Kering shares are trading notably in the green Wednesday, as the luxury brand owning group reported strong Q1 profits, boosted by a stellar performance by its Gucci and Balenciaga companies. The group also remains upbeat on the outlook for its brands throughout 2018.
By 1310 BST, Kering shares were 5.68% higher at €463.10. That’s a strong level for the stock.
Kering’s luxury brand focus pays off
Kering reported that total revenues grew 27.1% to €3.11 billion in the first three months of 2018, compared with the same period a year earlier. And while the results stament said growth was well-balanced across all of its brands, there were one or two stand out performances.
Revenues at flagship brand Gucci surged 37.9% in Q1 from a year earlier. That’s the seventh straight quarter in which the Italian luxury brand has posted double-digit revenue growth and confirms the revival of the business.
Balenciaga was also a notable success story in the first three months of this year. That brand is reported with ‘other brands’, if which Kering reported revenue growth of 31%.
Kering maintained its outstanding sales momentum in the first quarter,” said Kering CEO and chairman, François-Henri Pinault.
“Under its new Luxury pure player profile, the Group clearly outperformed a market that remains well oriented. Gucci, Saint Laurent and Balenciaga set a high mark within a Group that delivered sharp growth as a whole,” Pinault added.
The strong Q1 results follow the group’s decision to focus purely on ‘luxury’ brands. A decision that saw it divulge itself of its holdings of Puma, Volcom and Stella McCartney.
The outlook ahead for the firm, meanwhile is tough but Pinault is confident Kering’s new strategy will continue to generate success.
“In the balance of the year, we face a high base of comparison and a tough currency environment, but we are confident in the ability of our Houses to continue doing better than their peers, leveraging their innovativeness and creative audacity,” Pinault said.