highest profitability, supported by its diverse brands and efficient operations. Richemont stood out for strong liquidity and financial stability, thanks to careful debt management and reliable cash flows, though its growth was slower. Kering, despite strong sales margins, saw profit declines due to reliance on a few key brands and rising costs. The study concludes that effective financial strategies—such as managing cash reserves, controlling debt, and investing in new technologies—are vital for success in the luxury sector. These findings offer practical advice for companies to balance risk, diversify strategies, and adapt to market changes.