Kering beats the Street, joins LVMH and Hermes in saying China still strong
Reiterating once more our Luxury Fund Manager’s position that Chinese demand for traditional, top-tier, luxury goods remains strong (see here): French luxury giant Kering reported earnings this week that beat the Street. The company said that Chinese demand pushed earnings higher in its most-recent quarter, and Gucci remains the out-performing brand in its increasingly prestigious stable.
Kering’s share price has appreciated by 17% so far this year
Source: Yahoo Finance
Kering’s finance officer, Jean-Marc Duplaix, told journalists that – contrary to widely-touted fears, and in-line with similar results from LVMH and Hermes – China was a driver of growth, saying: “Sales among our Chinese clientele remained very dynamic in the fourth quarter, even with a high comparison base.”
Comparable sales for the quarter rose by a higher-than expected 24.2%, year on year, and Kering reported record group profits of 3.7 billion euros. Gucci was the strongest brand in Kering’s stable, accounting for more than 80% of the company’s operating income throughout 2018.
Kering’s chairman and CEO, Francois-Henri Pinault said: “2018 was an excellent year for Kering and its Houses. Once again, we significantly outperformed our sector. In an environment that was generally favorable but grew increasingly complex, Kering generated 2.8 billion euros in incremental revenues and 1.3 billion euros in additional EBIT compared to 2017.”
“Our healthy, balanced and profitable growth reflects skillful execution of our strategy, rigorous financial discipline, and a shared culture emphasizing responsibility and commitment. Having worked throughout the year to strengthen the Group and its brands, we have the ambition and the means to sustain our profitable growth momentum.”
Dominion holds Kering in its Global Trends Luxury Fund.
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