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Gucci, Puma Help Lift Kering to “Very Good” Quarter

Kering reported its earnings for the first half of the year and credited growth in its luxury and sport brands for a “very good” result.

Reporting operating profit of 811 million Euros ($899 million), up 4.9%, the French holding company beat market expectations, which had been pegged at 796 million Euros. Second-quarter sales rose 6.9%, again topping the 3 percent gain analysts had anticipated.

Kering, which owns several luxury brands including Balenciaga and Yves Saint Laurent, credited “new creative impetus” at Gucci and “sustained robust growth” at Saint Laurent, where revenue growth in the second quarter totaled 22.1%, for helping to clean up in the first half of the year.

Comparable sales at Gucci were up 7.4% in the most recent quarter, helped by growth in Western Europe and a turnaround in emerging markets, where sales rose 2.1% off the back of a solid performance in Mainland China, particularly in the country’s major cities.

Bottega Veneta was the blight on an otherwise sunny performance in Kering’s luxury division. The Italian leather goods brand was “heavily weighed down” by lower tourism in Western Europe, with revenue down 9.2% on a reported basis. All other luxury brands under Kering’s hold were also down 23.8% from last year.

Kering’s sport and lifestyle activities branch, which chiefly includes German footwear maker Puma, was also cited as a high-growth area for the company. Sales totaled 1.7 billion Euros ($1.9 billion), up 5.3% on a reported basis.

“We are pleased with the performances we have delivered in the first half of 2016,” said Kering Chairman and CEO François-Henri Pinault. “As anticipated, our Sport & Lifestyle activities resumed operating growth, thanks to healthy revenue trends.”

Puma reported robust Q2 growth earlier this week, with sales up 10 percent through the first half of the year to 1.6 million Euros ($1.76 million).