Kering shares rebound from early losses as investors bet on China recovery
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.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or