Kering Advances After Gucci Turnaround Helps Boost Earningsby
Shares climb 7.1% in early Paris trading one day after results
Gucci second-quarter sales rose 7.4%, trouncing 1.5% estimate
Kering SA shares rose after the French luxury-goods maker posted earnings that exceeded analyst estimates, as a turnaround of its Gucci brand helped offset a drop in tourism in Europe.
The stock soared 7.1 percent in early Paris trading, the most in more than nine months.
First-half operating profit rose 4.9 percent to 811 million euros ($899 million) excluding one-time items, while analysts expected 796 million euros. Gucci’s sales gained 7.4 percent in the second quarter, fueled by western Europe and a rebound in emerging markets. The results show that Gucci Chief Executive Officer Marco Bizzarri and creative director Alessandro Michele’s efforts to turn around the brand are working as it’s overcome a slowdown in China, the strong dollar and weak demand after terrorist attacks in Europe.
“The brand is likely gaining market share globally, and the magnitude of the beat provides comfort on sustained momentum going into the second half,” Louise Singlehurst, an analyst at Morgan Stanley, wrote in a note.