The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — Shares in luxury goods group Kering, which hit record highs last month, fell back sharply on Friday as traders said sales growth at Kering's Gucci brand had come in a bit weaker than forecast.
Kering shares were down 5.9 percent at 473.40 euros in early session trading. The stock hit a record high of 522.40 euros on June 15, and nevertheless remains up by around 30 percent since the start of 2018.
Kering reported late on Thursday higher first-half profits, helped by resilient sales in China.
Gucci's margins hit a record high of 38.2 percent at end-June. But its second quarter comparable sales growth of 40.1 percent was a touch below forecasts even as the label outperforms peers. Some traders said that was a trigger for investors to sell Kering shares and cash in on the stock's recent rally.
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"Gucci touch light, profit taking inevitable," wrote one trader, who declined to be named, in an emailed comment.
That view was echoed by analysts at Berenberg, who nevertheless kept a "buy" rating on Kering shares.
"Yet, despite its impressive H1 performance, with operating profit and free cash flow increasing by around 53 percent and around 65 percent year-on-year, respectively, the small organic miss at Gucci (40 percent versus consensus of 42 percent) has attracted all the attention," wrote Berenberg.
By Sudip Kar-Gupta; Editor: Sarah White.
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