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Gucci-fever boosts Kering's fourth-quarter sales growth
[PARIS] Luxury goods group Kering on Tuesday posted better-than-expected sales growth in the fourth quarter, as its Italian fashion label Gucci confirmed its status as one of the industry's star performers in 2017.
Along with peers in the luxury goods industry including French rival LVMH, Kering benefited from a strong bounceback in demand from Chinese consumers at home and overseas last year, while rising online sales have also propelled growth.
Kering, which also owns Yves Saint Laurent, has especially reaped the rewards from an overhaul at Gucci over the past two years. In January it said it would spin off its sportswear brand Puma to focus more squarely on its luxury brands.
Overall revenues at Kering rose to 4.26 billion euros (S$6.95 billion) in the fourth quarter, up 27.4 per cent year-on-year on a comparable basis, which strips out acquisitions and currency swings.
That marked a slight slowdown from the 28.4 per cent growth notched up in the previous three months but beat a 24.3 per cent analyst poll by Inquiry Financial.
"Kering delivered a phenomenal year in 2017," Chairman and Chief Executive Francois-Henri Pinault said in a statement, adding that the global environment remained uncertain but that Kering could do "much better than our markets" in 2018.
Momentum at Gucci, which was reinvented with a flamboyant new look under designer Alessandro Michele, also eased a little yet remained well above that of most major rival brands, with comparable sales growth of nearly 43 perc ent in the quarter.
Kering financial director Jean-Marc Duplaix told journalists that the group's Balenciaga label, for which it does not break out earnings, posted higher growth than Gucci in the second half of 2017.
Kering posted a 56.3 per cent rise in adjusted operating income to 2.95 billion euros for 2017 as a whole, also beating forecasts, while full year revenues rose 27.2 per cent on a comparable basis to 15.48 billion euros.