Kering’s sales beat estimates as Gucci returns to growth

PARIS / Bloomberg

French luxury-goods maker Kering SA reported fourth-quarter revenue growth that beat analyst estimates as the Gucci brand showed the first signs of a turnaround under Chief Executive Officer Marco Bizzarri and creative director Alessandro Michele.
Sales climbed 8 percent on a comparable basis, Paris-based Kering said in a statement Friday. Analysts predicted growth of 4.1 percent, according to the median of 20 estimates. Gucci revenue advanced 4.8 percent, compared with the 1.5 percent growth expected by analysts.
Pressure has been building on Gucci to translate the buzz around Michele into sales. Bizzarri promoted the little-known designer just over a year ago, entrusting him with revamping the brand, which accounts for nearly two-thirds of Kering’sprofit. While the fourth quarter suggests Michele’s debut collections are living up to their critical hype, it will probably take until the second half to see if he has delivered on expectations as the full complement of his designs won’t be in Gucci’s boutiques until the third quarter.
“We are entering a new phase in our growth,” Kering Chief Executive Officer Francois-Henri Pinault said in the statement. “I am confident that the work of our creative teams and the commitment of all our associates will enable us to extend our growth trajectory in 2016 and beyond.”
Kering’s full-year sales rose 15 percent to 11.6 billion euros, exceeding the 11.4 billion-euro median of analysts’ estimates. Recurring operating income was 1.65 billion euros. Kering shares have risen 1.5 percent this year, compared with a 5.6 percent drop for the Stoxx 600 Retail Index.