* 2016 operating profit 1.886 bln euros, up 14.5 percent
* Gucci Q4 sales up 21.4 pct vs Rtrs estimates 13 pct
* Bottega Veneta to stabilise sales in 2017, more growth at
(Adds CEO, deputy CEO comments from news conference, analyst)
By Dominique Vidalon and Pascale Denis
PARIS, Feb 10 French luxury and sports brand
group Kering delivered a rise in 2016 profits and
sales on Friday that surpassed expectations, driven by the
revival of its biggest brand, Gucci, and strong sales at fashion
house Yves Saint Laurent.
Gucci, under the leadership of designer Alessandro Michele
and Chief Executive Marco Bizzarri since early 2015, has
revamped its stores and adopted a vintage "geek chic" look that
has proved popular with customers and driven higher sales.
"We recreated the Gucci dream. In 2017 we will make it a
booster of sustainable growth," deputy chief executive
Jean-Francois Palus told a news conference.
Gucci and Yves Saint Laurent now generate 50 percent of
their revenue from the tech-savy generations born after 1980.
Kering, also the owner of the Stella McCartney and Puma
brands, was upbeat despite what it described as an uncertain
The group said 2017 would see a stabilisation of falling
sales at underperforming Bottega Veneta, whose exclusive
positioning will be strengthened.
The strong results provided further evidence of a recovery
in the wider luxury goods sector, after rival LVMH
posted record revenue and profits for 2016 and Hermes gave a
confident outlook for 2017.
Chairman and CEO Francois-Henri Pinault was similarly
optimistic, citing positive signals in Hong Kong and improving
demand in China and the United States.
Recurring operating income for the year rose 14.5 percent to
1.886 billion euros ($2 billion) while group revenue rose 8.1
percent on a comparable basis to 12.385 billion euros.
This compared with expectations for 1.83 billion euros of
profit and 12.28 billion euros of sales according to a Reuters
consensus conducted with Inquiry Financial.
By 1324 GMT, Kering shares were 2.8 percent, after touching
a 16.5 year high of 235 euros, leading gainers on the CAC-40
index of French blue chips.
"Gucci is cashing in on a brilliant self-help programme,
which has brought back the brand on the map," said Exane BNP
Paribas analyst Luca Solca.
Fourth quarter comparable sales at Gucci, which makes over
60 percent of Kering's profit, rose 21.4 percent, beating
analysts forecasts for 13 percent growth and accelerating from
the third quarter.
In directly-operated stores sales climbed 28.2 percent in
the quarter, with all regions delivering good showings.
The performance was achieved despite Gucci's decision to
stop discounting and some 85 percent of Gucci sales in the
quarter were from its new Michele's collection.
Yves Saint Laurent, which accounts for over 10 percent of
Kering's luxury sales, continued to progress with new designer
Anthony Vaccarello at the helm since April.
Yves Saint Laurent sales rose 20.5 percent during the
quarter while the recurring operating margin of the division
jumped over the 20 percent mark for the full year.
Bottega Veneta remained a weak spot with sales down 8.6
percent in the quarter. The brand was hurt by a slowdown in
Chinese tourist spending in Japan and Europe. There were,
however, signs of an improvement in Chinese tourist spending in
western Europe in the last quarter of the year, the group said.
German sportswear firm Puma had strong sales
growth and gave a confident forecast for 2017 on
Pinault said the priority was to improve profitability at
Puma, when asked if he had any plans to sell the brand.
($1 = 0.9384 euros)
(Reporting by Dominique Vidalon; Editing by Andrew Callus and