By Scott Kanowsky
Investing.com -- Shares in Kering (EPA:PRTP) gained on Wednesday, reversing earlier losses, as investors were hopeful that the lifting of COVID-19 restrictions in China would help boost the fashion group's 2023 performance after worse-than-expected fourth-quarter results.
Revenue in the final three months of 2022 slumped by 2.3% to €5.28 billion (€1 = $1.0715), missing Bloomberg consensus forecasts of €5.5B. Kering's Gucci brand was hit particularly hard by the impact of COVID-19 rules in China, with sales at the division slipping by more than a tenth. Luxury house Balenciaga also had a "difficult" December, Kering flagged.
The quarterly top-line result pushed the full-year number up to €20.35B, an increase of 15% but still under estimates of €20.56B. Annual core earnings of €7.26B were below forecasts as well.
In a statement, Chief Executive Officer François-Henri Pinault said many of Kering's units faced "challenges," especially towards the end of the year, but added that he remained "convinced that we are pursuing the right strategy for the long term."
Kering doubled down on its plan to invest in the development of its brands despite "an environment of ongoing economic and geopolitical uncertainty in the near term."
In April, it will ask shareholders to approve a cash dividend of €14 a share, up from the interim dividend of €4.50 paid last month.
Analysts at Credit Suisse noted that many investors will choose to look beyond the weak 2022 figures and instead focus on the outlook.
“We continue to believe that this is an attractive story on a 12-month view,” the Credit Suisse analysts said.