Wednesday, April 28, 2010
2010 First Quarter sales
• Improving trends across all business units
Online sales rose by 14% on a comparable basis and accounted for 13% of total sales in the first quarter of 2010. PPR pursued its international development, notably in emerging countries, which accounted for 34% of Gucci Group sales in the period.
François-Henri Pinault, PPR Chairman and CEO of PPR, noted:
“The sharp improvement in sales of all of our businesses in the first quarter provides us with a solid platform to speed up revenue growth throughout the year. Our performances are largely due to the forceful sales and marketing action plans we initiated last year. We are continuing to actively implement these initiatives, while maintaining stringent cost-control efforts. With all these programs in place, we should deliver a healthy progression in operating and financial performances in 2010.”
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Fnac’s performance in the first quarter, with comparable sales up 1.6% (+2.4% in reported terms), builds on the improvement achieved in the second half of last year. In France, Fnac sales were roughly unchanged (-0.6%), with a sharp increase in online sales (+15%). The fnac.com site benefited from the successful launch of its marketplace section, whose scope was expanded in mid-February to include offers for smaller technical products. Sales of technical products in France were up, resulting in market share gains, whereas sales of editorial products were down. Fnac achieved another increase in sales outside of France, up 6.3% on a comparable basis. Sales rebounded sharply, significantly boosting market share, in Portugal and Spain. Brazil posted strong growth. Belgium, Italy and Switzerland achieved good starts to the year. In Italy and Spain, the launch of new Internet sites, leveraging the fnac.com platform, yielded promising results.
Redcats posted a notable improvement in activity in the first quarter, with comparable sales down just 0.5% (-2.6% in reported terms). Thanks to a renewed commercial offensive, La Redoute reversed earlier trends and posted stable sales in France this quarter. Outside of France, La Redoute achieved a 5% increase in sales in the quarter, boosted by online activity. Redcats achieved further sales growth in Scandinavia, up 1%. In the US, sales of Large Sizes rose 2%, driven by growth in home shopping, more than offsetting lower in-store sales. The Sports & Leisure division posted a slight drop in revenues from high comps in the first quarter of 2009. Redcats achieved another strong increase in online sales, up 12%, accounting for 51% of total sales in the quarter.
Now securely on the growth track, Conforama achieved its best quarter in two years and improved its performance month after month. Comparable sales were up 2.6% (+2.9% in reported terms) in the quarter. In France, sales were up 3%, with all product categories gaining market share, notably furniture, which had an outstanding performance. Online sales were up 46% in the period. Outside of France, Conforama sales rose 2.3% in the quarter, thanks to excellent performances in Spain/Portugal (+9%, or +25% restated for the closure of three stores in 2009) and Switzerland (+13%). In Italy, sales were down 11%; however, taking into consideration the closure of four stores last year, sales were down only 2% in the quarter.
In the first quarter, Puma comparable sales dropped 2.7% (-2.1% in reported terms). Activity in directly operated stores was impacted by store closures as part of the brand’s network optimization plan. Wholesale revenues were down slightly. In the Americas, sales grew by 10%, driven by good performance in Footwear. Sales were lower in Asia-Pacific (-8%) and EMEA
(-6%). Puma’s activity level should rebound in the second half of the year, reflecting sustained order levels in most regions.
Gucci Group recorded a good start to the year, with comparable sales up 6.1% (+4.7% in reported terms) in the first quarter. Each of the Gucci Group brands posted higher revenues month after month during the period. Sales through directly operated stores (DOS) grew 9%, reflecting the strength of the brands. Wholesale revenues were stable in the quarter, and orders booked for the Autumn/Winter collections achieved highly positive trends. Sales of Leather Goods grew 9%. While emerging countries continued to drive the growth in sales in the period (+15%), all mature countries apart from Japan also posted solid trend improvements. Fueled by sales momentum in Greater China (+39%), revenues were up 22% in Asia-Pacific excluding Japan, a region that accounted for 29% of Gucci Group sales in the first quarter of the year. At the end of March 2010, the Gucci Group DOS network encompassed 615 stores, including 157 in emerging markets.
In the first quarter of 2010, comparable sales of Gucci rose by 5.3% (+3.8% in reported terms). A global corporate advertising campaign highlighting the house’s unique craftsmanship heritage – “Forever Now” – was successfully launched in the quarter. Sales in DOS rose by 7%. Wholesale revenues rose slightly, while orders for the Autumn/Winter collection registered a double-digit increase compared to the prior year. Gucci recorded further strong growth in emerging markets (+16%), which accounted for 38% of its sales in the period. Sales rose 21% in Asia-Pacific excluding Japan, and 37% in Greater China alone, which accounted for 21% of Gucci sales. Western Europe, accounting for 30% of Gucci sales, posted solid growth (+11%). Sales of Timepieces, up 36% in the first quarter, confirmed the marketing momentum of this product category. At the end of March, the Gucci brand’s retail network comprised 284 stores, including 92 in emerging countries.
