Boucheron, Pomellato Post ‘Outstanding' Year for Kering

FinancialsFeb 15, 2023

Boucheron, Pomellato Post ‘Outstanding' Year for Kering

The luxury titan’s revenue was up 15 percent year-over-year, though sales slipped in the fourth quarter.

Pictured here is a diamond and emerald earring from Kering-owned Boucheron’s “New Maharajahs” high jewelry collection. Kering’s jewelry brands put on a strong performance in 2022, as per the company’s recent full-year results.
Paris—Kering posted strong full-year results Wednesday morning despite a mixed fourth quarter.

Its jewelry houses, which include Boucheron and Pomellato, had an “outstanding” year, noted the company.

Here are four important takeaways from the luxury titan’s most recent earnings report.

It was a good year for Kering, but a rough fourth quarter.

The luxury conglomerate owns several high-end brands, including Gucci and Yves Saint Laurent, as well as jewelry brands Boucheron and Pomellato.

Kering posted full-year revenue of €20.35 billion ($21.75 billion), up 15 percent year-over-year.

Revenue from its directly operated stores, which includes its e-commerce sites, was up 10 percent year-over-year on a comparable basis, driven by gains in Western Europe and Japan.

However, in the fourth quarter, revenue slipped 2 percent to €5.28 billion ($5.65 billion).

Kering noted mixed performances among its houses and regions.

Its star brand, Gucci, saw sales increase 8 percent for the full year, but fall 14 percent in the fourth quarter. Sales at the brand’s stores were down 15 percent, “significantly affected” by the COVID-19 situation in China during the quarter.

“All our houses posted record revenues and contributed to higher operating income in 2022. But these good performances were not uniformly up to our ambitions and potential,” said CEO François-Henri Pinault.

“Beyond the challenges some of our houses faced, notably towards the end of the year, we are convinced that we are pursuing the right strategy for the long term.”

Jewelry sales were strong in 2022.

The company’s jewelry brands fall into its “other houses” division, alongside Alexander McQueen and Balenciaga.

Its jewelry portfolio consists of Boucheron, Pomellato, DoDo, and Qeelin.

For the full year, revenue in the division totaled €3.87 billion ($4.14 billion), an 18 percent increase.

Growth was driven by Kering’s directly operated retail network, with sales up 27 percent on a comparable basis. Wholesale revenue slipped 6 percent.

In the fourth quarter, revenue in the division fell 3 percent to €951 million ($987 million).

In its directly operated stores, quarterly sales were up 2 percent, with double-digit growth in Western Europe and Japan. Wholesale revenue fell 26 percent.

“Kering’s jewelry houses once again achieved outstanding progress and reached significant milestones. Boucheron posted firm, steady growth, while Pomellato continued to perform well in Western Europe and Japan. Finally, Qeelin grew at a rapid pace,” said the company.

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Sales in North America were on the rise.

North America is Kering’s second-largest market, tied with Western Europe, and accounts for 27 percent of its annual revenue.

In 2022, sales in North America were up 5 percent year-over-year.

Asia-Pacific is the company’s largest market, comprising 33 percent of revenue, though sales in the region were down 8 percent for the full year.

Western Europe saw the strongest growth with revenue up 36 percent this year followed by Japan at 25 percent.

Kering has a positive outlook for 2023 despite an “uncertain” environment.

Though Kering did not share specific fiscal guidance for the year ahead, its CEO expressed confidence in the company’s performance.

Kering is able to “nurture the desirability and exclusivity of our brands, so they all achieve market positions commensurate with their unique heritage and recognized creativity,” said Pinault.

“In an environment that remains uncertain, I have no doubt that 2023 will be another year of success for our houses and of growth for our group.”

Kering said its two main goals for the year is to maintain its profitable growth trajectory and affirm its status as an influential group in the luxury world.

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