PARIS/MILAN, Oct 22 (Reuters) - French luxury group Kering
confirmed a broad recovery in sales of high-end goods
in the third quarter as strong Asian and U.S. demand helped
revenues improve, though its star Gucci brand underperformed
Kering, which also owns Saint Laurent, beat market
expectations with comparable sales nearly unchanged in the third
quarter from a year earlier.
Like-for-like sales, which strip out the impact of foreign
exchange and acquisitions, dropped by 1.2% in the three months
to September, compared with analyst forecasts for an 8% to 13%
fall and after plummeting nearly 44% in the previous quarter.
Like rivals such as Birkin-handbag maker Hermes
and Louis Vuitton owner LVMH, Kering was hit hard by
store closures during coronavirus-related lockdowns.
Gradual re-openings have helped sales pick up, even though
new restrictions are now being imposed across Europe to contain
a spike in case numbers.
Kering struck a cautious note about the coming months, with
Financial Chief Jean-Marc Duplaix saying the outlook remained
He added that Gucci had done very well in the United States,
where it gained market share, and in the key Chinese market, but
had still been penalised by global travel restrictions.
"Gucci has perhaps suffered more than others from the lack
of tourist flows," Duplaix told reporters.
Comparable sales at Gucci, one of the fastest-growing luxury
brands of recent years, fell 8.9% in the period, while all the
group's other fashion labels grew. Bottega Veneta had a
particularly strong performance, with sales rising 21%.
Gucci accounts for nearly 60% of Kering's revenues and
investors are keeping a close watch on the extent to which it
could lose steam after a hugely successful, quirky makeover
under designer Alessandro Michele.
Analyst questions during an earnings call with management
focused almost entirely on the brand, given that it lagged
rivals such as Hermes, which earlier on Thursday reported 7%
sales growth in the quarter.
A strong rebound at Louis Vuitton and Christian Dior also
helped LVMH's fashion and leather goods division increase
like-for-like revenues by 12%.
Duplaix said Gucci's brand momentum was still very strong
but acknowledged there was room for improving its performance
with local customers. He flagged more marketing investments and
initiatives to support its upcoming fashion collection.
He also said the group was working to re-balance Gucci's
range of products in stores to appeal to a wider client base, by
including classic pieces such as re-editions of popular
He said it was difficult to say whether the brand's surge in
U.S. sales would be repeated in coming months given the
uncertainty hanging over the looming presidential election, and
more generally the state of the U.S. economy.
"The key question for Kering is how fast and effectively
Gucci will be able to renew itself," said Luca Solca, an analyst
(Reporting by Silvia Aloisi; Editing by Sarah White and Jan