In the first quarter, comparable sales of Bottega Veneta rose 11.0% (+9.5% in reported terms). Sustained activity in the quarter was supported by an active communications strategy, which bolstered brand notoriety and enabled the house to record double-digit growth in all regions apart from Japan. In Asia-Pacific excluding Japan, now the house’s largest region (31% of sales), Bottega Veneta posted another quarter of outstanding growth (+26%). The brand posted 61% sales growth in Greater China, accounting for 17% of sales in the period. Sales rebounded sharply in Western Europe (+29%) and North America (+13%). All collections enjoyed strong starts to 2010. In Leather Goods, sales were driven by iconic handbags. Orders for the Autumn/Winter collection were highly promising. The Bottega Veneta DOS network comprised 137 stores at the end of March, including 39 stores in emerging markets.
Yves Saint Laurent
Comparable sales of Yves Saint Laurent dropped 0.7% in the quarter (-1.7% in reported terms). DOS sales grew by 12% with increases in all regions, including Japan. Wholesale revenues were down 19% in the quarter, but orders for the Autumn/Winter collection posted double-digit growth. Royalties from fragrances and cosmetics rose 8%. Sales of Leather Goods achieved further growth, fueled by continued demand for historical lines (Muse, Muse 2) and the successful launch of the Roady handbag. Asia-Pacific excluding Japan posted sharply higher sales (+19%) in the quarter, accounting for 14% of the total. Sales rebounded in North America (+10%) and Japan (+2%), but were down in Western Europe (-6%), due to a sharp drop in wholesale. Yves Saint Laurent operated 66 stores at the end of the quarter, and is pursuing the regional rebalancing of its network.
Comparable sales of the Gucci Group’s Other Brands rose by 8.9% in the quarter (+7.6% in reported terms). Balenciaga posted double-digit growth, driven by the extraordinary success of its collections and high visibility afforded by the launch of its new fragrance for women. Boucheron enjoyed a good start to the year in watches and jewelry; its Cirque du Soleil collection was praised around the world. At Sergio Rossi, sales were mixed by region. Alexander McQueen posted exceptional growth in the period. Stella McCartney had remarkable performances, notably in ready-to-wear and handbags. The DOS network of the Other Brands comprised 128 stores at the end of March.
Significant events since January 1, 2010
On March 10, 2010, Puma announced that it had signed an agreement with Acushnet, pursuant to which Puma acquired 100% of Cobra, a golf equipment maker. This acquisition encompasses the Cobra brand, inventories, intellectual property rights and contracts.
On March 25, 2010, PPR issued €500 million five-year fixed-rate notes bearing 3.75% interest.
Download the complete press release(.pdf 65Kb)
THIS PRESS RELEASE IS A FREE TRANSLATION OF THE FRENCH ORIGINAL PRESS RELEASE. THE ORIGINAL FRENCH VERSION OF THIS PRESS RELEASE IS AVAILABLE ON OUR WEBSITE ATWWW.PPR.COM
Certain information included in this release may be forward-looking and is subject to important risks and uncertainties and factors beyond our control or ability to predict, that could cause actual results to differ materially from those anticipated, projected or implied. It only reflects our views as of the date of this presentation. No undue reliance should therefore be based on any such information, it being also agreed that we undertake no commitment to amend or update it after the date hereof.
PPR will hold aconference callfor analysts and investors at6:00pm(Continental Europe); 5:00pm (UK); 12:00pm (East Coast, USA), onWednesday, April 28, 2010.
Conference call dial-in:
From France+33 (0) 1 70 99 42 73
From the UK+44 (0) 20 7138 0824
From the US+1 212 444 0481
Access code: 4702526
From France+33 (0) 1 74 20 28 00
From the UK+44 (0) 20 7111 1244
From the US+1 347 366 9565
Access code for the replay: 4702526# (available until May 18, 2010)
The slides (PDF format) will be available ahead of the conference call atwww.ppr.com
PPR develops a portfolio of high-growth global brands. Through its Consumer and Luxury brands, PPR generated sales of €16.5 billion in 2009. With approximately 73,000 employees the Group is present in 59 countries. PPR shares are listed on Euronext Paris (FR 0000121485, PRTP.PA, PPFP).
To explore the universe of PPR brands go towww.ppr.com: Fnac, Redcats Group (La Redoute, Vertbaudet, Somewhere, Cyrillus, Daxon, Ellos, The Sportsman’s Guide, The Golf Warehouse and brands of the plus-size division), Conforama, Puma and the Luxury brands of Gucci Group (Gucci, Bottega Veneta, Yves Saint Laurent, Balenciaga, Boucheron, Sergio Rossi, Alexander McQueen and Stella McCartney).
Charlotte Judet +33 (0)1 45 64 65 firstname.lastname@example.org
Alexandre de Brettes +33 (01) 45 64 61 email@example.com
Emmanuelle Marque +33 (01) 45 64 63 firstname.lastname@example.org