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Gucci and Yves Saint Laurent Power Kering’s Revenue in First Quarter

Elevated by strong gains in its Gucci and Yves Saint Laurent brands, Kering saw revenue rise substantially, with increases in all regions, in the first quarter.

In a Nutshell: Luxury powerhouse Kering reported a sharp rise in revenue from its brands, with healthy organic growth across regions, countries and distribution channels. The Paris-based company said Gucci’s strong growth path continued with a 48.7% comparable revenue gain, while Yves Saint Laurent saw sales gain 19.6% and the ongoing implementation of Bottega Veneta’s action plan resulted in a 0.7% sales increase.

Directly operated stores saw strong growth with a 39.9% comparable stores gain in the period, with double-digit growth in all geographic regions, particularly North America and Asia Pacific. Online sales more than doubled during the quarter and revenue from the wholesale network rose 30.5% on a comparable basis.

Sales: Consolidated revenue in the first quarter increased 27.2% on a reported basis to 3.11 billion euros ($3.79 billion), and was up 36.5% on a comparable basis.

Gucci’s reported revenue rose 37.9% to 1.87 billion euros ($2.28 billion), with sales in its directly operated stores recorded double-digit growth and rose 50.4% on a comparable basis. Revenue posted sharp increases in all geographic regions, particularly North America and Asia Pacific. Gucci’s online sales, driven by the U.S., reported triple-digit growth. The collections were also successful in the wholesale segment, with a 43.5% revenue gain.

Yves Saint Laurent continued to grow at a fast pace, with revenue up 12 percent to 408.2 million euros ($496.8 million) as reported and 19.6% on a comparable basis. Sales in directly operated stores rose 15.5%, propelled by strong revenue in North America, Asia Pacific and Japan. The wholesale sector also posted strong growth, driven by Western Europe.

CEO’s Take: François-Henri Pinault, chairman and CEO, said: “Kering maintained its outstanding sales momentum in the first quarter. Under its new luxury pure player profile, the group clearly outperformed a market that remains well oriented. Gucci, Saint Laurent and Balenciaga set a high mark within a group that delivered sharp growth as a whole. In the balance of the year, we face a high base of comparison and a tough currency environment, but we are confident in the ability of our houses to continue doing better than their peers, leveraging their innovativeness and creative audacity.”