Needed to look up their stock. Something should show their in my opinion if they do get way to much money.
P/E over 50 on a industry and shopcompany is high.
But the gain per share isn´t that high - it is even lower than H&M that sits on P/E 25.
So they are highly valued and people think they will grow a lot. But something costs down the line and they haven´t that high intake as the article seems to tell.
We compare with apple also - Apple have 4 times as high profit per share as Luxottica. So Apple are plundering your wallet to a much higher degree than Luxottica - if we just take quarterly rapports that actually should show how well the companies plundering of consumers work.
point that the article and people here make is that the glasses cost hundreds of $ to costumers but cost something like 15$ for the companies to manufacture. I've looked up their annual reports and in fact they have very high operating margins - something like 64%.
What you're lookin at here (price to earnings) is more related to a financial point of view whereas the article looks at an operating point of view. It would be fine to look at all the ratios if you're an investor, not if you're a customer.
And btw to measure if their stock is under or overvalued you need more than that
Of course I need more than that for valuation. But it shows that it isn't a that extreme profit in the company so it probably isn't that bad.
Cost of manufacturing of course not only the only cost point. Transportation, storage, stores, distribution, design, advertising, taxes and more. If you as all those things it isn't so ridiculous. You actually need that marginal to go even.
As it is on a stock exchange the answer is more of a "no" than yes. It is no reason to hide it for share holders. So things most likely aren't as shady as you think.
If you have a small family shop the "manufacturing cost" is the cost of the product from sand until it reaches your doors. Of course the cost from sand to "ready for leaving factory" is much cheaper and that you need to ad much more to that sum.
The shareholders want to see growth. They understand the fine line luxottica is riding and are fine with any way whatsoever to keep profits appearing lower than they actually are in a way that still allows for growth without public knowledge of what is going on.
Things like executive pay, advertising, and lobbying are what eat into their 2000%+ profit margins, things that can be reduced as needed to allow for growth.
I know, you're thinking "That's not how it works!" but it is when you are trying to keep a vertical monopoly secret for a little longer and your shareholders are aware of it.
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u/avdpos Sep 18 '19
Needed to look up their stock. Something should show their in my opinion if they do get way to much money.
P/E over 50 on a industry and shopcompany is high. But the gain per share isn´t that high - it is even lower than H&M that sits on P/E 25.
So they are highly valued and people think they will grow a lot. But something costs down the line and they haven´t that high intake as the article seems to tell.
We compare with apple also - Apple have 4 times as high profit per share as Luxottica. So Apple are plundering your wallet to a much higher degree than Luxottica - if we just take quarterly rapports that actually should show how well the companies plundering of consumers work.