Paris—Kering SA reported Tuesday that its fourth quarter revenue rose as its Saint Laurent brand saw a sales increase while its biggest brand, Gucci, continued to report declining sales.
Sales were up 4.9% on a comparable basis compared with the 3.6% growth analysts had expected. Kering also reported a 5% decline in its full year full-year recurring operating income to 1.66 billion euros (about $1.9 billion), which narrowly missed analysts’ estimate for 1.7 billion euros.
Revenue generated outside the Eurozone accounted for 79% of sales in 2014. Revenue growth was sustained in mature markets at 3.8% based on comparable data, driven by Japan and North America. Emerging markets were up 5.6% on a comparable basis, and accounted for 38% of Kering’s total sales.
Besides Saint Laurent, which posted a 25% sales increase, Kering said Gucci sales were down 0.5% while Bottega Veneta rose 6.8%
YSL Sales Double
For 2014, Yves Saint Laurent reported revenue up 27% year on year as reported and 27.2% based on comparable exchange rates.
“Yves Saint Laurent revenue doubled in three years, driven by its successful market repositioning. Propelled by strong sales in directly operated stores, which soared 40.3% at constant exchange rates, all main product categories and geographic areas reported solid growth,” the company stated.
Puma, which Kering owns 86% of, had a 6.3% increase in sales and forecast “medium single-digit” increase in adjusted sales for 2015.
Gucci sales by product category showed robust handbag sales, “reflecting the positive effects from the measures undertaken over the last collections to fine-tune the offer, as well as sustained performances for Shoes and Ready-to-Wear.”
Gucci’s new creative director Alessandro Michele will unveil his first collection as creative director next week.
Its Bottega Veneta brand reported sales have more than doubled since 2010. Bottega Veneta’s directly operated stores accounted for 80% of the brand’s total sales in 2014. Revenue growth for directly operated stores was once again extremely solid during the year, at 10.8% on a comparable basis. Leathergoods remain the brand’s core business, recording extremely robust year-on-year sales growth of 14.3%.
Total revenue generated by Kering’s other Luxury brands in 2014 was up 14.4% year on year as reported and 6% on a comparable Group structure and exchange rate basis. The main growth drivers were the Couture and Leathergoods brands, which posted an overall revenue rise of around 9% based on comparable data. The Timepieces and Jewelry brands felt the impact of tougher market conditions, with the Timepieces category particularly affected.
Sales by the wholesale network were up 2.1% versus 2013 on a comparable basis. Wholesale was once again the main distribution channel for Other Luxury brands, accounting for 55.2% of sales, reflecting the differing stages of development of the Couture and Leather Goods brands as well as the specific distribution characteristics for Timepieces and Jewelry.
Retail sales in directly operated stores advanced 12.6% based on comparable data, “led by the strong performance of Couture and Leathergoods brands.”