PPR SA, the French owner of the Bottega Veneta luxury brand, said third-quarter sales rose 13 percent, beating analysts’ estimates, on increased demand for fashion and leather goods in Asia.
Revenue from continuing operations increased to 4.46 billion euros ($6.21 billion), from 3.95 billion euros a year earlier, Paris-based PPR said today in a statement after the market’s close. The average of six analysts’ estimates compiled by Bloomberg was 4.33 billion euros. Growth was 7.3 percent on a basis that excludes acquisitions, disposals and currency shifts.
PPR aims to sell its Fnac, Redcats and Conforama retailing businesses and use the proceeds to develop its Gucci Group luxury division and a new sports and lifestyle unit headed by Puma AG. The company is exploring financing options for Conforama, France’s second-largest furniture retailer, four people with knowledge of the matter said Oct. 19.
“We view the upcoming transformation of PPR into a ‘pure play’ luxury/lifestyle company as an attractive investment opportunity,” said Thomas Chauvet, an analyst at Citigroup Inc. in London, in an Oct. 18 note. He recommends buying the stock.
Each of PPR’s luxury brands increased sales at least 10 percent in the quarter, Chief Executive Officer Francois-Henri Pinault said in the statement. The third quarter increases the company’s confidence of a stronger full-year “operating and financial” performance, he said.
Gucci Group’s sales in emerging markets, including the Greater China region, rose 24 percent in the quarter. Overall, sales at the luxury unit climbed 27 percent. That exceeded LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, which posted a 26 percent gain in third-quarter sales at its fashion and leather goods unit.
Sales increased 26 percent at the Gucci brand and 42 percent at accessories label Bottega Veneta, PPR said. Revenue climbed 19 percent at Yves Saint Laurent.
Sales of luxury goods may climb this year to the highest level since 2007, led by demand in China and a rebound in the U.S., according to an estimate from Bain & Co.
Sales rose 9.8 percent at Conforama and 8.4 percent at web and mail-order retailer Redcats, PPR said. Revenue advanced 4.3 percent at Fnac, fueled by a 23 percent rise in online sales.
Sales at Puma, in which PPR holds a 71.6 percent stake, increased 17 percent, the Herzogenaurach, Germany-based company said Oct. 26. Revenue may grow “mid-to-high single digits” in 2010, the sporting-goods maker said at the time, raising a previous forecast.
To contact the editor responsible for this story: Celeste Perri at email@example.com.