Kering, the parent company of renowned luxury brand Gucci, has exceeded expectations by reporting a remarkable 21% increase in sales during the first quarter of 2022. This outstanding performance can be attributed to the high demand for Kering’s distinctive fashion labels in the United States and Europe. Despite the challenges posed by COVID-19 lockdowns in China, Kering managed to offset the impact through its success in other markets.

The overall sales of the group for the first three months of the year reached a staggering 4.96 billion euros ($5.4 billion), surpassing even the forecast of 4.89 billion euros made by Citi analyst Thomas Chauvet. Chauvet is renowned for his accurate estimates on Kering’s financial performance, as corroborated by Refinitiv Eikon’s rankings.

Gucci, which accounts for more than half of Kering’s annual sales, experienced a growth rate of 13.4%. The brand performed exceptionally well in the United States, Western Europe, and Japan, despite the difficulties encountered in China due to COVID-19 restrictions. However, this growth rate fell slightly short of Chauvet’s estimate of 23% and represented a slower pace compared to the previous quarter.

Luca Solca, an analyst with Bernstein, acknowledged that Gucci slightly missed consensus forecasts but commented that the quarter’s overall performance was still ahead by 5.6%. Solca also emphasized the impressive achievements of smaller labels within the Kering portfolio.

Yves Saint Laurent witnessed an impressive growth rate of 37.2%, while Bottega Veneta saw a significant increase in sales of 16.3%. Jean-Marc Duplaix, Kering’s Chief Financial Officer, expressed confidence in the Chinese luxury market, emphasizing the resilience of Chinese consumers, the growth of the middle class, and the strong appetite for luxury brands in the country.

Despite the numerous challenges posed by the global pandemic, Kering remains optimistic about its future prospects. The company’s strong presence in the United States and Europe, coupled with its ability to adapt to changing market conditions, has proven to be instrumental in driving growth and maintaining its position as a leader in the luxury fashion industry.

Useful links:
1. Business of Fashion
2. Reuters