Kering posts robust growth, H1 profit jumps 185.7 percent

Consolidated revenue for the first half of 2018, Kering said in a statement, amounted to 6,431.9 million euros (7,490 million dollars), up 26.8 percent reported and 33.9 percent based on a comparable Group structure and exchange rates. The company reported 185.7 percent jump in net income, Group share to 2,359.6 million euros (2,748.3 million dollars). Earnings per share stood at 18.74 euros (21.83 dollars) versus 6.55 euros (7.63 dollars) for first-half 2017.

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“Kering achieved dazzling top-line and earnings performances in the quarter and six months. While facing increasingly demanding comps and an uncertain global environment, we will once again substantially enhance our financial and operating performances in 2018,” said François-Henri Pinault, Kering’s Chairman and Chief Executive Officer in a statement.

Kering says revenue growth driven by all market segments

The sharp year-on-year increase in revenue, the company said, was driven by extremely strong sales growth in both mature and emerging markets, with comparable increases of 45.4 percent in North America, 25.1 percent in Western Europe, 37.6 percent in Asia Pacific (excluding Japan) and 30.7 percent in Japan.

Kering’s gross margin came to 4,776.3 million euros (5,560.4 million dollars), up 30 percent on the same period of 2017. Recurring operating income reached 1,771.9 million euros (2,062.8 million dollars), up 53.1percent year on year, and consolidated recurring operating margin advanced 470 basis points to 27.5 percent. EBITDA jumped 47.6 percent to 2,021.6 million euros (2,353.6 million dollars) and the EBITDA margin widened by 440 basis points to 31.4 percent.

Recurring net income, Group share, the company added, reached 1,262.2 million euros (1,470 million dollars), up 54.9 percent and net income from discontinued operations totalled 1,148.2 million euros (1,337 million dollars), primarily from the capital gain resulting from the loss of control of Puma.

Gucci revenues increase 36 percent in the first half

Gucci, Kering added, delivered another excellent showing in the first half of 2018, with revenue totalling 3,852.8 million euros (4,485.5 million dollars), up 36 percent reported and 44.1 percent on a comparable basis. Sales generated in the brand’s directly operated stores – which represented 86 percent of total revenue – rose by 46.6 percent based on comparable data. Wholesale sales climbed 33 percent based on comparable data and comparable sales of Gucci rose 40.1 percent year on year in the second quarter of 2018. Gucci's recurring operating income surged 62.1 percent to 1,470.5 million euros (1,712.2 million dollars), and its recurring operating margin gained 620 basis points, reaching a high of 38.2 percent.

Revenues at Yves Saint Laurent reached 808.2 million euros (941 million dollars) in the first half, up 13.7 percent reported and 19.7 percent on a comparable basis driven by its directly operated stores and wholesale network, which posted comparable growth of 17.2 percent and 29.4 percent, respectively. Sales increased across all of the House's regions, with North America and Japan leading the way (up 30.4 percent and 24.9 percent, respectively, on a comparable basis). Second quarter revenue increased 19.8 percent on a comparable basis. Yves Saint Laurent ended the first half of 2018 with recurring operating income of 198 million euros, an increase of 21.1 percent, while consolidated recurring operating margin widened to 24.5 percent.

Bottega Veneta’s revenue, Kering said, was weighed down by lower tourist numbers in Western Europe and retreated 6.5 percent as reported and 0.9 percent on a comparable basis to 552.2 million euros (643 million dollars). Sales generated in directly operated stores – which accounted for 82.3 percent of Bottega Veneta’s total revenue – declined 1.8 percent based on comparable data, whereas comparable wholesale rose 3.3 percent. By region, the house posted comparable sales rises in Japan of 2.2 percent and North America (7 percent). Bottega Veneta’s sales contracted by 2.3 percent in the second quarter on a comparable basis, mainly due to lower tourist numbers in Western Europe.

Revenue of the Group’s other luxury houses advanced 31.1 percent as reported and 36.5 percent on a comparable basis, at 995.5 million euros (1,159 million dollars) led by Balenciaga’s excellent performance during the period and strong growth momentum at Alexander McQueen. Sales generated in stores directly operated by other luxury houses rose 50.1 percent on a comparable basis, with double-digit growth in all key regions, notably Asia Pacific and North America, which both saw sales increases of more than 50 percent. Second quarter revenues of this segment were up 34.7 percent on a comparable basis.

Corporate and other segment also delivered 32.4 percent growth in the first half led by a very robust showing from Kering Eyewear.

Picture:Gucci website