Luxury group Kering posted better than expected Q2 figures today with Gucci, Yves Saint Laurent and Puma cited as star performers of the group.
First half consolidated revenue was up 5.5% year on year at €5,693m, while revenue in the second quarter grew 6.9% on a comparable basis. Net income for the first half was up by almost 5% at €811m.
Gucci demonstrated that its new creative direction under Alessandro Michele, who was installed at the start of last year, was paying dividends with revenue up 5.4% at €1,947.5m in H1 and recurring operating income up 7% at €536.9m. Stable mate Yves Saint Laurent also had a stellar H1 with revenue up more than 24% at €547.9m and income up 80% at €109m.
How Yves Saint Laurent performs moving forward will be one to watch closely. Former creative director Hedi Slimane’s last collection will be hitting stores now (he departed earlier this year) after which we will see what his successor Anthony Vaccarrello does with this flagship house. Slimane’s designs had not always achieved critical success but they clearly went down well with the customer.
But it wasn’t all good news across Kering’s luxury brands. Bottega Veneta is struggling with Kering saying it had been hit by a decline in tourism in Western Europe (which has hit every luxury house and was cited in LVMH’s numbers yesterday). Revenue is down in H1 by 9.1% at €571.2m and income slumped almost 20% at €145.1m.
“Other luxury brands” turned in flat revenue at €811.3m while net operating income dropped by 23.8% at €48.6m. Lower revenue in the Eurozone was again highlighted as an issue here (plus menswear brand Brioni made a loss but is currently in the midst of a restructuring) with France in particular struggling, which is sadly no surprise given the drop in tourism due to recent terrorist activity.
In sports & lifestyle, Puma did well. Revenue was up by 10.6% in H1 at €1,686.4m with recurring operating income up 29% at €52.5m. Wholesale and retail did well for the sports brand and operating and procurement improvements led to greatly improved margins.
Kering chairman and CEO François-Henri Pinault declared himself “pleased” with the performance in the first half, which was delivered amid market challenges. “We owe these achievements to our integrated, effective multibrand model, and to well-designed, well-executed strategic action plans,” Pinault said. “In an environment that remains uncertain, we intend to carry out the steadfast implementation of our strategy and maintain a strict operating and financial discipline; together with the commitment of all our teams, this reinforces our confidence that we will progress along the current growth path.”