Many investors are interested in Sephora because it is one of the world’s largest luxury cosmetic brands. Sephora operates over 2,700 stores in 35 countries and sells enormous amounts of cosmetics and other products online.
Sephora sells products from hundreds of cosmetic, fragrance, hair, skincare, toiletry, and dental products brands. Those brands include some of the most famous names in cosmetics Highlights of Sephora’s brand catalog include: Estée Lauder, BURBERRY, Calvin Klein, HERMÈS, Yves Saint Laurent, Versace, and CHANEL.
You cannot buy stock directly in cosmetics giant Sephora, but you can buy shares in the company that owns Sephora. Sephora stock is owned by a French luxury goods conglomerate called Moët Hennessy Louis Vuitton, or LVMH for short.
Note: This is an unbiased research report. The author or Liberated Stock Trader is not affiliated, paid by, or owns stock in any of the companies mentioned in this report.
Who owns Sephora?
Moët Hennessy Louis Vuitton (LVMH) owns 100% of Sephora. Sephora is one of LVMH’s 75 business units. LVMH is one of the worlds leading luxury brands.
Is Sephora on the Stock market?
You will not find Sephora directly listed on any stock exchange globally because Sephora is not a publicly-traded company. Sephora is wholly owned by Moët Hennessy Louis Vuitton LVMH, so if you want to buy shares in Sephora, you need to buy stock in LVMH.
Moët Hennessy Louis Vuitton LVMH stock trades on the Euronext Paris exchange under the ticker symbol LVMH. US investors can buy LVMHF through the over-the-counter market. That means you can purchase LVMH Moët Hennessy Louis Vuitton shares and fractional shares through trading apps such as Stash and Robinhood. You can locate the stock by searching for the ticker name LVMH.
Sephora Stock Symbol LVMH
Sephora’s base stock ticker symbol is LVMH because Sephora is part of LVMH Moët Hennessy Louis Vuitton. LVMH can be purchased on many different stock exchanges, so its country-based stock symbol will vary.
LVMH Moët Hennessy Louis Vuitton trades on European exchanges with the ticker LVMH and American stock markets under the ticker symbol LVMUY, or LVMHF.
Who Owns Sephora Stock?
Sephora stock is wholly owned by LVMH Moët Hennessy Louis Vuitton. Sephora promotes over 3,000 different cosmetic and beauty brands, but Sephora itself is a subsidiary of LVMH Moët Hennessy Louis Vuitton.
Some exchange-traded funds (EFTs) own LVMH. Funds that track the S&P Global Luxury Index will contain LVMUY. LVMH is the first stock listed on the S&P Global Luxury Index’s website.
Moët Hennessy Louis Vuitton makes up 7.69% of the AMUNDI S&P GLOBAL LUXURY UCITS ETF’s holdings, for example. LVMUY also makes up 3.03% of the Emles Luxury ETF holdings.
You can discover if an ETF holds LVMUY by checking the fund’s website. The website will display a list of the fund’s largest holdings.
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Sephora’s Parent Company LVMH Is A Luxury Goods Powerhouse
LVMH is a holding company that owns 75 luxury products brands. They divide the LVMH business into six “houses.” Each house specializes in a specific area of luxury products. The houses include:
- Wines & Spirits
- Fashion & Leather Goods
- Perfumes & Cosmetics
- Watches & Jewelry
- Selective Retailing
- Other Activities
Sephora is a part of the selective retailing group, which operates over 5,000 stores worldwide. LVMH owns legendary luxury brand names, including Louis Vuitton, Christian Dior, Tiffany & Co., Château Cheval Blanc, TAG Heuer, Maison Kenzo, Virgil Abloh, and Krug.
Some of the other activities include the high-end Dutch yacht builder Royal Van Lent. That means LVMH owns a shipyard through one of its subsidiaries,
LVMH is also a property manager and real estate developer. It owns la Samaritaine, a Paris landmark that is under renovation. The renovated la Samaritaine will contain a five-star Cheval Blanc hotel, a department store, 96 social housing units, offices, and a crèche (daycare center).
