(News Bulletin 247) – Like many CAC 40 groups since the beginning of this year, the luxury giant will buy back securities over a period that will run until July 20.

The French luxury giant LVMH announced on Wednesday its intention to buy back up to 1.5 billion euros of shares, with a view to canceling them, a strategy that is popular among large groups that have recorded record profits.

“As part of its share buyback program, LVMH Moët Hennessy Louis Vuitton SE (LVMH) has today entrusted an investment services provider with a mandate to acquire its own shares for a maximum amount of ‘one billion five hundred million euros’, the group said in a brief press release.

The repurchase period will go until July 20 and “the shares thus repurchased are intended to be canceled”, specifies LVMH without giving more details.

Popular share buybacks

Share buybacks are “extremely popular with shareholders,” Quincy Krosby of US asset manager LPL Financial told AFP; “typically, the immediate reaction is that the stock price goes up”. Concretely, by reducing the number of shares, the cancellation operation reinforces the share of the shareholders in place.

LVMH is 41% owned by the Arnault family’s intermediary holding company, Christian Dior SE.

Around 11:35 a.m., LVMH shares rose 2.12% to 805.70 euros, in a market up 0.43%.

In 2022, share buybacks almost doubled compared to 2021, according to a BNP Paribas report, to some 161 billion euros in 11 European countries.

The world number one in luxury broke new records in 2022, with astronomical sales of nearly 80 billion euros and profits which took off again, to 14 billion euros (+ 17%).

LVMH, which has paid 5 billion euros in corporate taxes worldwide, will pay 400 million euros in profit-sharing and participation to its approximately 39,000 French employees as well as 12 euros per share for 2022. A total of some 6 billion euros, of which nearly 3 billion go to the family of CEO Bernard Arnault.

According to asset manager Janus Henderson, LVMH has become the second largest French dividend payer in 2022, after TotalEnergies.

(With AFP)