PARIS — Impressive gains at Gucci Group drove first-half net profits ahead 12.5 percent for PPR, offsetting declines at the French conglomerate's struggling retail arm.
Net income advanced to 169.6 million euros, or $218.2 million, from 150.8 million euros, or $185.1 million, a year ago. Income benefitted from a 76.4 percent leap in operating income at Gucci Group, PPR chairman and chief executive François-Henri Pinault told a meeting of analysts and reporters Thursday at the Pompidou Museum here.
Operating income grew 11.3 percent to 348.6 million euros, or $448.4 million, from 313.3 million euros, or $384.6 million, last year, Pinault said. Currency conversions were made at average exchange rates for the respective periods.
The numbers, which beat analysts' expectations, would have been better but for the impact of adverse exchange rates that wiped 38.9 million euros, or $50 million, off Gucci Group's 107.4 million euros, or $138.1 million, in operating income, Pinault said.
Coming a day after LVMH Moët Hennessy Louis Vuitton touted a 19 percent rise in net income, PPR's results point to a continued roll for luxury.
Pinault said sales of luxury products in July and August were along the same lines of the 12.5 percent gain clocked in the first half, and he voiced "confidence" for the remainder of the year.
Among bright spots, Pinault said first-half losses narrowed 9.1 percent at the Yves Saint Laurent fashion house, thanks to efforts by the new management and design teams. First-half losses at YSL totaled 40.1 million euros, or $51.6 million, down from 44.1 million euros, or $54.1 million, last year.
Pinault was upbeat on Bottega Veneta, the Italian fashion and leather house that achieved profitability for the first time with 2.1 million euros, or $2.7 million, in profits in the half.
Meanwhile, the chairman and ceo said losses were shrinking "beyond expectation" at Boucheron and Balenciaga and that those brands were on the road to break even "ahead of schedule."
Among "other brands" — including Boucheron, Balenciaga, Alexander McQueen, Sergio Rossi, Bedat & Co. and Stella McCartney — losses diminished by 39.9 percent to 25.7 million euros, or $33.1 million, Pinault said.YSL Beauté's losses widened to 18.8 million euros, or $24.2 million, due to currency exchange losses, as well as investments made to launch the YSL Cinema and Zegna Z scents.
Pinault said the Gucci brand continued to reap robust leather goods sales, as demand for the new La Pelle Guccissima had "exploded."
Less stellar were PPR's retail operations, which have struggled against a tepid economic climate in Europe, especially in France.
The division's operating income fell 4.2 percent to 268.8 million euros, or $345.8 million, mostly due to a 27 percent dive in operating income at the Conforama furniture chain, which has been renovating stores and revisiting its product offer.
Losses also widened to 2.3 million euros, or $2.9 million, at the Printemps department store chain.
Asked during a question period about persistent speculation that PPR will sell Printemps, Pinault replied: "I will not comment on rumors."
At the Redcats mail-order division, improvements in the U.S. and Scandinavia boosted profits 8 percent to 110.9 million euros, or $142.6 million, and profits rose 10.3 percent to 21.5 million euros, or $27.6 million, at the Fnac music and book chain.
PPR stock inched down 0.1 percent to close Thursday at 87.80 euros, or $109.22 at current exchange, on the Paris Bourse.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty