PARIS, Feb 17 (Reuters) – Kering reported sharp growth in fourth-quarter sales on Thursday, beating expectations over the holiday period as marketing investments and 100th anniversary events helped boost the popularity of its top Gucci brand.
Overall sales at the French luxury goods group rose 31.9% on a comparable basis to 5.41 billion euros ($6.14 billion) in the last three months of the year, powered by a 31.6% surge at Gucci that was almost double a 17% consensus forecast by analysts.
The strong comeback by Gucci after a disappointing third quarter will come as a relief for Kering, as the label accounts for 60% of its revenues and around 70% of its profits.
After cutting advertising and other expenses as the pandemic struck in 2020, Kering increased marketing spending to boost its star label in 2021 and this paid off particularly in the final part of the year, with the arrival of the new Aria collection in stores.
The release in November of Ridley Scott’s film “House of Gucci”, although not directly linked to the brand, also helped increase the visibility of its designs.
Kering’s finance chief Jean-Marc Duplaix told reporters the brand – which increased prices twice in 2020 and again in 2021 – would raise prices in a “targeted manner” this year. Rival Louis Vuitton, owned by LVMH, hiked prices this week to offset rising costs and protect margins.
Duplaix said that despite an inflationary environment with rising raw material and transportation costs, the group was confident it could keep improving its profitability.
($1 = 0.8807 euros)
(Reporting by Mimosa Spencer, editing by Silvia Aloisi)
Photo – The lights and signage of Gucci store are reflected on a parking car at Frankfurt’s fashionable Goethestrasse street in Frankfurt, Germany. EPA-EFE/MAURITZ ANTIN
