Kering shares surge as Gucci recovery drives return to growth

(Sharecast News) - Kering shares surged in Paris on Wednesday after the luxury goods group reported a return to comparable sales growth and pointed to improving momentum at its flagship Gucci brand.

First-half revenue came to �7.22bn, down 3% on a reported basis but 1% higher on a comparable basis. Second-quarter sales rose 2% comparably to �3.65bn, marking a sequential improvement from the opening three months of the year.

Recurring operating income was broadly flat at �921m, while the corresponding margin increased 40 basis points to 12.8%. Recurring EBITDA slipped 1% to �1.94bn.

Net income attributable to the group fell 60% to �189m, partly reflecting �223m of non-recurring operating expenses. Recurring net income declined 12% to �355m.

Gucci's first-half revenue dropped 5% comparably to �2.76bn, although its second-quarter decline narrowed to -2% from -9% in the first quarter, representing its strongest sequential acceleration in several quarters.

"Across the group, we are seeing early signs of progress in brand desirability, commercial momentum and operating performance. The quarter also showed sequential acceleration, including at Gucci, driven by the actions taken over recent months," said bosos Luca de Meo.

"While the market environment remains demanding, we are focused on delivering our roadmap with discipline and consistency, creating the foundations for sustainable growth and long-term value creation."

The stock was up 13.2% at �283.65 by 1153 BST.