By Dominique Patton
PARIS, July 28 (Reuters) – Sales at Kering’s flagship brand Gucci fell 2% in the second quarter from a year earlier, the luxury group said on Tuesday, beating expectations for a bigger drop as U.S. demand for its new handbags offset weaker spending elsewhere.
Gucci sales totalled €1.4 billion ($1.6 billion), above analysts’ consensus forecast of €1.37 billion, or a 4% decline, according to Visible Alpha.
The better-than-expected performance could reassure investors that the group is on track with its turnaround under CEO Luca De Meo, who promised Gucci would return to full-year growth this year as new styles from designer Demna reached stores.
The result marks a significant improvement from the previous quarter’s 8% decline, though still represents the 12th straight quarterly sales drop at Gucci, once Kering’s profit engine but under pressure to revive growth after years of weakening demand.
Gucci sales in the United States, luxury’s strongest-performing market thanks to new wealth from the tech boom, rose 9% in the quarter, finance chief Armelle Poulou said, accelerating from the first three months of the year.
Overall, Kering’s sales rose 2% in the quarter when adjusted for currency swings, just above analyst expectations for growth of 1.7%.
Kering’s shares are down about 17% so far this year.
($1 = 0.8778 euros)
(Reporting by Dominique Patton. Editing by Mark Potter)
Comments