Kering Beats Q3 Sales Estimates as Slowdown at Gucci Begins to Flatten

Kering posted a 14.2% increase in revenues in the third quarter, as the pace of a slowdown at its star brand, Gucci, began to flatten.

Revenues at the Italian label increased by 10.7% on a comparable basis in the three months to Sept. 30, exceeding consensus estimates for an 8% rise. This was down from 12.7% in the second quarter and from 35.1% during the same period a year ago.

“We achieved another strong quarter, and all our segments contributed to our solid top-line gain,” François-Henri Pinault, chairman and CEO of Kering, said in a statement. “Our progress, on top of considerable expansion in the past two years, is healthy and well-balanced across all houses.”

Gucci has seen its growth normalize after several years of stratospheric growth under CEO Marco Bizzarri and creative director Alessandro Michele. The brand accounted for more than 60% of Kering’s revenues and 82% of its operating profit in the first half.

Gucci is undergoing some management changes, with news on Thursday that Jacopo Venturini, its executive VP of merchandising and markets, is leaving the firm. Venturini is a highly regarded and experienced industry veteran who joined Gucci in 2015 from Valentino and, before that, worked at Prada.

Growth at Saint Laurent also slowed in the quarter, with organic sales rising 10.8%, down from 15.8% in the second quarter and from 16.1% in the same period a year ago.

Bottega Veneta saw some improvement as creative director Daniel Lee showed his second collection for the label, with like-for-like sales up 6.9% in the quarter, following an increase of just 0.8% in the second quarter. The brand had registered an 8.4% drop in sales in the third quarter of 2018.

Kering’s performance lagged behind that of other French luxury players.

Early on Thursday, Hermès reported sales rose 18.2% in the third quarter as Asian revenues surpassed growth in all other regions. Meanwhile, LVMH Moët Hennessy Louis Vuitton said earlier this month its revenues were up 17% during the period, despite a 25% drop in business in Hong Kong.

This story was reported by WWD and originally appeared on WWD.com.

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