MILAN — Pinault Printemps-Redoute released second-quarter profitability figures for its Gucci Group subsidiary showing accelerating profit and sales growth from the first quarter of the year and the year-earlier period.
PPR said Gucci’s earnings before interest and taxes more than doubled to 65 million euros, or $78.3 million, from 26.8 million euros, or $30.5 million, the year before. Sales grew 9.8 percent to 641 million euros, or $772.5 million, from 583.7 million euros, or $663.3 million, but on a comparable basis, stripping out the effects of exchange rates, the sales would have risen 15.9 percent. Dollar figures are at average exchange.
PPR chairman Serge Weinberg said the quarter’s performance “reflects the quality of our main brands and the significant potential for profitable growth of our luxury goods business within the ‘New PPR.’”
Weinberg added that Robert Polet, the new chief executive officer of Gucci Group, will present Gucci’s development strategy by the end of the year. Neither Weinberg nor Polet was available for further comment on the second-quarter numbers.
Gucci’s gross margin advanced 12.6 percent to 422.8 million euros, or $509.6 million, from 375.6 million euros, or $426.8 million. PPR said it boosted its margins by reducing operating losses at Yves Saint Laurent, YSL Beauté and the group’s other brands like Boucheron, Sergio Rossi, Stella McCartney and Alexander McQueen. PPR also said Bottega Veneta reached the breakeven point.
A PPR spokesman said the company had to restate Gucci’s second-quarter figures from 2003 to comply with French accounting standards. Last year, when Gucci was still a publicly listed company, Gucci posted an operating loss of 17.9 million euros, or $20.3 million.
Looking at the group’s brand portfolio, Gucci brand sales advanced 8.6 percent for the quarter to 392.8 million euros, or $473.4 million. Operating profits at the Gucci division rose 17.5 percent to 102.9 million euros, or $130.2 million.
Yves Saint Laurent gained 18.6 percent to 42.2 million euros, or $50.9 million, on a “sharp increase in retail sales by directly operated stores.” YSL Beauté grew 6.7 percent to 123.7 million euros, or $149.1 million, while Bottega Veneta sales leaped 64.2 percent to 24.8 million euros, or $29.9 million.
PPR said it reduced YSL’s operating losses for the quarter by 3.9 million euros, or $4.7 million, to 14.9 million euros, or $18 million and YSL Beauté’s by 13.6 million euros, or $16.4 million, to come in at 4.8 million euros, or $5.8 million.
PPR said that collectively Boucheron, Sergio Rossi, Bédat & Co., Alexander McQueen, Stella McCartney and Balenciaga reduced their operating losses by 2.6 million euros, or $3.1 million, over the quarter.
On a geographic basis, sales in Europe gained 12.7 percent to 269.8 million euros, or $325.2 million, while those in the U.S. grew 6.1 percent to 137 million euros, or $165.1 million, or 18 percent on a constant currency basis. Revenue from Japan dropped 3.6 percent to 108 million euros, or $130.2 million, but would have grown 6.5 percent on a comparable, constant currency basis. Sales in Asia excluding Japan rose 24.8 percent to 102.3 million euros, or $123.3 million.
PPR also broke down sales by product category and all of them posted growth except for jewelry. Sales of leather goods, by far Gucci’s biggest category, grew 14.7 percent to 233.7 million euros, or $281.7 million. Revenue of shoes rose 7 percent to 80.6 million euros, or $97.1 million. Ready-to-wear sales advanced 9.4 percent to 80.8 million euros, or $97.4 million.
Jewelry sales slipped 6.6 percent to 31.8 million euros, or $38.3 million. Perfume sales gained 4.6 percent to 84.6 million euros, or $102 million. Watches grew 19.6 percent to 51.5 million euros, or $62.1 million. Makeup sales advanced 11 percent to 30.5 million euros, or $36.8 million, and revenue from skin care products rose 23.5 percent to 8.6 million euros, or $10.4 million.