Strong Performance of Kering Eyewear Cited in Kering Group's 'Excellent' 2018 Results

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PADOVA, Italy—Kering Group, the global luxury group overseeing fashion brands Gucci and Saint Laurent, among others, reported strong financial results for 2018 on Tuesday, and noted the “excellent performance” of its Kering Eyewear segment in the period. The company noted that Kering Eyewear sales in 2018 were driven by Gucci and by the success of the new Cartier collection, according to an announcement. “2018 was an excellent year for Kering and its houses,” chairman and chief executive officer François-Henri Pinault said in the announcement.

“Once again, we significantly outperformed our sector. In an environment that was generally favorable but grew increasingly complex, Kering generated €2.8 billion in incremental revenues and €1.3 billion in additional EBIT compared to 2017.”

The announcement noted that Kering Eyewear sales added €391 million to consolidated revenue after eliminating intra-group sales and royalties paid to the Group’s Houses (€495 million before elimination). Kering Eyewear began as a “startup” under the Kering Group corporate umbrella in 2014.

In a presentation accompanying the financial announcement, Kering Group noted that its eyewear segment had an “outstanding performance in 2018,” with consolidated revenue increasing 46 percent on a comparable basis. Underlying the results were “very strong growth of Gucci” and the Cartier launch achieving “resounding success.” The company also noted that it has received an “enthusiastic reception of initial Balenciaga and Montblanc collections,” which will be available early this year. The fourth quarter was especially strong, with results “up 72 percent on a comparable” basis and double-digit growth in all regions and distribution networks.

Overall, Kering Group reported that consolidated revenue increased 29.4 percent on a comparable basis (26.3 percent on a reported basis) to €13,665.2 million, driven by all operational regions. In addition, Kering Group said it achieved “record-high profitability,” as recurring operating income doubled over the past two years and operating margins showed a “sharp rise” to 28.9 percent.

On a Euro basis, recurring operating income increased 46.6 percent to €3,943.8 million, and net income from continuing operations (excluding non-recurring items) totaled €2,816.7 million, according to the announcement.

Pinault added in the announcement, “Our healthy, balanced and profitable growth reflects skillful execution of our strategy, rigorous financial discipline, and a shared culture emphasizing responsibility and commitment. Having worked throughout the year to strengthen the group and its brands, we have the ambition and the means to sustain our profitable growth momentum.”