[PARIS] Kering on Thursday (Feb 17) reported fourth-quarter income jumped practically a 3rd, beating expectations over the vacation interval as advertising and marketing investments and a hundredth anniversary promotion occasions helped increase the recognition of its high model Gucci.
Total income on the French luxurious items group rose 32 per cent on a comparable foundation to five.41 billion euros (S$8.27 billion) within the final three months of the yr, powered by a surge of the identical magnitude at Gucci that was nearly double a 17 per cent consensus forecast by analysts.
The sturdy comeback by Gucci after a disappointing third quarter will come as a reduction for Kering – the label accounts for 60 per cent of its revenues and round 70 per cent of its earnings.
“That is an encouraging efficiency,” stated analysts at Exane BNP Paribas, noting the bar had been set greater as most luxurious gamers considerably accelerated gross sales progress over the fourth quarter.
Bigger rival LVMH, earlier this month reported a 28 per cent rise in its trend and leather-based items division, lifted by the efficiency of its blockbuster labels Louis Vuitton and Christian Dior.
After slicing promoting and different bills because the pandemic struck in 2020, Kering elevated advertising and marketing spending to spice up its star label in 2021 and this paid off notably within the closing a part of the yr, with the arrival of the brand new Aria assortment in shops.
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The discharge in November of Ridley Scott’s movie “Home of Gucci”, though circuitously linked to the model, additionally helped improve the visibility of its designs.
Kering’s different manufacturers additionally did effectively. Yves Saint Laurent, its second-largest label, noticed fourth quarter income rocket 47 per cent, lifted by a rebound in ready-to-wear trend and sneakers.
Kering’s finance chief Jean-Marc Duplaix instructed reporters the model – which elevated costs twice in 2020 and once more in 2021 – would elevate costs in a “focused method” this yr. Louis Vuitton hiked costs this week to offset rising prices and shield margins.
Duplaix stated that regardless of an inflationary setting with greater uncooked materials and transportation prices, the group was assured it might hold bettering its profitability.
Duplaix stated that the group would proceed to pursue natural progress and develop its labels, however was well-placed to pursue acquisitions, including it had a really wholesome stability sheet and virtually zero debt.
Fuelled by its reliance on Gucci, hypothesis has swirled that Kering would possibly ponder main acquisitions to spice up its portfolio – particularly as bigger rival LVMH final yr expanded with its $15.8 billion buy of US jeweller Tiffany. REUTERS