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Kering’s First Half Proves Luxury Shoppers are Still Loyal

French luxury conglomerate Kering posted a double-digit percentage gain in comparable revenue and recurring net profits for the first half, showing that its fashion and accessories brands are resonating well with consumers globally.

In a Nutshell: Françoise-Henri Pinault, chairman and chief executive officer of the French firm, said, “Kering’s revenue growth handily topped market trends, and was highly profitable. We created an additional 1.2 billion euros in revenue in the six months, and our operating margin reached a record 29.5 percent. Our strategy is clearly paying off.”

The group’s key brands include Gucci, Saint Laurent, Alexander McQueen, Brioni, and it includes brands in the accessories categories that include small leather goods, jewelry and watches.

Net Sales: According to Kering, consolidated revenue was up 18.8 percent to 7.64 billion euros, or $8.51 billion. On an adjusted basis, revenue was up 15.3 percent to 7.36 billion euros, or $8.20 billion. All conversions to dollars are at current exchange.

The company said on a comparable basis, its core Gucci brand saw revenue growth of 16.3 percent, while Yves Saint Laurent was up 16.6 percent. Performances at its “Other Houses,” which includes the Alexander McQueen business along with brands in the accessories and jewelry categories, rose 20.3 percent on a comparable basis.

Recurring operating income rose 25.3 percent to 2.25 billion euros, or $2.51 billion.

Earnings: Recurring net profits after one-time adjustments rose 24.7 percent to 1.56 billion euros, or $1.74 billion, the company said.

The company does not provide guidance for its second half results.

CEO’s Take: According to Pinault, “The success of our brands, built on creativity, innovation, and customer dedication, along with rigorous execution and financial discipline, are delivering a superior combination of organic growth and sustainable profitability.”