Differences in luxury

Not all luxury companies are being run the same way

There is one company which owns some significant luxury brands;

whose net debt amounts to 41% of its market capitalisation,

has increasing inventories and now equal to 23% of its annual revenue;

where its receivables are rising,

its net interest expense soaks up 15% of its EBIT.

and 82% of its net income leaves the corporation, in the form as dividends.

It’s one thing to suggest weaker business conditions as a result of slowing consumer demand, but when quickly looking at the ‘numbers’, it’s easy to understand why the stock price has halved over the past 18 months.

It’ll be cheap at some point.