Gucci sales growth missed estimates in the first quarter as lockdowns in China weighed on the performance of the biggest Kering SA brand.
Sales at Gucci, which generated more than half of Kering’s revenue in the period, rose about 13% on a comparable basis, the Paris-based company said Thursday. Analysts had predicted a gain of almost 19%.
Kering’s figures follow strong results from LVMH SE and Hermes International last week. The luxury giants benefited from rebounding demand in Europe and North America, even as virus-related lockdowns in China and the war in Ukraine worsened inflationary pressures and supply-chain snags. Last year, the Asia Pacific region was Kering’s largest market, with 38% of sales, followed by North America and Western Europe.
"Sales momentum remained very strong with local customers in North America and Western Europe in particular,” Kering said of Gucci’s results.
"Performance in Asia-Pacific was more mixed due to new Covid-related lockdown measures at the end of the period, notably in Mainland China.”
Total revenue at Kering climbed about 21% in the quarter on a comparable basis, just ahead of estimates, as other top brands performed well. Yves Saint Laurent showed the biggest jump, with sales up about 37%, blowing past predictions for 24% growth. Bottega Veneta also surpassed analyst estimates.
Gucci earlier this month named Laurent Cathala president of its Greater China fashion business as it seeks to grab a bigger share of the market. Chief Financial Officer Jean-Marc Duplaix explained in a call with reporters that it’s important for Kering’s brands, notably Gucci, to have more powerful regional units, with more local staff in the teams since each market has its own peculiarities.
