Kering shares were in the red Tuesday, despite the luxury group reporting strong fourth quarter sales in its latest earnings results. Kering said its earnings gained a boost from a strong performance from its Gucci brand, while Yves Saint Laurent also performed well.
By 1220 BST, Kering shares were 3.95% lower at €365.00. After moving a little higher during January, the Kering stock has slumped in February, in line with the broader downturn in the stock markets.
Gucci sales boosts Kering earnings
Kering announced total like-for-like, fourth quarter sales growth of 27.4% to €4.26 billion. That helped support full year 2017 sales growth of 27.2%.
Details of the luxury brand owners’ different contributors highlighted the stellar performance of Gucci sales during 2017. Comparable Gucci sales grew 42.6% in the fourth quarter from a year earlier, while full year 2017 sales growth hit 44.6%.
Kering also stated total revenue from its luxury brand activities grew 29.9% in 2017 from 2016, to over €10 billion.
“Kering delivered a phenomenal year in 2017,” said Kering’s CEO and Chairman, François-Henri Pinault.
“We created over 3 billion euros in additional revenues in a single year, and generated more than a billion in additional EBIT. Gucci, whose performance was nothing short of spectacular, is amplifying its desirability across all markets,” Pinault added.
Pinault also re-stated Kering’s plans to focus solely on its luxury brands, by mentioning the impending Puma share redistribution exit plan.
“The distribution to our shareholders of the bulk of Kering’s stake in Puma will allow them to directly benefit from the considerable potential of this brand, which is in the early days of its growth story,” he said.
The luxury brand owner’s outlook said the business would continue to pursue same-store revenue growth while also expanding its bricks and mortar stores, where relevant.
“The Group will continue to implement the measures it successfully actioned in 2017, namely rigorously managing and allocating resources in order to further enhance operating performance, keep up a high level of cash flow generation and grow its return on capital employed,” Kering’s press release read.