Kering reports strongest revenue growth since 2012

Accelerating growth in the second half of the year led by its Gucci
and Yves Saint Laurent brands drove Kering’s strongest year-on-year
revenue increase in five years, the luxury group said in its annual
results on Friday.

Like-for-like growth increased 8.1 per cent in 2016 to €12.4bn, as 5.5
per cent growth in the first six months of the year accelerated to a
10.5 per cent performance in the second half. Recurring operating
income was up 14.5 per cent to €1.9bn during 2016.

“It’s the strongest revenue growth since 2012,” Jean-Marc Duplaix,
chief financial officer of Kering, said in a conference call on
Friday. “All geographies and all categories contributed.”

Gucci and Yves Saint Laurent were the stand-out performers.
Like-for-like sales were up 12.7 per cent at Gucci continuing a growth
trajectory it began in the third quarter and marking the latest iteration of a dramatic turnaround that began when Alessandro Michele, an unknown accessories designer at Gucci was elevated to creative director in December 2014 and reinvigorated the
brand.

Meanwhile sales at Yves Saint Laurent were up 25.5 per cent, the sixth
consecutive year that the brand has registered growth about 20 per
cent. Sales at sports and lifestyle brand Puma were up 10.4 per cent.

Bottega Veneta continued to struggles and like-for-like sales dropped
9.4 per cent during the year, weighed down by low tourist numbers. The
brand is one of Kering’s most exposed to tourism, and rising sales in
its stores in Mainland China and South Korea were not enough to fully
offset the lower amount of purchases made by Chinese tourists.

Kering has recommended increasing its dividend 15 per cent to €4.60 per share.

Going into 2017, Mr Duplaix said that Kering will focus on organic
growth in an uncertain macro environment.