Gucci’s 42.8 percent sales growth boosts Kering’s Q3

Wednesday, October 25 2017

Gucci’s 42.8 percent sales growth boosts Kering’s Q3

For the third quarter of 2017, Kering’s revenue of 3,925 million euros (4,615 million dollars), increased 23.2 percent as reported and 28.4 percent on a comparable basis. The company’s luxury activities reported a strong third-quarter with sales up 32.3 percent on a comparable basis, particularly Gucci, which posted a growth of 49.4 percent on a comparable basis and Yves Saint Laurent posted an increase of 22.2 percent on a comparable basis.

“Thanks to flawless execution of our strategies, at group level as well as in each of our brands, we delivered another quarter of outstanding growth. We will keep concentrating on organic growth, value creation and strict financial discipline. Facing unfavorable currency impacts and a tougher base of comparison, we remain fully confident in Kering’s ability to achieve a record year, fuelled by sector-leading growth,” said François-Henri Pinault, Chairman and Chief Executive Officer in a statement. Gucci supports robust sales growth of luxury segment

Kering's luxury activities enjoyed another period of very strong growth in the third quarter, with revenue up 26.6 percent as reported, and 32.3 percent based on a comparable group structure and exchange rates, to stand at 2,677.8 million euros (3,148 million dollars). The company said, acceleration in luxury sales was driven by Kering's network of directly operated stores, up 36.8 percent on a comparable basis. Online sales expanded by nearly 80 percent. Wholesale distribution posted a growth of 21.7 percent, with substantial contributions from Gucci, Yves Saint Laurent and Balenciaga.

Gucci revenues rose 42.8 percent as reported and 49.4 percent on a comparable basis to 1,553.8 million euros (1,827 million dollars). Now accounting for 82.7 percent of Gucci revenue, sales in directly operated stores increased 50.9 percent and across all nationalities and regions. All product categories enjoyed double-digit growth, from men's and women's collections, and from established and new lines. Online sales posted triple-digit growth. Wholesale increased 43.9 percent in the quarter.

Sales for Bottega Veneta came in at 280.7 million euros (330 million dollars), down 4.5 percent as reported and up 0.9 percent on a comparable basis. Accounting for 84.5 percent of the total, sales across the directly operated network increased 2.8 percent on a comparable basis and were driven by all key product categories. Kering added that ready-to-wear and shoes – men's and women's – confirmed the positive trends seen in recent quarters, and the increase in revenue for leather goods reflected the success of its new collections. The maison also continued to adapt its network of stores to reinforce its exclusive positioning.

Yves Saint Laurent kept up its very strong growth momentum in the third quarter with sales for the period amounting to 383.7 million euros (451 million dollars), up 17.7 percent as reported and 22.2 percent on a comparable basis. Revenue generated by directly operated stores rose 21.1 percent on a comparable basis, fuelled by all key regions, and wholesale increased 23.4 percent. Online sales also continued to grow.

At 459.6 million euros (540 million dollars), revenue for Kering’s other luxury brands was up 13 percent as reported and 17 percent on a comparable basis. For couture & leather goods, the strong 19.3 percent increase in sales on a comparable basis, notably in directly operated stores, was led by an excellent performance from Balenciaga. Ready-to-wear and shoes fared well across all regions. Demna Gvasalia, which recently opened a new flagship store on Avenue Montaigne in Paris, received positive feedback to its latest collection. All other couture & leather goods brands saw an increase in sales in their directly operated stores.
Luxury Jewellery brands Boucheron, Pomellato, Dodo and Qeelin performed well, both across their directly operated networks and in wholesale distribution channels. Watchmakers enjoyed encouraging growth over the quarter with new models launched by Girard-Perregaux and Ulysse Nardin receiving positive response in Western Europe and the Middle East. Puma’s strong performance boosts sports & lifestyle category

Sport & lifestyle activities, the company said, continued on their growth trajectory, with revenue advancing 11.9 percent as reported and 15.9 percent on a comparable basis.
Puma delivered another excellent performance for the quarter, with double-digit growth on a comparable basis across all key regions. Revenue for the brand rose by 13.2 percent as reported and by 17.3 percent on a comparable basis to 1,125.7 million euros (1,323 million dollars). The brand also fared well in all distribution channels, with growth across all product categories, notably shoes category reporting 23.2 percent rise on a comparable basis) and accessories rising 23.8 percent on a comparable basis.

Conversely, the company added, Volcom's performance continued to be hampered by the challenges faced by specialist distributors in the US.
Picture:Gucci website