Question

Use Bloomberg or Google Finance or Yahoo Finance, etc. generate a 10-year (Feb 1, 2009 to Feb 1, 2019) stock price comparison chart for Kering and Moet Hennessy Louis Vuitton SA (LVMH).

(a) whose performance is higher over the whole period

(b) whose is higher in the last five years

(c) the periods during which their performance was tightly-coupled and

(d) the point at which performance decouples. Finally, can you point to any specific strategic actions by Kering that might have led to the decoupling?

Answer 1

Please find answer as below:

a) As per share price comparison Kering share price has improved drastically over 10 years and even dividend also consistent and average dividend is higher than LVMH. Hence. Kering performance is higher in the whole period.

Share Price
Date	LVMH Close	Kering Close
28-02-2009	47.290001	44.8736
28-02-2010	86.540001	91.615303
28-02-2011	111.699997	100.518997
29-02-2012	128.850006	119.898003
28-02-2013	133.899994	159.307007
28-02-2014	131.949997	137.604004
28-02-2015	164.149994	168.973007
29-02-2016	150.5	163.199997
28-02-2017	205.850006	225.343994
28-02-2018	250.199997	361.368011

Dividend (Yr)	LVMH Dividend per share	Kering Dividend Per share
2009	1.6	3.3
2010	2	3.3
2011	2.2	3.5
2012	2.9	3.5
2013	3	3.75
2014	3.15	3.75
2015	3.3	4
2016	3.6	4
2017	4.2	4.6
2018	5.4	6
AVG DIV	3.14	3.97

b) In last five years Kering's performance is better.

Share Price
Date	LVMH Close	Kering Close
28-02-2014	131.949997	137.604004
28-02-2015	164.149994	168.973007
29-02-2016	150.5	163.199997
28-02-2017	205.850006	225.343994
28-02-2018	250.199997	361.368011
Dividend (Yr)	LVMH Dividend per share	Kering Dividend Per share
2014	3.15	3.75
2015	3.3	4
2016	3.6	4
2017	4.2	4.6
2018	5.4	6
AVG DIV	3.93	4.47

c) Between 2009 and 2012, if you observe from the above tables, their performances were overall in a competition, and was tightly coupled.

d) From 2013 onwards, Kering performance started improving a lot, and surpassed LVMH.

It took over Gucci to improve the market share.

It assesses all new suppliers for adherence.

It has introduced a vendor rating system to evaluate supplier's performance.