PPR beats forecasts as Gucci and Yves Saint Lauren shine

City A.M. Reporter
FRENCH luxury and retail group PPR posted a forecast-beating current operating profit for 2010, boosted by a recovery in the luxury market and solid growth at its Puma sportswear brand.

The owner of fashion brands Balenciaga and Gucci and retailer Fnac posted a full-year current operating profit of €1.53bn (£1.28bn) – above expectations of €1.487bn based on an analysts’ poll.

It proposed a dividend of €3.5 a share, marking a 6.1 per cent increase against the previous year.

PPR did not give a precise target for 2011 aside from improving sales and profits against the previous year.

In the fourth quarter alone, the group’s luxury division Gucci Group enjoyed the strongest growth with a 14.4 per cent rise in comparable sales, driven mainly by smaller brands than Gucci such as Bottega Veneta, Yves Saint Laurent and Balenciaga.

Gucci Group’s fourth-quarter performance compared with growth of 16.7 per cent in the third quarter.

“The slowdown in the fourth quarter is smaller than expected in the luxury division,” said Natixis analyst Boris Bourdet. “Overall, [PPR’s results are] are better than expected.” PPR’s Puma also saw sales rises 10.6 per cent in 2010, with a net profit jump of 154 per cent.