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Investing in Nike, Zara, LV, Dior: Risk & Return Analysis

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Introduction
It's no wonder when we are thinking of growing businesses, making more wealth we think of
investing, as it’s one of the biggest steps to attain it. There are plenty of ways to invest but all
these invests we make, we want to know clearly how to track our money when we invest, what
will happen to it and all its risks in order to be able to invest in a smarter way. Due to the
increased amount of National and international corporations it has become very difficult to
recognize which companies to invest in comparing to each-other. Therefore, in this paper four
multinational corporations (Nike, Zara, Louis vuitiion, Dior) were selected. The reason why
these companies were chosen will be mentioned including a brief explanation of risk, return,
standard deviation and which will show which company is better to invest in comparing to each
other.
Nike
Nike, Inc., formerly (1964–78) Blue Ribbon Sports, American sportswear company
headquartered in Beaverton, Oregon. It was founded in 1964 as Blue Ribbon Sports by Bill
Bowma, a track-and-field coach at the University of Oregon, and his former student Phil Knight.
They opened their first retail outlet in 1966 and launched the Nike brand shoe in 1972. The
company was renamed Nike, Inc., in 1978 and went public two years later. By the early 21st
century, Nike had retail outlets and distributors in more than 170 countries, and its logo—a
curved check mark called the “swoosh”—was recognised throughout the world.
Mark Parker served as NIKE, Inc. Chairman, President & CEO for 14 years, Chairman for four
years, and continues to serve as Executive Chairman. Mark joined Nike in 1979 as one of the
company’s first footwear designers and has been at the centre of Nike innovation ever since How
Nike engage costumers and investors:
One of the most effective ways that Nike engages with its consumers, is by a post where every
follower can share a picture of them wearing their favourite Nike trainer, which then can be
featured on Nike’s feed or wall. This simple move by Nike can boost their brand image even
more, by engaging with followers by direct contact
SD=1.30%
Why should I invest in Nike?
There are many reasons why someone might choose to invest in Nike Inc. (NYSE: NKE).

The company is a global powerhouse in the athletic apparel and footwear industries and
has a long history of successful innovation and brand building.

Nike has a strong track record of profitable growth. Over the past 10 years, Nike has
grown its revenues by an average of 10% annually. Profits have grown even faster, with
average annual growth of nearly 15% over the same period. This growth has been driven
by the company’s relentless innovation and expansion into new markets.

Nike is a well-recognized brand with a loyal following. The company’s iconic “swoosh”
logo is one of the most recognized in the world, and Nike enjoys a high level of customer
loyalty. This strong brand equity gives Nike a competitive edge in the marketplace and
helps to drive sales and profits.

