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Kering’s Shares Surge as Investors Bet on Recovery in Luxury Goods Demand
Despite Global Economic Woes, Luxury Conglomerate Remains Positive
Kering, the French luxury conglomerate that owns brands such as Gucci, Saint Laurent, and Bottega Veneta, saw its shares surge by over 7% in early trading on Monday as investors bet on a recovery in demand for luxury goods. The stock price rise came as the company reported strong sales growth in the first quarter of 2023, with revenue rising by 23% to €5.3 billion.
The positive news from Kering comes despite ongoing global economic woes, including the war in Ukraine, rising inflation, and a slowdown in China’s economy. However, the company says it is confident that demand for its products will remain strong, driven by the continued growth of the global luxury market.
”We are very confident in the resilience of our business model and the long-term growth prospects of the luxury market,” said Kering CEO François-Henri Pinault. “We are seeing strong demand from all regions, and we are particularly encouraged by the growth in the Americas and Asia,” he added.
Gucci Continues to Drive Growth for Kering
Gucci, Kering’s largest brand, continued to be a major driver of growth in the first quarter of 2023. The brand’s revenue rose by 25% to €2.5 billion, benefiting from strong demand for its handbags, shoes, and ready-to-wear collections.
However, Kering’s other brands also performed well. Saint Laurent’s revenue grew by 23% to €880 million, while Bottega Veneta’s revenue increased by 24% to €397 million.
Analysts Positive on Kering’s Outlook
Analysts are positive on Kering’s outlook for the rest of 2023. They believe that the company is well-positioned to benefit from the recovery in demand for luxury goods, and they expect the company to continue to deliver strong financial results going forward.
”Kering is a well-managed company with a strong portfolio of brands,” said Luca Solca, an analyst at Bernstein. “We believe that the company is well-positioned to benefit from the recovery in demand for luxury goods, and we expect the company to continue to deliver strong financial results going forward,” he added.