Gucci Parent Company Kering’s Q2 Revenues Rise, Helped by Brand’s Outstanding Performance
PARIS — Kering continued to strongly outperform its luxury-sector peers in the second quarter, with revenues rising 25.4 percent, helped by another outstanding performance from Gucci.
The French conglomerate on Thursday reported net income surged 77.6 percent in the first half to 826 million euros ($964 million). Recurring operating income jumped 57.1 percent to 1.27 billion euros, with the operating margin reaching 17.5 percent, up 330 basis points versus the same period a year earlier.
Group sales totaled 3.72 billion euros in the three months through June 30, with the parent of Yves Saint Laurent, Brioni and Boucheron reporting “extremely strong” sales growth in both mature and emerging markets during the first six months of the year. In organic terms, revenues were up 24.6 percent in the second quarter.
“Thanks to the execution of our strategy, we achieved outstanding revenue growth in the first half, clearly outperforming the sector, and delivered record profits and operating margins,” François-Henri Pinault, chairman and CEO of Kering, said in a statement published after the market closed.
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“This excellent first half raises our confidence in the group’s capacity to realize another year of growth and improved operating performances,” he added.
Gucci, which accounts for more than a third of Kering’s revenues, has undergone a reinvention at the hands of creative director Alessandro Michele and CEO Marco Bizzarri.
Organic sales at the maker of Dionysus handbags and Princetown loafers rose 39.3 percent to 1.48 billion euros in the second quarter. This compared with 48.3 percent organic revenue growth in the first quarter of this year and with a 7.4 percent increase in the second quarter of 2016.
Gucci’s recurring operating income rose 69 percent in the first half, while operating margin increased by 440 basis points to 32 percent.
Sales in directly operated Gucci stores were up 46.2 percent at constant exchange rates, despite a slight reduction in the number of stores compared with the same period last year, while the brand’s online sales progressed by more than 60 percent in the first half.
“Alessandro Michele’s creative vision continued to meet with success among customers and distributors, consolidating Gucci’s leading position in the world of fashion and luxury,” Kering said, reporting robust demand for leather goods, women’s and men’s ready-to-wear and shoes.
The luxury division as a whole — which also includes brands such as Bottega Veneta, Balenciaga and Alexander McQueen — saw revenues increase 25.3 percent in organic terms. The sports and lifestyle division, which revolves around Puma, posted a 14.7 percent rise.
The figures come on the heels of a 15 percent rise in revenues at LVMH Moët Hennessy Louis Vuitton in the second quarter. Burberry reported retail revenue rose 13 percent in the period, while Hermès International said sales increased 9 percent.