Nike is a well-managed company with a strong balance sheet. The company has a long
history of disciplined financial management, and its balance sheet is very strong. This
gives Nike the ability to invest in future growth opportunities and to withstand bumps in
the economy.
All of these factors make Nike a compelling investment candidate. The company has a strong
track record of growth, a well-recognized brand, and a sound financial foundation. These are all
qualities that investors should look for in a good stock.
Dior
Dior is among the biggest luxury brands in the world, making a range of predicts from wearables
to perfumes. It is a French company that was founded in 1946 by Christian Dior who was
originally from Normandy. Through time they have been among a few companies that have
passed the test of time, and has remained desirable at all time, from the start till this day.
Through times, their designs have influenced the industry as a whole and they have always come
out with unique and innovative designs that have inspired everyone that is interested in the
sector.
A luxury brand is ulcerous not just because they sell expensive products, but because they sell
high end quality products. The main reason that Dior has always seen as a luxury brand, and a
good one at that, is that their products have always maintained a quality standard, meaning that
have never gone below a certain standard, moreover they have always made the quality higher
and higher and not the opposite. It gives the costumers a scene that they are actually getting a
product that is worth the price that they paid.
STD DEV Return
0.074908158
Why invest in dior?
Dior is among the few brands that we will be certain will exist and always be on the top, and
famous in the future. Meaning that if the investor does invest in this company, they know no
matter what happens, the brand will most likely survive, because if there is one thing that the
costumers of this brand have, is loyalty. Not everyone can or do buy these products, but when
they do, they will come back. So, the investor gets a peace of mind that the brand will always be
there, and be on the top at that.
Also, the more that we look into their stock price, the more tempting it gets to invest in this
company. If we take a look at the historical prices, they are on an annual steady increase. Each
year they score higher prices than the one before. And that has remained for years now. Meaning
that most likely next year and the one after, their stock price will most likely be higher according
to the historical data that we have on hand.
Louis vuttion
Louis Vuitton is the world's most significant luxury bag and accessory brand. It was founded in
the year 1854 in France, Europe. The Louis Vuitton company is a well-known multinational
brand named after its founder and designer, Louis Vuitton. LV built its first international store in
London in 1885. The company increased its product portfolio by expanding its leather craftwork
and design to small leather products. By the mid-1970s, Louis Vuitton had surpassed Chanel as
the world's leading luxury brand in market share. LV joined the Japanese market in 1968 and
immediately became the most famous luxury brand in the country.
Louis Vuitton because it is a leading company in high-quality products, with a
portfolio of more than 60 well-known brands. The Company operates in five industry sectors:
Spirits and Wine, Fashion and Leather Accessories, Perfumery, and Cosmetics.
Mr Racamier, the company's chairman, teamed up with Moet Hennessy to form the
Moet Hennessy Louis Vuitton group in 1987. Henri Racamier invited Bernard Arnault, one of
the wealthiest men in the world, according to Forbes (2017), to invest in LVMH. Arnault has
been the chairman and CEO of Louis Vuitton-Moët Hennessy (LVHM) since 1989. The primary
customer of LV products consists of persons with large disposable incomes.
The mission statement of LV is to " embody unique savoir-faire, a thoughtfully preserved
heritage, and deep involvement with modernity, to depict one of most refined qualities of
Western "Art de Vivre" around the globe; be associated with elegance and creativity; combine
tradition with innovation, and awaken dream and imagination." Throughout its brand's mission,
they have remained true to its core values.
According to the LV vision statement, "LV has always maintained a family culture
that values long-term vision." The company aims to help each of its Houses prosper while
maintaining originality and independence. All LVMH employees recognize Bernard Arnault's
three core concepts. These three concepts propel productivity and lay the groundwork for
performance and long-term success. Louis Vuitton has maintained its leadership in this
competitive market by remaining inventive and recruiting the most incredible team the company
can produce. The executives monitor and regulate all parts of the organization.
Figure 2 (Adj Close)
Figure 1 ( Returns)
STD DEV Return
0.150161
Why should I invest Louis Vuitton
Louis Vuitton products are designed for wealthy people who value quality, style,
and design. Millions of dollars were lost in the luxury goods industry.
l The global recession sent luxury markets into a spiral except for Louis Vuitton (LV) and
Chanel.
l The Louis Vuitton brand maintained its number-one position for the tenth consecutive
year. This year's profitability has increased.
l Despite the worldwide economic downturn, Vuitton is doing well. While competitors have
struggled through a downturn in recent years, it has maintained sales growth and the
industry's top operating margins. LVMH Moet Hennessy Louis Vuitton (LVMH)
reported revenue of €18 billion
($19.49 billion) in the first quarter of the fiscal year 2022. This marks a 29 per cent gain.
LVMH's organic revenue climbed by 23 per cent during the quarter, driven by double-digit
revenue growth in all of its business segments except Wines & Spirits.
The company also saw double-digit revenue growth in the United States and Europe, while its
Asian business grew despite stiffer Covid-19 limitations. LVMH's Fashion & Leather Goods
division reported a 35% increase in revenue to €9.12 billion and a 30% increase in organic
revenue over the previous year.
Zara
In 1975, Amancio Ortega established Zara. The company's present offices are in A Corua,
Galicia, Spain, which is also the location of his first store. The character was originally named
Zorba, but when he realized a restaurant with the same name might be found two blocks away,
he changed it to Zara. The film Zorba was adapted from the popular 1964 movie Zorba the
Greek. The extra an is believed to have originated from a second set of letters that were
specifically designed for the company. It offered cheap imitations of well-known, high-end
styles. He expanded his business in Spain. He modified design, production, and distribution
procedures in the 1980s to better suit emerging fashions he dubbed "instant fashions" and to
make use of information technology and design teams rather than lone designers.
And about zara’s products Men, women, and children can all shop for clothing at Zara stores
(Zara Kids). Zara Home products are sold in stores across Europe. Customers of Zara are
typically female and between the ages of 18 and 35. After they are designed, items take 10 to 15
days to reach retailers. At the Spanish distribution center, all the clothing is processed. Items that
have recently arrived are inspected, sorted, and labeled before being loaded into trucks.
Frequently, the clothing arrives within 48 hours. Every year, Zara produces close to 450 million
items. In addition to clothing and accessories, Zara also sells shoes, swimwear, and fragrances.
In May 2021, Zara Beauty, the brand's first line of cosmetics, was introduced.
About stores, 2007 Zara stores may be found in 96 different countries. Early in 2020, the
COVID-19 pandemic led to regulations that necessitated the temporary closure of ZARA stores
all around the world. However, once China's ban ended in April 2020 after 76 days, the owner of
ZARA expanded export to Asia.
Also, the improving In Zara's business strategy, vertical integration is prioritized over other
forms of diversification. Within two weeks of the original design's debut on catwalks, it adapts
couture designs, produces, distributes, and sells them as apparel. And about Zara's Three Success
Factors: Speed, Speed, and Speed.
Zara company standard deviation
E R=-0.003842211
S.D=4%
Variance=0.001248335
Why should I invest in Zara?
The success of fast fashion has been a hot topic in recent times. H&M, Uniqlo, Cos and a whole
host of other high street retailers now bring catwalk high-fashion designs to everyday shoppers
on tight timescales, be they in mid-western shopping malls, British high streets or European town
squares. Zara, owned by the Spanish Inditex Group, is the most successful of them all.
Fast fashion asks that certain trends make it from ready-to-wear fashion showcases to customers;
the ephemeral nature of fashion trends mandates that this be achieved as quickly as possible.
This is where Zara, with its highly responsive supply chain, excels. Although the company’s
flexible supply chain means its price points are slightly higher than its competitors, it allows it to
be the most responsive to changing fashion trends.
ANALYSIS
Looking at these different multinationals corporations theres a lot of difference between how
each company is growing, returning investment, risks and standard deviations s. Based on this
information and the analysis ahead we can clearly see which compnay is the best to invest in
eventually. In our analysis Revenue can be defined as the amount of money a company receives
from its customers in exchange for the sales of goods or services. Revenue is the top line item on
an income statement from which all costs and expenses are subtracted to arrive at net income.
NIKE annual/quarterly revenue history and growth rate from 2010 to 2022.

