Gucci shrugs off China troubles after trumping sales estimates

Sebastian McCarthy
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Breuninger Show - Platform Fashion July 2018
Like-for-like Gucci sales slowed down from the previous three months but trumped its peers as margins reached 39.5 per cent (Source: Getty)

Kering’s flagship Gucci brand became the latest in a swathe of luxury retail names to buck fears of a slowdown in demand from Chinese shoppers today, after the Italian label trumped sales expectations for the final quarter of 2018.

Outperforming many of its peers in the fourth quarter of last year, Kering posted a 23.3 per cent rise in organic sales to €3.8bn (£3.3bn), marking a higher figure than the 22 per cent estimates in a Bloomberg survey of analysts.

Like-for-like sales grew 28.1 per cent in the period, slowing down from the previous three months but beating its peers as margins reached 39.5 per cent in 2018.

Financial Director Jean-Marc Duplaix said: "Sales among our Chinese clientele remained very dynamic in the fourth quarter, even with a high comparison base."

Such comments underline recent trading results from European high-end fashion retail brands such as LVMH, Hermès and Richemont, which have all continued to benefit from Asian appetite despite a number of luxury carmakers and technology giants reporting waning demand from China’s middle classes.

Read more: Hermes posts huge profit spike

Kering’s shares, which have grown by a quarter in the last year, climbed 2.5 per cent in Paris this morning.

"While Gucci did not disappoint, it was only marginally above consensus and this might not be enough to please demanding market expectations," according to Citigroup analyst Thomas Chauvet.