Kering’s sales beat estimates as flagship Gucci growth cools

Bloomberg

Kering reported sales that narrowly beat analysts’ estimates as growth at its flagship Gucci brand cooled from last year’s relentless pace.
Gucci’s growth has been slowing gradually in the third year of a blockbuster turnaround under CEO Marco Bizzarri and designer Alessandro Michele, whose decadent products like crystal-coated sunglasses and serpent-painted handbags ushered in an era of new maximalism in fashion.
The bar was high for Kering’s sales as investors have gotten used to big beats in Gucci’s top line. Also, rival LVMH reported higher-than-expected sales last week, lifting shares across the luxury sector.
“We’re in a phase of normalisation,” Chief Financial Officer Jean-Marc Duplaix said on a call with reporters. “I’m very comfortable with Gucci’s trajectory.”
Shares in Kering, which reported after Paris markets closed, have risen about
31 percent since the start of the year.
Sales rose 20 percent on a comparable basis for Gucci, which now makes up about three-quarters of the French group’s profit, according to a statement. Overall sales of $4.28 billion beat estimates slightly, with the Yves Saint Laurent unit and the division selling products like Balenciaga sneakers growing faster than expected.
Bottega Veneta’s sales fell sharply during the quarter even as a new designer hired from LVMH, Daniel Lee, staged a well-received first runway show during Milan Fashion Week in
February. Kering is forecasting “very gradual” improvement after his collections arrive in stores mid-year.