Kering posts robust Q1 boosted by strong luxury sales

First quarter revenues at Kering totalled 3,573.5 million euros (3,912 million dollars), up 31.2 percent as reported and 28.6 percent on a comparable basis. The company said, revenue generated by luxury activities totalled 2,417.1 million euros (2,646 million dollars), up by 34 percent reported and 31.6 percent on a comparable basis, against a favourable base of comparison.

“Kering achieved a record performance in the first three months of the year, posting a sharp acceleration in sales growth. In a climate of persistent geopolitical and macroeconomic uncertainties, our first quarter puts us in a particularly good position for the balance of the year,” said François-Henri Pinault, Chairman and Chief Executive Officer of Kering in a statement.

Growth boosted by robust performance of luxury segment

Sales growth in the group’s directly operated store network was 36.6 percent on a comparable basis, driven by remarkable performances in Western Europe and the Asia Pacific region, which reported retail sales increases on a comparable basis of 49.9 percent and 46.7 percent, respectively.

Growth in retail sales was also positive in North America and the Rest of the world, up 29.7 percent and 28.1 percent, respectively, on a comparable basis. Online sales rose 60.1 percent on a comparable basis, while wholesale revenue climbed 20.2 percent on a comparable basis.

Revenues at Gucci jumped 51.4 percent as reported and 48.3 percent on a comparable basis, with all regions and product categories contributing to the overall rise. Sales in directly operated stores were up 51.4 percent on a comparable basis, with sharp increases in Western Europe and the Asia Pacific region, up 66.4 percent and 63.1 percent on a comparable basis, respectively.

Bottega Veneta's revenue was up 4.7 percent as reported and 2.3 percent on a comparable basis. The company said, Western Europe, Asia Pacific, and the Rest of the World experienced positive momentum, fuelled by sales to both returning and new customers. Overall, sales in directly operated stores climbed 3.6 percent year on year on a comparable basis.

Yves Saint Laurent revenue was up 35.4 percent as reported and 33.4 percent on a comparable basis. Directly operated stores saw double-digit sales growth in all geographic regions except Japan, with particularly sharp increases in Western Europe (up 46 percent on a comparable basis) and Asia Pacific (up 48.1 percent on a comparable basis). Online sales also grew driven by Western Europe and North America.

Other luxury brands sales rose 12.3 percent

Revenue from the group’s other luxury brands rose 12.3 percent as reported and 11.1 percent on a comparable basis, with all distribution channels contributing to the overall growth. Couture & Leather Goods stores posted an aggregate revenue rise of 11.1 percent on a comparable basis, boosted by Balenciaga's directly operated store network across all geographic regions and all product categories. Stella McCartney and Alexander McQueen achieved further growth in the period, while Brioni’s sales in directly operated stores trended upwards again.

Revenue from Watches & Jewellery Houses climbed 13.1 percent on a comparable basis, with good performances at Boucheron and Pomellato. Revenue generated by Sport & Lifestyle activities advanced 16.5 percent as reported and 14 percent on a comparable basis, fuelled by an excellent performance from Puma, which reported record quarterly revenue of 1,008.9 million euros (1,104 million dollars). All geographic regions except Japan registered double-digit sales growth and footwear was the leading product category, with sales up by 24.8 percent on a comparable basis. However, Volcom’s sales continued to be weighed down by the difficulties experienced by specialist distributors in the US, despite a solid showing from the directly operated store network.

For the first time, Kering Eyewear – whose operation of the Gucci license for sunglasses and frames has been effective since January 2017 – is accounted for under Corporate and other. Kering Eyewear's total sales, before elimination of intra-group sales and royalties received by the brands, amounted to 112.9 million euros (123 million dollars) and net revenue for the period totalled 85.5 million euros (93 million dollars).

Picture:Kering website