Some odd LVMH subsidiaries include The Cheval Blanc luxury hotel chain, the Investir – Le Journal des Finances weekly financial newspaper, the Jardin d’Acclimatation, France’s oldest amusement park, Radio Classique, a French radio network, the Le Parisian newspaper, and the Connaissance des Arts magazine.
LVMH Moët Hennessy Louis Vuitton reminds me of Warren Buffett’s Berkshire Hathaway (NYSE: BRK.H). Berkshire Hathaway also owns many seemingly unrelated companies such as Fruit of the Loom underwear, several See’s Candies, and Borsheim jewelry.
How Much Money Does LVMH Make?
Another similarity to Berkshire Hathaway is that LVMH makes enormous amounts of money.
LVMH Moët Hennessy Louis Vuitton reported €44.7 billion ($52.57 billion) in revenues in 2020. The company also reported €4.7 billion ($5.51 billion) in net profits in 2020. LVMH reported €28.7 billion ($33.63 billion) in revenues in the first half of 2021.
A press release claims that LVMH’s organic revenues grew by 53% between the first half of 2020 and 2021. The reported revenues grew by 56% in the same period. The revenues grew from €18.393 billion ($21.56 billion) in the first half of 2020 to €28.665 billion ($33.60 billion) in 2021.
They also reported a €7.32 billion ($8.58 billion) profit for the first half of 2021. LVMH claims the profit grew by 44% between the first half of 2020 and 2021. The revenue and profits grew as the pandemic died down in the first half of 2020 and international travel resumed.
Another similarity between LVMH and Berkshire is cash. LVMH reported an operating cash flow of €5.289 billion ($6.20 billion) for the first half of 2021. The operating cash flow rose from -€1.721 billion (-$2.02 billion) in the first half of 2020.
Financial data shows LVMH survived the pandemic by borrowing money. The total net financial debt grew from €8.23 billion ($9.64 billion) in the first half of 2020 to €15.265 billion ($17.89 billion) in the first half of 2021.
LVMH Moët Hennessy Louis Vuitton Grows during the Pandemic
LVMH Moët Hennessy Louis Vuitton added value during the pandemic year. The total equity grew from €37.532 billion ($43.97 billion) in the first half of 2020 to €42.624 billion ($49.94 billion) in the first half of 2021.
One of the biggest moneymakers at LVMH is Wine & Spirits. Organic revenues for Wine & Spirits grew by 44% during the pandemic. LVMH reported €551 million ($645.91 million) in Wine & Spirits profit in the first half of 2020 and €924 million ($1.083 billion) in Wine & Spirits’ profit the first half of 2021.
Wine & Spirits revenues grew from €1.985 billion ($2.32 billion) to €2.705 billion ($3.17 billion) between the first half of 2020 and the first half of 2021. LVMH estimates organic Wine & Spirit revenue grew by 44% during the pandemic. Management attributes Wine & Spirits’ growth to increased demand for alcohol in the United States and China.
That means LVMH grew during the pandemic. I think LVMH’s financial numbers show luxury brands could be pandemic-resistant.
Sephora Stock Price (LVMH)
LVMH Moët Hennessy Louis Vuitton is a popular stock, and its stock price has risen 401% in the previous five years to 2021. In September 2016, LVMH’s stock price was $151, and now it is over $750 per share.
Investors are bullish on luxury brands after emerging from the pandemic. LVMH’s financial data justify the share price as the company is growing and making more money.
LVMH and other luxury brands are growing because the number of millionaires is increasing. The world’s millionaire population grew from 13.7 million in 2013 to 20.8 million in 2020.
The pandemic did not slow the growth of the millionaire population. The number of millionaires on Earth increased by 6.3% between 2019 and 2020, from 19.6 million in 2019 to 20.8 million in 2020.
More millionaires mean more customers for LVMH Moët Hennessy Louis Vuitton. More people can afford yachts, Louis Vuitton leather goods, champagne, French wine, Christian Dior fashions, and trips to Paris.
Suppose the first-generation millionaires do not buy those luxuries. History shows their children will. LVMH is trying to attract those children’s bossiness by signing contemporary designers. The company hired Japanese streetwear designer Nigo as artistic director of its Maison Kenzo fashion house in September 2021, Marketwatch reports.
