Kering reported higher revenue for the first three months of the year, citing “a very solid first quarter in a more uncertain environment, notably impacted by the tightening of COVID restrictions in China since March”. With revenues of 4.96 billion euros ($5.4 billion) for the quarter ending March 31 (up 21% on a comparable basis compared to the same quarter last year), the French luxury goods group recorded double-digit revenue growth for all of its brands, with “spectacular performances” coming from Saint Laurent, its “Other Maisons, notably Balenciaga” and Kering Eyewear. Meanwhile, Kering Chairman and CEO Francois-Henri Pinault revealed that Bottega Veneta achieved “strong sales growth on a more demanding basis”, while the “strong performance of its biggest brand Gucci in North America and Europe has been overshadowed by its exposure to China.”
Diving into the results of its individual brands, Kering revealed that the first quarter turnover of Gucci, which is responsible for almost 50% of the group’s sales, amounted to 2.6 billion euros (2 .8 billion), up 13% compared to the first quarter of 2021, driven largely by local customers in North America and Western Europe in particular. Kering noted that Gucci’s wholesale revenue fell 2% on a comparable basis, indicating that its “streamlining of this sales channel is now complete”, following Kering’s efforts to restructure the distribution of the Italian fashion brand away from wholesale and towards more scrutiny and control. exclusivity that comes with its own retail channels.
While Gucci was Kering’s “weakest link” in the first quarter, according to Neev Capital managing director Rahul Sharma, the “new heights” of Saint Laurent, as Kering put it, helped catch up. from Gucci. Saint Laurent had an exceptional start to the year, according to Kering, with sales of 739 million euros ($801 million), up 37% on a comparable basis. “Direct store sales grew strongly, +49% on a comparable basis, with double-digit growth in all product categories”, with this “excellent dynamic [being] driven by spectacular performances in Western Europe and North America. As for the turnover of the brand’s wholesale, in the process of “rationalization”, according to Kering, it increased by 10% on a like-for-like basis.
Kering also highlighted the “resounding success of the Spring 22 postponements and collections” for Saint Laurent, as well as its “continued online development”.
Jefferies analysts Flavio Cereda and Kathryn Parker said in a note Thursday that they “continue to believe Saint Laurent is more sustainable over the medium term than Balenciaga,” which was Kering’s other big performer in the first quarter. Although they claim that a “significant increase in leather goods must come to an end [for Saint Laurent]in light of the fact that wholesale streamlining – a la Gucci – is coming.
Similarly, Bottega Veneta performed well in the first quarter, with revenue totaling 396 million euros ($429 million) in the first quarter, up 16% on a like-for-like basis. Compared to the first quarter of 2019, Kering revealed that Bottega sales were up 59%, with sustained activity in directly owned stores and very good performances in Western Europe, North America and Japan . Of note, according to Kering, is Bottega’s “constantly deployed iconization strategy” for its offerings, the gradual streamlining of wholesale, and the strength of retail through its “stable network of stores”.
As for its “Other Houses”, the group – which houses the Balenciaga and Alexander McQueen brands, among others – “had an extremely solid first quarter”, with sales of 973 million euros (1.05 billion euros). dollars), up 35% on a like-for-like basis. , and “every home registering double-digit growth”.
Kering’s positive results follow those of rivals LVMH and Hermès, which reported first-quarter growth last week despite the “still uncertain context”, largely via the Chinese market. Echoing the sentiments of LVMH and Hermès management, Kering chief financial officer Jean-Marc Duplaix said on a call on Thursday that the Chinese market remained fundamentally “intact” and consumers should therefore rebound. and resume their rugged luxury. expenses once the last COVID crisis has passed.