Kering reported fourth-quarter revenue that beat estimates as buoyant demand for Saint Laurent clothing helped compensate for declining sales of Gucci handbags and slowing growth at Bottega Veneta. Sales climbed 4.9 percent on a comparable basis, Paris-based Kering said Tuesday, compared with the 3.6 percent median of analyst estimates compiled by Bloomberg. The Gucci owner also reported a 5 percent drop in full-year recurring operating income to 1.66 billion euros ($1.9 billion), an outcome that compared with the 1.7 billion-euro median estimate.
The stronger sales provides a boost for Kering as it grapples with sluggish demand for Gucci clothing and accessories. The better-than-expected performance was in part due to a revival at the Puma sports brand, according to analysts at Raymond James Euro Equities. Kering is the majority owner of Puma, which yesterday reported a 6.3 percent increase in currency-adjusted sales for the fourth quarter.
Organic growth is Kering’s “number one priority in 2015 in a macroeconomic and currency environment which remains unsettled,” Chief Executive Officer Francois-Henri Pinault said in the statement. “I am confident in the group’s ability to achieve sustainable, profitable growth while focusing in the short-term on our brands’ cash flow generation.”
Saint Laurent quarterly sales advanced 25 percent on a comparable basis, exceeding the median estimate of 17 percent growth. Gucci sales fell 0.5 percent, less than the 1 percent predicted. Sales at leather-goods maker Bottega Veneta rose 6.8 percent, trailing estimates.
Gucci’s new CEO Marco Bizzarri picked Alessandro Michele as creative director in January, betting the relatively unknown designer can reignite sales as Nicolas Ghesquiere has done at larger rival Louis Vuitton. Owner LVMH Moet Hennessy Louis Vuitton SA this month reported a better-than-expected 4 percent increase in fashion revenue, about a year after Ghesquiere’s appointment. Michele will unveil his first collection as creative director next week.
Puma, which added singer Rihanna to a sponsorship roster that also includes sprinter Usain Bolt, yesterday forecast a “medium single-digit” percentage increase in currency adjusted sales in 2015 as it continues a gradual turnaround under CEO Bjoern Gulden. While the brand’s quarterly sales strengthened, earnings missed estimates. Kering owns about 86 percent of Puma, having acquired control of the label known for its leaping cat logo in 2007.