LVMH Moët Hennessy Louis Vuitton Dividend
LVMH also issues a regular dividend; its current dividend yield is 1%. LVMH paid a $10.68 dividend per share in 2020, and that looks to increase in 2021, according to Stock Rover.
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LVMH Moët Hennessy Louis Vuitton Alternatives
Today’s stock market offers many interesting alternatives to LVMH Moët Hennessy Louis Vuitton. My favorite LVMH alternatives include:
Hermès (OTCMKTS: HESAY)
Hermès Paris sells high-end home furnishings, leather goods, perfumes, jewelry, cosmetics, toiletries, watches, and ready-to-wear clothes from 306 stores in 45 countries. Hermès also operates an online store that sells many luxury goods online.
Hermès only offers its own brand and concentrates on retail sales, unlike LVMH Moët Hennessy Louis Vuitton. There is no diversification at Hermès, so it is more vulnerable to economic downturns.
One advantage to Hermès is that it has stores all over the world. There are Hermès stores in Europe, China, and the United States. That means Hermès is not as exposed to one market as LVHM and Berkshire Hathaway are.
Hermès is making money and growing. The company reported revenues of €4.325 billion ($5.06 billion), an operating income of €1.722 billion ($2.07 billion), a net profit of €1.174 billion ($1.37 billion), an operating cash flow of €1.487 billion ($1.74 billion), and an adjusted free cash flow of €1.236 billion ($1.45 billion) for the first half of 2021.
Hermès appears to be a cash-rich company. It reported a net cash position of €5.236 billion ($6.13 billion) and restated net cash position of €5.521 billion ($6.46 billion) at the end of the first half of 2021.
Hermès experienced impressive growth in the first half of 2021. They estimate the company grew by 70.2% in the first six months of 2021. Hermès bases this figure on growth at constant exchange rates vs. N-1.The pandemic hurt Hermès’ business; its business shrank by -7.2% in 2020 and -24.2% in the first half of 2020.
Hermès has recovered from the pandemic. Its revenues for the first half of 2021 were larger than the €3.284 billion ($3.84 billion) reported for the first half of 2019. The revenues fell to €2.488 billion ($2.91 billion) in the first half of 2020.
Income and cash flows have also rebounded. Hermès’ operating income grew from €535 million ($625.97 million) in the first half of 2020 and €1.44 billion ($1.68 billion) in 2020. The net profit grew from €754 million ($882.21 million) in the first half of 2019 and €335 million ($391.96 million) in 2020.
The operating cash flow rose from €634 million ($741.80 million) in the first half of 2020 and €971 million ($1.136 billion) in the first half of 2019. The net cash position grew from €3.742 billion ($4.38 billion) in the first half of 2020 and €3.532 billion ($4.13 billion) in 2019.
I think Hermès’ financial data shows luxury is a growing cash-rich business. The share price shows Mr. Market agrees with this assessment. Hermès’ US share price grew from $85.53 on September 28, 2020, to $145.24 on September 27, 2021.
There is a Hermès dividend, but that dividend is shrinking. The dividend will fall from 37₵ on June 7, 2021, to 18₵ on December 7, 2021. They have scheduled another 18₵ Hermès dividend for June 7, 2022. Each Hermès share offered a 74₵ forward dividend and a forward dividend yield of 0.49% on September 27, 2021.
I think Hermès is an interesting stock with some value and a high margin of safety. Hermès is a value investment in luxury goods.
Berkshire Hathaway (NYSE: BRK.B)
There are interesting similarities between Warren Buffett’s enterprise and LVMH Moët Hennessy Louis Vuitton. Both businesses are holding companies that own a diverse assortment of brands.
Berkshire owns companies that manufacture candies, paint, recreational vehicles, boats, buses, trailers, machine tools, and even bricks. A key difference between Berkshire and LVMH is large holdings in insurance, energy, and utilities. Buffett prefers the steady cash flow of float-generating businesses to high-priced luxury goods.
