Kering Tops Forecasts as Gucci Sales Jump 49 Percent
The Paris-based luxury group reported another quarter of strong revenue growth, with comparable sales up 37 percent.
PARIS, France — Kering’s white-hot Gucci brand kept up its relentless growth pace at the start of the year, with online sales more than doubling in the first quarter. The Paris-based luxury group’s comparable sales grew 37 percent in the period, according to a statement Tuesday after markets closed. Analysts had expected a 23 percent increase. Designer Alessandro Michele’s crystal- and flower-coated reboot of Gucci has won over young luxury shoppers, and the brand’s comparable sales rose 49 percent in the latest quarter. Kering’s Saint Laurent and the division that includes fast-growing Balenciaga and Alexander McQueen also grew by double-digit percentages. “We delivered a remarkable performance in the first quarter and are confident that our brands can outperform the market in the remainder of the year through innovation,” chief financial officer Jean-Marc Duplaix said on a call with reporters. Surging Chinese demand for luxury goods has also lifted the fortunes of companies like LVMH, the owner of Louis Vuitton and Dior, and L’Oréal, whose high-end division sells Lancome makeup and Armani perfumes. With shares in Kering up more than 70 percent over the past 12 months, investors are watching to see how long flagship brand Gucci can maintain its rapid growth. The latest results show that this year’s collaborations with hip artists and a runway show in which models carried props like prosthetic heads and baby dragons are doing the trick. Kering sped up progress toward becoming a luxury-only group this quarter when it announced plans to spin off its shares in German sportswear maker Puma, as well as putting the skateboarding label Volcom up for sale. The company also unwound its joint venture with Stella McCartney’s fashion brand, selling its 50 percent stake back to its namesake.