Paris—Kering SA today reported third quarter sales in line with estimates even though its Gucci business was off due to weaker Chinese spending, but Puma sales rebounded.
Revenue was up 3.3% to 2.6 billion euros (about $3.29 billion), Analysts predicted 2.59 billion euros. Sales increased 4.4% on a comparable basis.
“Luxury activities held firm in a complex economic environment, thanks to a strong sales uptrend in our network of directly operated stores,” CEO Francois-Henri Pinault said in the statement, adding that sport and lifestyle products were boosted by marketing at Puma.
Kering, which this week named new CEOs at the Bottega Veneta, Brioni and Christopher Kane brands, said in July operating performance would improve in the second half and forecast a return to positive revenue trends, including at Gucci.
Gucci, whose couture and leathergoods account for about half of Kering’s luxury division sales, posted a fifth-consecutive quarterly sales decline, with revenue falling 1.6% to 851 million euros.
Gucci sales in directly operated stores are in line with performances recorded during the second quarter. Positive sales trends reported in directly operated stores in North America and Japan, up 8% and 4% respectively on a comparable basis. “Leathergoods delivered a good performance, driven in particular by the successful launch of the new handbag lines Swing and Bright Diamante. Women’s ready-to-wear and shoes also posted strong sales over the quarter,” the company said.
Bottega Veneta posted solid growth with revenue jumping 11% on a comparable basis (up 10% in its directly operated stores). All geographic areas contributed evenly to this performance. Leathergoods continued to post very solid performances during the quarter, Kering said.
“Yves Saint Laurent once again turned in an outstanding performance, reporting third-quarter growth of 28% on a comparable basis, driven by exceptionally strong sales in directly operated stores, particularly in North America (up 47%) and Western Europe (up 26%).” All product categories, in particular leathergoods, men’s and women’s ready-to-wear reported solid growth.
Kering’s other Luxury brands posted revenue growth of 1.8% on a comparable basis in the third quarter of 2014. Balenciaga and the British designer brands (Stella McCartney, Alexander McQueen and Christopher Kane) reported strong sales growth.
“Jewelry and Timepieces recorded more mixed sales performances mainly resulting from cautious third-party distributors in the timepieces sector and high comparison bases for Boucheron,” Kering added.
TheSport & Lifestyle division posted a 6.1% increase in sales on a comparable basis. Total sales were up 3.3%.
“Puma, which launched its global advertising campaign Forever Faster in early August, recorded very positive third-quarter growth with accelerated sales momentum (up 6% on a comparable basis). This upswing is mainly due to the success of the 2014 Autumn/Winter collection, improved performances in Western Europe (up 6%) –the brand’s historic market– and footwear’s return to sales growth (up 2%).” Positive sales trends at Volcom and Electric reflect the successful repositioning of these brands.