Kering’s Jewelry Brands See Strong Q3 Growth

Paris—Kering’s sales growth slowed in the third quarter as sales in the Asia Pacific region faltered, but its jewelry houses still put on a strong performance.

The company behind Gucci, Saint Laurent, and other high-end brands posted third-quarter revenue of €4.19 billion ($4.87 billion), a 12 percent increase on a comparable basis and 10 percent higher than the third quarter of 2019.

“On the back of an excellent first half, Kering achieved a very solid third quarter at group level, up double digits over 2019,” said CEO François-Henri Pinault in a press release about the results. 

“Saint Laurent, Bottega Veneta, and our other houses, as well as Kering Eyewear, all posted outstanding performances,” he said.

Revenue from Kering’s directly operated stores, including e-commerce, were up 12 percent year-over-year and up 11 percent compared with 2019.

Online sales continued their growth trajectory, with third quarter revenue up 24 percent year-over-year.

In North America, e-commerce sales accounted for 20 percent of retail sales.

When compared with 2019, overall online sales nearly tripled, up 148 percent.

For the first nine months of the year, overall revenue was up 37 percent year-over-year to €12.24 billion ($14.23 billion).

The company’s watch and jewelry brands, including Pomellato and Boucheron, fall into its “other houses” division, alongside Alexander McQueen and Balenciaga.

Quarterly revenue in the “others” division rebounded, totaling €837.7 million ($981.4 million), a 26 percent increase year-over-year on a comparable basis. 

For the first nine months of the year, revenue in this category was up 48 percent year-over-year to €2.32 billion ($2.7 billion).

Sales in the category were up “very sharply” when compared with the third quarter of 2019, particularly due to the ongoing expansion of Balenciaga and Alexander McQueen.

Nonetheless, it was a strong quarter for its jewelry brands, with all seeing double-digit growth or higher on a one- and two-year basis, said Chief Financial Officer Jean-Marc Duplaix during the company’s earnings call.

“All jewelry houses delivered outstanding performances,” Kering said.

Boucheron’s new collections were met with high praise, especially in China and South Korea.

Pomellato’s classic collections drove its solid growth while its high jewelry offerings heightened its visibility, said Duplaix.
 
Qeelin saw “impressive growth,” with sales doubling compared with the third quarter of 2019.

Kering’s watch brands, including Ulysse Nardin and Girard-Perregaux, returned to growth.

Quarterly retail sales in the “others” division were up 24 percent while wholesale revenue was up 27 percent.

By region, third-quarter sales in North America were up 31 percent year-over-year.

In Asia Pacific, sales were up 1 percent, hampered by a rise in COVID-19 cases over the summer.

Sales in Western Europe were up 15 percent while sales in Japan were up 3 percent.

For the rest of the world, sales were up 24 percent.

The company recently announced it would no longer use fur as of fall 2022.

Kering has been looking to boost its sustainability efforts, joining forces with Richemont-owned Cartier to launch the Watch and Jewelry Initiative 2030 in partnership with the Responsible Jewelry Council, in an effort to set industry-wide sustainability goals.

“Sustainability is central to our strategy, and we achieved major new milestones in recent weeks. More than ever, we are investing to sustain our profitable growth trajectory over the long term and poised to successfully pursue our journey,” said Pinault.
 
Kering did not provide specific guidance for the fiscal year ahead.