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Gucci Rebound Led Kering’s Q1 Sales Growth Above Pre-Pandemic Levels

Growth across all of Kering’s business groups, particularly its powerhouse brand Gucci, fueled Kering’s strong topline performance that saw results top pre-pandemic levels.

In a Nutshell:  Kering said first quarter revenue rose sharply, up 25.8 percent on a comparable basis from year-ago figures. The latest quarterly result was also up 5.5 percent versus the first quarter of 2019, on a constant exchange rate basis.

Kering said growth was “well balanced” across the group, driven by solid performances from all its fashion houses.

“Comparable revenue generated by the Luxury Houses’ directly operated networks climbed by 31.8 percent from the first quarter of 2020 and by 6.3 percent versus the first quarter of 2019, against a backdrop of store closures in part of the retail network,” Kering said.

The luxury firm said the increase in sales was mostly driven by outstanding momentum in the Asia Pacific, which was up 83 percent, and in North America, up 46 percent. Sharp growth in online sales also boosted results, which continued across regions. Online sales were up 108 percent in the quarter, with the e-commerce channel representing 14 percent of retail sales.

In the wholesale channel, comparable sales were up 8.9 percent for the first quarter. Kering said the “Group continues to streamline this distribution channel.”

Net Sales: The luxury firm said first quarter sales rose 21.4 percent to 3.89 billion euros ($4.68 billion) from 3.20 billion euros ($3.85 billion) a year ago. The increase was up 25.8 percent on a like-for-like basis.

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By fashion house, Gucci revenues rose 20.2 percent to 2.17 billion euros ($2.61 billion) from 1.80 billion euros ($2.17 billion), or up 24.6 percent on a like-for-like basis. Kering said because of strong consumer response to its collections, successful collaborations and multiple local clienteling initiatives, the brand saw a 33.6 percent increase in comparable sales through its directly-operated network. Kering said the brand’s appeal was particularly strong in Asia Pacific, where sales were up 78 percent, and in North America, which was up 51 percent. Wholesale revenue was down 26.1 percent on a comparable basis, in line with Gucci’s strategy of gradually enhancing the exclusivity of its distribution network, the company said.

First-quarter revenue for Gucci represented a marked change from the fourth quarter, which saw sales sag 13.5 percent to $2.75 billion. The brand contributes 60 percent to Kering’s overall revenue, and last quarter’s results reflected the impact from Covid lockdowns.

For Kering’s other major fashion houses, Yves Saint Laurent revenue rose 18.9 percent to 516.7 million euros ($621.6 million) from 434.6 million euros ($522.8 million), or up 23.4 percent on a like-for-like basis. Bottega Veneta revenue rose 19.9 percent to 328.2 million euros ($394.8 million) from 273.7 million euros ($329.3 million).

Kering’s couture and leather goods division, which includes Alexander McQueen, Balenciaga, as well as its jewelry group Boucheron, Pomellato and Qeelin, saw revenue grow 29.1 percent to 714.3 million euros ($621.6 million) from 553.3 million euros ($665.6 million), or up 33.1 percent on a like-for-like basis. A separate category call corporate and other, which includes Kering Eyewear, saw revenue grow 18.6 percent to 163.1 million euros ($196.2 million) from 137.5 million euros ($165.4 million), or up 25.8 percent on a like-for-like basis.

CEO’s Take: “In the first quarter, Kering delivered a strong topline performance, bouncing back above pre-pandemic levels. Growth was consistent across all our Houses, and we are particularly pleased with Gucci’s momentum as the brand kicks off its centennial celebration,” Françcois-Henri Pinault, chairman and CEO, said. “While 2021 should still face some impact from the health crisis, the strategy, positioning and creativity of our Houses will enable each one of them to thrive in today’s environment.”