By Dhirendra Tripathi
Investing.com – Kering (PA:PRTP) stock climbed 6.5% in Paris trading Thursday as its flagship Gucci brand posted an impressive comeback on its 100th birthday.
The luxury retailer made full use of the surging demand with prices hikes in select brands to overcome cost pressures. Chief Financial Officer Jean-Marc Duplaix is not ruling out more price hikes this year, according to Bloomberg.
Gucci powered Kering’s 32% jump in comparable fourth-quarter revenue to 5.41 billion euro ($6.14 billion) and according to Bloomberg, the company’s biggest brand will probably make targeted price hikes in 2022, after boosting prices twice last year. Quarterly revenue was up some 13% from pre-pandemic levels in 2019. Operating margin for the year widened by 4.5 percentage points to exceed 28%.
Gucci’s own revenue rose 32% in the quarter, which the company attributed to “intense schedule of events and new product launches.”
The reference to ‘intense schedule of events’ relates to the September release of Gucci’s Aria ready-to-wear collection that generated buzz and sales, while Lady Gaga-starrer “House of Gucci,” also drew attention to the brand.
Gucci accounted for 57% of the group’s revenue in 2021. Revenue at Yves Saint Laurent, Kering’s second-biggest brand, rose 47% in the final quarter of 2021.
Kering has underperformed rivals LVMH and Hermes all through the pandemic, and has spent heavily on Gucci in particular in the last year to reinject momentum into the business and close a widening gap in relative valuations.