Group revenue: €9,930 million
up 23% as reported and up 16% on a comparable basis
Recurring operating income: €2,820 million, up 26%
Recurring operating margin of 28.4%, up 60 basis points
Net income attributable to the Group: €1,988 million, up 34%
“The Group delivered sharply higher sales in the first half of 2022, sustaining last year’s topline momentum—solid performances in retail around the world more than offset the impact of Covid-related measures in China in the second quarter. We intensify our engagement with local customers across all markets, and we are also leveraging the nascent rebound in tourism in Europe. Each of our Houses contributed to the strong double-digit increase in Group operating income, leading to expanded margin for Kering as a whole. In a period of heightened macro uncertainty, Kering is in great shape to surmount short-term challenges, take advantage of new opportunities, and support the ambitious strategies and tremendous prospects of all our brands.”
François-Henri Pinault, Chairman & CEO
Gucci: ongoing brand elevation strategy
In the first half of 2022, Gucci’s revenue amounted to €5,173 million, an increase of 15% as reported and 8% on a comparable basis. Sales from the directly operated retail network rose 8% on a comparable basis, while Wholesale was up 9%.
In the second quarter of 2022, revenue was up 12% as reported and up 4% on a comparable basis. Growth in sales in the directly operated retail network were robust in Western Europe, Japan, and North America, more than offsetting the impact of lockdowns in China. Momentum was also very strong in Southeast Asia.
In the first half of 2022, Gucci’s recurring operating income totaled €1,886 million. Recurring operating margin was solid at 36.5%, as the House continues to invest to advance its brand elevation strategy.
Yves Saint Laurent: hitting new highs
Yves Saint Laurent’s revenue in the first half of 2022 totaled €1,481 million, up 42% as reported and up 34% on a comparable basis, reflecting the perfect execution of its strategy. Sales from the House’s directly operated retail network rose by 41% on a comparable basis. Revenue from Wholesale, currently being streamlined, grew by 10% on a comparable basis due to a very high level of orders.
Sales in the second quarter of 2022 rose by 40% as reported and by 31% on a comparable basis, driven by Western Europe, Japan and North America, while revenue in Asia-Pacific was stable compared to 2021. Growth was particularly strong in the directly operated retail network (revenue up 35% on a comparable basis), due to the success of all product categories.
Yves Saint Laurent’s recurring operating income was €438 million in the first half of 2022. Recurring operating margin was 29.6%, a first-half record level, up 3.3 points compared to the year-earlier period.
Bottega Veneta: exclusivity and solid growth
In the first half of 2022, Bottega Veneta’s revenue amounted to €834 million, an increase of 18% as reported and 13% on a comparable basis. Sales from the directly operated retail network were up 19% year-on-year. Wholesale revenue was down 4%, in line with Bottega Veneta’s strategy to streamline its wholesale distribution.
In the second quarter of 2022, Bottega Veneta’s revenue was €438 million, up 15% as reported and up 10% on a comparable basis. Sales momentum in the directly operated retail network remained very strong (revenue up 19% on a comparable basis), even though the number of stores was unchanged.
Bottega Veneta’s recurring operating income for the first half of 2022 totaled €168 million, and its recurring operating margin rose markedly to return to the 20% level.
Other Houses: outstanding results and exceptional potential
Kering’s Other Houses continued to achieve very strong growth, with revenue close to €2 billion in the first half of 2022, up 32% as reported and up 29% on a comparable basis. Sales from the Other Houses’ directly operated retail network rose by 38%, while Wholesale was up 16% on a comparable basis relative to the first half of 2021.
In the second quarter of 2022, sales of the Other Houses rose 28% as reported and 24% on a comparable basis. The revenue increase from the directly operated retail network remained strong (+33% on a comparable basis), with progress across regions. Both Balenciaga and Alexander McQueen maintained their very strong growth trajectories, and Brioni confirmed its rebound. While Qeelin was affected by the situation in China in the second quarter, Boucheron and Pomellato delivered very solid performances.
The Other Houses contributed significantly to the increase in the Group’s recurring operating income. They generated record recurring operating income of €337 million in the first half of 2022, an increase of 71%. Recurring operating margin was strong at 17.3%, an increase of 4.0 points.
Kering Eyewear and Corporate*
Revenue of the Kering Eyewear and Corporate segment in the first half of 2022 amounted to €591 million. Kering Eyewear’s revenue totaled €576 million, up 50% as reported including the integration of Lindberg, and up 26% on a comparable basis.
In the second quarter, growth in Kering Eyewear revenue continued, up 17% on a comparable basis, driven by the momentum of the brands in its portfolio. The acquisition of Maui Jim will be completed in the second half of 2022.
In the first half, Kering Eyewear’s recurring operating income more than doubled relative to the first half of 2021, reaching €111 million. The House benefited from the integration of Lindberg and from the seasonality of its sales, a majority of which occur in the first half of the year.
Corporate costs were stable.
* The “Corporate and other” segment was renamed “Kering Eyewear and Corporate” in the first quarter of 2022. Intragroup eliminations are now reported on a separate line.
Kering’s financial result, at just (€19 million), improved sharply in the first half of 2022.
The effective tax rate on recurring income was 27.5% during the period.
Net income attributable to the Group was strong at €1,988 million.
Earnings per share were up 36%.
Cash flow and financial position
The Group’s free cash flow from operations totaled €2,049 million in the first half of 2022.
As of June 30, 2022, Kering had a very robust financial position, with net debt of €942 million.
A major player in a fast-growing market around the world, Kering enjoys solid fundamentals and a balanced portfolio of complementary brands with strong potential. Its strategic priorities are straightforward. The Group and its Houses seek to achieve same-store revenue growth while ensuring the targeted and selective expansion of their retail networks. Kering aims to grow its Houses in a sustainable manner, enhance the exclusivity of their distribution and secure their profitable growth trajectories. The Group is also investing proactively to develop cross-business growth platforms in the areas of e-commerce, omnichannel distribution, logistics and technological infrastructure, digital expertise and innovative tools.
The 2020 public health crisis and subsequent economic disruption have had major consequences on consumption trends, tourism flows and global economic growth.
More favorable trends, which emerged in the second half of 2020, were confirmed in 2021 and in early 2022. Although these trends remain conditioned by developments in the public health situation and associated restrictions across countries, the luxury market has witnessed a significant rebound, driven by consumer appetite for premium goods and a gradual upturn in tourist flows, particularly in Europe.
In an increasingly uncertain macroeconomic context, the Group is continuing to implement its strategy with determination and will continue to manage and allocate its resources to best support its operating performance, continue generating significant cash flow, and optimize its return on capital employed.
Thanks to its strong business and organizational model, along with its robust financial position, Kering remains confident in its growth potential for the medium and long term.
In its meeting on July 27, 2022, Kering’s Board of Directors, chaired by François-Henri Pinault, approved the consolidated financial statements for the first half of 2022 following a limited review.
The Board of Directors also noted Jean Liu’s resignation from her role as Director. François-Henri Pinault offered her his sincere thanks for her contribution to the Board’s work (see “Meeting of the Board of Directors” on page 9).
A global Luxury group, Kering manages the development of a series of renowned Houses in Fashion, Leather Goods and Jewelry: Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, as well as Kering Eyewear. By placing creativity at the heart of its strategy, Kering enables its Houses to set new limits in terms of their creative expression while crafting tomorrow’s Luxury in a sustainable and responsible way. We capture these beliefs in our signature: “Empowering Imagination”. In 2021, Kering had over 42,000 employees and revenue of €17.6 billion.
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