Kering decelerated in the last quarter of 2022

Kering has posted very respectable increases in its turnover and operating profit in 2022. But a deceleration in the fourth quarter has prompted it to react.

 

Kering‘s sales jumped by +15% (+9% on a comparable basis) to 20.35 million euros. Its current operating profit rose by 11% to 5.6 billion euros, with a current operating margin of 27.5%.

 

The Group’s share of net profit grew by 14% to 3.6 billion euros.

 

An enviable growth indeed. However, Kering did not do as well as Lvmh, which at the end of January announced a turnover with comparable growth of +17% (to +64 billion euros). The current operating profit of the world’s number one luxury goods company was up by 23%.

 

For François-Henri Pinault, the director, his group can do better. “All of our companies recorded record sales in 2022 and contributed to the increase in operating profit. But these good performances are not all in line with our ambitions and our potential”, he admitted.

 

Deceleration at the end of the year

 

Indeed, Kering clearly decelerated in the fourth quarter. Its sales fell by 7% on a comparable basis, “with contrasting performances depending on the Houses and geographical areas”.

 

The turnover of its flagship house, Gucci, affected by a still very disturbed Chinese market, thus fell by 14% in the last quarter. Over the whole of the financial year, this only increased by 1% to 10.5 billion euros. The appointment at the end of January of a new artistic director, Sabato De Sarno, is aimed precisely at restoring the Florentine company’s momentum. Kering also underlined that Gucci’s “current operating margin” “stood at 35.6% for the year, reflecting in particular the investments made to fuel the House’s future growth”.

 

Yves Saint Laurent, Bottega Veneta and above all Kering Eyewear are on a much more buoyant trend.

 

Yves Saint Laurent’s turnover has thus increased by +23% on a comparable basis to 3.3 billion euros in 2022, stimulated by its own network (+28%). In the fourth quarter of 2022, it increased by a further 4% on a comparable basis. Its own network (+7%) has in fact made it possible to offset wholesale sales which fell by 13%.

 

Bottega Veneta posted comparable growth of +11% to 1.7 billion euros in 2022, and a further increase of +6% in the fourth quarter.

 

Successful diversification

 

Kering Eyewear is proving to be a successful diversification for the group. It has surpassed €1 billion in sales in 2022, at €1.1 billion, thanks to an increase of +27% on a comparable basis. And in the fourth quarter of 2022, sales jumped by a further +30%! Kering sees this as “the relevance of its strategy” and the “benefit of the contributions of Lindberg and Maui Jim”. Kering Eyewear’s recurring operating profit for 2022 has been multiplied by 2.5 compared to 2021, to 203 million euros.

 

Finally, the “Other Houses” (i.e. Balenciaga, Alexander McQueen, Brioni, Boucheron, Qeelin, etc.) are doing well, but had a difficult end to the year. Their turnover grew by 16% to 3.9 billion euros over the year, but fell by 4% in the last quarter.

 

“Beyond the challenges that our companies had to face, especially at the end of the year, we are convinced of the relevance of our long-term strategy,” said François-Henri Pinault. “Although the environment remains uncertain,” he has “no doubt that 2023 will be another year of success for our Houses and growth for the Group.”

 

 

 

Read also > Kering gives the green light to its Beauty division

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Sophie Michentef
Sophie Michentef has worked for more than 30 years in the professional press. For fifteen years, she managed the French and international editorial staff of the Journal du Textile. She now puts her press, textile, fashion, and luxury expertise at the service of newspapers, professional organizations, and companies.

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