NIKE revenue for the quarter ending August 31, 2022 was $12.687B, a 3.58% increase
year-over-year.
NIKE revenue for the twelve months ending August 31, 2022 was $47.149B, a 2.07%
increase year-over-year.
NIKE annual revenue for 2022 was $46.71B, a 4.88% increase from 2021.
NIKE annual revenue for 2021 was $44.538B, a 19.08% increase from 2020.
NIKE annual revenue for 2020 was $37.403B, a 4.38% decline from 2019.
Christian Dior S.E annual/quarterly revenue history and growth rate from 2018 to 2021.

Christian Dior S.E revenue for the quarter ending December 31, 2021 was $M, a NAN%
increase year-over-year.

Christian Dior S.E revenue for the twelve months ending December 31, 2021 was $0M,
a NAN% increase year-over-year.

Christian Dior S.E annual revenue for 2021 was $75.973B, a 48.95% increase from 2020.

Christian Dior S.E annual revenue for 2020 was $51.005B, a 15.15% decline from 2019.

Christian Dior S.E annual revenue for 2019 was $60.11B, a 8.7% increase from 2018.
Louis Vuitton annual/quarterly revenue history and growth rate from 2011 to 2021.

Louis Vuitton revenue for the quarter ending June 30, 2021 was $M, a NAN%
increase year-over-year.

Louis Vuitton revenue for the twelve months ending June 30, 2021 was $0M, a NAN%
increase year-over-year.

Louis Vuitton annual revenue for 2021 was $75.973B, a 48.95% increase from 2020.

Louis Vuitton annual revenue for 2020 was $51.005B, a 15.15% decline from 2019.

Louis Vuitton annual revenue for 2019 was $60.11B, a 8.7% increase from 2018.
Zara
The company reported net profit of 760 million euros ($812 million) for the quarter to end April,
in line with analysts' expectations. Sales rose 36% to 6.7 billion euro.
These are 4 years' monthly prices of Zara company. Based on these data, we can expect the
return of next month, which is -0.0038, meaning that in the next month we are not expecting to
make profit. Standard deviation measures the risk of stock based on the monthly returns. Here
we have %4 which means the stock is not risky in purpose of investing in this stock.
Investors should anticipate receiving around 50% of the return as dividends and the remaining 50
% as price growth due to higher free cash flows.
Because of its 4.15% dividend yield, the stock appears to be a solid choice for dividend and bala
nced investors.
The company appears to be 10% less risky than the market portfolio due to its defensive product
line, diversified product portfolio, 7% debt to market value of capital, and risk related to the gar
ment industry. Future developments, however, must be taken into consideration, and there are
two major dangers that could have an effect on the company.
CONCLUSION
To conclude our finding we can see that there ares a clear view of the four companies and their
plans, returns and standard deviations including the revenues of each company over the years
Dior and Louis vuttion are the best performers amongst other companies. Due to the increased
sales of Dior over the years it shows that its profits are increasing and makes it the best amonst
other companies to invest in. Due to the high end designs and quality and constant sales over the
years it’s a good investment
References
D.Ç. (2017). Who Got Richer In 2017? Here Are The Biggest Billionaire Gainers. Forbes.
https://www.forbes.com/sites/denizcam/2017/12/18/the-biggest- billionaire-gainers- 2017-BezosZuckerberg-Ambani/?sh=70e0a2cc44b5
Christian Dior S.E Financial Statements 2017-2022 | CHDRY. (n.d.).
MacroTrends. https://www.macrotrends.net/stocks/charts/CHDRY/christian-dior-se/financialstatements
Louis Vuitton Revenue 2011-2021 | LVMUY. (n.d.).
MacroTrends. https://www.macrotrends.net/stocks/charts/LVMUY/louis-vuitton/revenue
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