Berkshire Hathaway owns at least three jewelers, however, in a similarity to LVMH. Those companies are Ben Bridge Jeweler, Borsheims Fine Jewelry, and Helzberg Diamonds. Berkshire also owns a leather goods company, bootmaker Justin Brands.
One way to think of LVMH is as France the brand. LVMH Moët Hennessy Louis Vuitton owns many iconic French brands, including Louis Vuitton, Christian Dior, Krug, and the Le Parisian newspaper. LVMH is marketing France, or at least the Hollywood version of France, rather than luxury.
Berkshire owns iconic American brands like Fruit of the Loom, Dairy Quen, Duracell, Kraft Heinz, GEICO, Johns Manville, Benjamin Moore Paints, Brooks Brothers, and See’s Candies, and the Burlington Northern-Santa Fe railroad. Buffett, who is of French descent, often speaks of his faith in America and a long-term belief that America will prosper.
Unlike LVMH, Berkshire owns many brands that cater to America’s middle class. Buffett is as strongly invested in America’s consumer culture as LVMH invests in France’s high culture.
The biggest difference between LVMH and Berkshire Hathaway is Berkshire’s large stock holdings. Berkshire Hathaway holds enormous blocks of stock in such iconic American companies as Apple (AAPL), Kroger (KR), Wells Fargo & Company (WFC), American Express (AXP), and Bank of America (BAC).
Like LVMH, Berkshire Hathaway owned 31 newspapers until January 2020. The New York Times reports that Berkshire sold its newspaper holdings to Lee Enterprises for $140 million in cash. Buffett left the newspaper business because his papers were losing money.
Another similarity between the companies is that Berkshire Hathaway issues two kinds of stock. Berkshire Hathaway Inc. Class A (NYSE: BRK.A) traded at $418,101 on September 24, 2021. Berkshire Hathaway Inc. Class B shares traded at $277.87 on the same day.
The LVMH Moët Hennessy Louis Vuitton SA Unsponsored shares (OTCMKTS: LVMUY) traded at $151.43 on September 24, 2021. The LVMH Moët Hennessy Louis Vuitton official stock traded on the Paris Euronext at €642.90 ($753.49) on September 24, 2021.
Value investors love Berkshire Hathaway because it makes enormous amounts of money. Berkshire reported a quarterly gross profit of $14.301 billion, a quarterly operating income of $38.213 billion, and quarterly revenues of $69.114 billion on June 2021.
Buffett’s company can generate enormous amounts of cash. It reported a quarterly ending cash flow of $60.488 billion on March 31, 2021. The quarterly ending cash flow fell to -$17.656 billion on June 30, 2021. Berkshire reported a quarterly operating cash flow of $10.253 billion on June 30, 2021.
Berkshire Hathaway reported $144.05 billion in cash and short-term investments on June 30, 2021.
Berkshire Hathaway has enormous value. It had $912.493 billion in Total Assets on June 30, 2021. The total assets increased from $788.133 billion on June 30, 2020. The total debt, in contrast, grew from $112.078 billion on June 30, 2020, to $121.042 billion on June 30, 2021.
There are a few limitations to Berkshire Hathaway. Its stock famously pays no dividends, for instance. However, I think Berkshire’s attributes, such as growth and cash, make up for the lack of a dividend.
I consider Berkshire Hathaway an excellent alternative to LVMH Moët Hennessy Louis Vuitton because of its focus on the United States and middle-class consumer brands. Owning both LVMH and Berkshire could be a good way to diversify a portfolio.
Are Luxury Goods a Value Investment?
Luxury goods companies are value investments in today’s world because of growing wealth and rising income inequality. There are more rich people than at any time in history, and those wealthy individuals have more cash to spend.
All investors need to examine luxury goods stocks such as LVMH Moët Hennessy, Louis Vuitton, and Hermès. These companies offer growing revenues and large amounts of cash. Similarly, luxury goods ETFs and Berkshire Hathaway offer both the cash luxury goods offer and diversification.
All investors need to watch the luxury goods market in today’s world because it has become a cash cow. Investors who love cash and high margins of safety need to examine luxury goods companies and their stocks.
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