French luxury group Kering delivered a record 28.6 percent increase in first-quarter comparable sales on Tuesday, beating market expectations, as a revival in its biggest brand Gucci accelerated and Yves Saint Laurent outperformed. Its strong sales provided further evidence of a recovery in the wider luxury market, partly in response to a rebound in China's appetite for luxury fashions after a slowdown.
Rival LVMH reported like-for-like quarterly sales growth of 13 percent earlier this month.
First-quarter comparable sales at Gucci, which makes over 60 percent of Kering's profit, rose 48.3 percent, with all products and regions contributing to the rise. They beat analysts' expectations of 21.4 percent growth. Under the leadership of designer Alessandro Michele and Chief Executive Marco Bizzarri since early 2015, Gucci has revamped its stores and adopted a new luxury aesthetic that has proved popular with customers.
Its new vintage styles include rich floral prints reminiscent of the 1970s, as well as eccentric contemporary style such as kangaroo fur loafers or a rhinestone-covered bodysuit recently worn by Rihanna at the Coachella music festival in the United States.
"We are seeing a very strong appetite from the public for Michele's collections," Finance Chief Jean-Marc Duplaix told a conference call, also highlighting the Dionysus bag as a popular product.
Gucci also benefited from favorable comparisons with the year-ago quarter and Duplaix said growth would "normalize" in coming quarters though the brand would continue to outperform the luxury market.
Yves Saint Laurent, which accounts for over 10 percent of Kering's luxury sales, posted comparable sales growth of 33.4 percent, with new designer Anthony Vaccarello at the helm since April 2016, also beating expectations of 19 percent growth. Duplaix said there were waiting lists for some products at Yves Saint Laurent.
Sales at Bottega Veneta rose 2.3 percent, the first increase since the fourth quarter of 2015, amid improving tourism spending in Europe and also stronger demand in Asia.
Analysts polled by Inquiry Financial for Reuters had looked for group comparable sales growth of 13.6 percent in the first quarter 2017 against 10.4 percent growth in the fourth quarter 2016.