Kering reports strong quarterly sales as Gucci revival hopes rise

Update of Kering SA

Kering announced better-than-expected quarterly sales in the tentative signs of a resurgence at its largest brand, Gucci. This is the latest evidence that luxury sector leaders have boosted the pandemic.

French group dominated by billionaires Pinault family Second-quarter sales are reported to be € 4.16 billion due to the surge in wealthy consumers. This is above analysts’ consensus of € 3.8 billion, showing comparable growth of 11% from the same quarter of 2019.

This was slightly worse than the 14% comparable sales growth reported on Monday. Larger rival LVMH, Its biggest brand Louis Vuitton is in tears.

Kering’s positive momentum is welcomed by investors who have been worried not only about the impact on demand for Covid-19 last year, but also about Gucci’s slowdown after five years of strong growth driven primarily by Chinese and young buyers. May be done.

Gucci’s second-quarter sales were € 2.3 billion, an increase of 82% from last year’s valley, when the blockade was fully implemented, and an increase of 1% from the same period in 2019. first half It was still 10 percent lower than the pre-pandemic level.

Kering promised This year’s turnaround in Gucci was accompanied by strong marketing power behind the star brand led by creative director Alessandro Michele.

Gucci also lowered its “brand heat” readings on social media, saying analysts weren’t noticed by consumers because there were fewer fashion shows than Louis Vuitton and Dior last year.

This year, Kering promised a busy schedule of shows, in-store promotional events and online campaigns to commemorate Gucci’s 100th anniversary.

“Gucci has strengthened its position in the United States and mainland China with remarkable success with high-end clients,” financial officer Jean Marc Duprez said in a phone call with analysts.

“The calendar should be even more intense in the second half with the acclaimed Aria collection on the shelves in September,” he added. design From Michele, which premiered in Shanghai in April.

In the first half of the year, Kering’s operating profit was € 2.2 billion with a margin of 27.8%.

“We are firmly back on a profitable growth trajectory and some brands are above pre-pandemic levels,” Dupre added.

The largest groups of luxury are primarily LVMH, Hermes, Kering, Richemont and privately held Chanel. Shrug Challenges raised by the Covid-19 crisis.

They have adapted to the turmoil of traveling abroad, and Chinese consumers, who are spending heavily, are no longer able to shop in Europe. Instead, they sold more in China, relied more on e-commerce, and benefited from the power of the US market.

Analysts predict that Refinitiv predicts that the four listed groups will exceed 2019 revenues as early as this year. This will be a much faster recovery than it was originally. I am afraid..Small groups such as Burberry, With Salvatore Ferragamo Tod’s I am recovering more slowly.

Kering shares have so far risen 23 percent this year before the results on Tuesday. This did not reach a 31% increase in LVMH and a 44% increase in Hermes.

Bernstein analyst Luca Solca notes that even if Kering lags behind LVMH in growth and profits, it has shown “a strong rebound, and more in the future.”

“Nevertheless, the outlook for this sector is still good, and the situation in Kering and Gucci is likely to be reviewed in the second half of the year, so we can’t expect a significant stock price revision.”

Separately on Tuesday, Italian luxury group Moncler, known for its luxury coats, reported second-quarter sales of € 200 million, 5% above 2019 levels.

Kering reports strong quarterly sales as Gucci revival hopes rise Source link Kering reports strong quarterly sales as Gucci revival hopes rise

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