Kering Says Sales Were Flat in 1Q, But Hails Recovery in Chinese Demand

By Joshua Kirby

Kering SA on Tuesday booked flat sales growth for the first three months of the year, lagging luxury-fashion rivals, but said it was encouraged by monthly progress and a recovery in Chinese spending.

The French group made total sales of 5.08 billion euros ($5.61 billion), 1% higher on a comparable basis compared with the EUR4.96 billion it notched up in the same period last year. Star brand Gucci contributed EUR2.62 billion, flat on year but slightly ahead of analysts' forecasts, according to a poll provided by FactSet ahead of the update.

The result stands in contrast to Kering's rivals, such as Hermes International SCA and the fashion division of luxury giant LVMH Moet Hennessy Louis Vuitton SE, both of which reported double-digit growth in the quarter.

A steady improvement in China helped the group return to growth in the Asia-Pacific region, with the country itself turning positive on-year in mid-March, finance chief Jean-Marc Duplaix said in a conference call. In the U.S., however, performance was hit by a polarization of the market, with more aspirational customers "less present" in the market, he said.

Kering's second-largest brand, Yves Saint Laurent, continued recent momentum with an 8% rise in sales to EUR806 million, thanks to good performance in ready-to-wear and accessories, Kering said. The other-houses division, home to Balenciaga and Alexander McQueen, booked a decline of 9% as a result of a big drop in wholesale revenue, in line with a streamlining strategy, the company said.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

April 25, 2023 12:00 ET (16:00 GMT)

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