Paris—PPR, the luxurygoods conglomerate that owns Gucci, Yves Saint Laurent and Bottega Veneta, reported Thursday that its third quarter sales rose 13% boosted by increased demand for its flagship brands and continued growth in Asia.
Revenue from continuing operations increased to 4.46 billion euros ( about $6.21 billion), from 3.95 billion euros a year earlier. The results were better than most analysts’ estimates which predicted 4.33 billion euros for the quarter ending September 30. Excluding acquisitions, disposals and currency fluctuations, growth was 7.3%.
“Each of our major luxury brands achieved double-digit growth, our retail businesses made solid progress, and Puma’s sales rebounded,” said Francois-Henri Pinault, chairman and ceo. “Our very good overall performances were fueled by vigorous marketing momentum, notably online and internationally.”
Leathergoods Boosts Sales
The third quarter increases the company’s confidence of a stronger full-year “operating and financial” Pinault added. Some mature markets, especially Europe, were helped by an increase in tourists with numbers of Chinese tourists nearly doubling compared with a year ago. At the same time, the average spend of tourists–particularly among Chinese visitors–is also on the increase. “October was very good in luxury, even better than in the third quarter,” he noted.
Of particular note were increases at PPR’s Gucci Group where sales in emerging markets, including the Greater China region, rose 24% in the quarter. Overall, sales at the luxury unit climbed 27% exceeding the 25% increase that its rival LVMH had posted in third-quarter sales at its fashion and leathergoods division.
Sales increased 26% at the Gucci brand with all categories posting solid performances. The Greater China region, which accounts for 22% of the quarter’s sales, grew 31%. In mature markets, Gucci revenues rose 10% for the quarter, with a “remarkable performance in Western Europe (28% increase) while sales in North America “improved month after month.”
Bottega Veneta posted nearly a 42% increase in sales, fueled by leathergoods which were up 28%. Revenue climbed 19% at Yves Saint Laurent where all categories posted solid performances, most notably leathergoods which accounted for 32% of the quarter’s revenues
Sales at Puma, in which PPR holds a 71.6% stake, increased 17%, the Herzogenaurach, Germany-based brand said recently. Revenue may grow “mid-to-high single digits” this year, the sporting-goods maker said, raising a previous forecast.
Pinault also said Gucci will increase prices by about 5% on some products in Europe to “rebalance pricing between Europe and elsewhere and to partially offset rising raw material prices.”
PPR aims to sell its Fnac, Redcats and Conforama retailing businesses and use the proceeds to develop its Gucci Group luxury division and a new sports and lifestyle unit.