Gucci owner Kering reported that it generated sales of 4.19 billion euros ($4.88 billion) for the first nine months of the year were up 36.6 percent compared to the same period last year and a smaller 9 percent versus the same period in 2019. For the third quarter, alone, the three-month period ending in September, revenues for the French luxury goods group rose by 12.2 percent year-over-year and 10 percent compared to Q3 in pre-pandemic 2019, driven by “very strong momentum in North America,” but less than optimal results in Asia, where sales “were held back by rising COVID-19 case numbers during the summer,” and in Western Europe and Japan, “where markets are still being affected by the absence of tourists,” although sales in these regions “continued to improve.”
Diving into the Q3 performances of its biggest revenue-driving brands, Kering revealed that its crown jewel Gucci’s sales of 2.18 billion euros ($2.54 billion) were up 3.8 percent on a comparable basis, but not enough to meet analyst expectations of a 9.1 percent gain in sales compared to Q3 2020. The results mean that Gucci “continues to lag behind mega-brand peers,” according to Bernstein analyst Luca Solca, who stated in a note on Tuesday that the fact that Gucci’s blockbuster Aria collection with Balenciaga will not fully arrive in stores until Q4 penalized the quarterly results this time around.
Despite the dip in Gucci’s Q3 sales compared to Q2, during which Gucci sales rose by a whopping 86 percent, Kering pointed to the “successful launch of the Diana bag,” and “good sales momentum continued in North America and Western Europe, particularly with local customers” as wins for the quarter. Meanwhile, the group expects that the full launch of the Aria collection will set up Gucci “for an intense fourth quarter.”
Elsewhere under the Kering ownership umbrella, Yves Saint Laurent stood out with “an excellent quarter,” in which it “maintained its strong growth trajectory” by way of sales of 652.9 million euros ($760.07 million), up 28.1 percent on a comparable basis. Geographically speaking, Saint Laurent experienced “outstanding momentum continued in all geographic regions,” according to Kering, most notably in North America and Western Europe, as the brand “continues to reinforce its appeal in Asia-Pacific.” As for its offerings, Kering highlighted the brand’s “iconic products” as enjoying “sustained appetite from locals across all markets,” while newer collections are also being “very well received.”
In terms of Bottega Veneta, which reported revenue of 363.4 million euros ($423.03 million), up by 8.9 percent on a comparable basis, with its “balanced growth” driven by demand from “both existing and new customers.” Specifically, Kering asserted that Bottega’s “global brand strategy, [as well as its] focus on exclusivity, controlled distribution, and full-price sales” is paying off in the form of sales success “across regions and product categories” and close to double-digit growth.
Kering does not break out individual figures for Balenciaga or Alexander McQueen but they were the driving forces behind its grouping of “Other Houses,” for which revenue totaled 843.7 million euros ($982.14 million), with growth of an ever 26 percent on a comparable basis. Specifically, Kering asserted that the revenue for its “Other Houses” not only increased compared to Q3 2020 but also rose “very sharply relative to 2019, due notably to the ongoing expansion of Balenciaga and Alexander McQueen, whose sales continued to grow rapidly across all distribution channels.”
In other takeaways, Kering revealed that online sales for the quarter continued to grow at a “firm pace,” up 24.3 percent relative to the third quarter of 2020 and 147.9 percent relative to the same period in 2019. Shedding light on e-commerce penetration by region (i.e., e-commerce revenue as a percentage of total Q3 retail sales), Western Europe and North American were tied at 20 percent, followed by Asia Pacific at 9 percent and Japan at 5 percent. Also in terms of e-commerce capabilities, Kering noted that Q3 saw the “successful internalization of brand.com completed,” which has yielded “multiple benefits,” including reduced lead times as tied to the rollout of new omnichannel capabilities and services, and higher conversion rates.
Rival LVMH reported its Q3 earnings last week, posting sales of 44.2 billion euros ($50.9 billion) for the first nine months of 2021, up 46 percent from the same period in 2020 and up 11 percent from the first nine months of pre-pandemic 2019. During most recent 3-month quarter, which ended on September 30, the Paris-based conglomerate, which owns upwards of 75 luxury goods brands, revealed that sales grew by 20 percent to 15.51 billion euros ($17.90 billion), which appears to be something of a stabilization of the whopping 84 percent growth that it saw in Q2 of this year amid further loosening of pandemic restrictions and growth of vaccination campaigns.
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