KER Kering

By Joshua Kirby

Kering said Wednesday that it is confident of growth ahead after first-half revenue and earnings rose in line with expectations, despite slower sales in the second quarter amid lockdowns in China.

The French luxury-goods group made recurring operating profit of 2.82 billion euros ($2.85 billion) in the first half, up 26% compared with the year-earlier period. The operating margin rose to 28.4%, while net profit increased 34% to EUR1.99 billion, Kering said.

Second-quarter sales rose 12% on a comparable basis to EUR4.97 billion, a sequential slowing from the 21% booked the previous quarter, and in line with expectations of EUR4.84 billion, according to a pre-results poll of analysts' estimates taken from FactSet.

Main brand Gucci made quarterly sales of EUR2.58 billion, rising 4% on year, also in line with analysts' forecasts.

Kering noted the effects of lockdowns in China, but said retail growth elsewhere had more than offset the negative impact. In a call with reporters, Chief Financial Officer Jean-Marc Duplaix pointed to the very mixed results across different markets, with many stores closed in China in April and May, but said U.S. sales were strong and tourism in Europe continued to rebound.

"In a period of heightened macro uncertainty, Kering is in great shape to surmount short-term challenges, take advantage of new opportunities, and support the ambitious strategies and tremendous prospects of all our brands," the company said.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

July 27, 2022 12:01 ET (16:01 GMT)

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