Gucci sales soar amid ‘extremely dynamic’ demand for luxury goods in China

Kering’s Gucci label continued to outpace competitors in the fourth quarter, giving another signal that Chinese appetite for luxury goods remains healthy.

Fourth-quarter sales at Gucci rose 28 per cent on an organic basis to €2.3 billion (US$2.6 billion), Paris-based Kering said on Tuesday. Analysts had expected 27 per cent growth.

The last of the major luxury-goods makers to report for 2018, Kering wraps up an unusually strong earnings season for the industry. The Gucci owner confirmed a trend seen at LVMH and Richemont, which indicated the Chinese are still buying high-priced items, but more on their own turf rather than on trips abroad. Facing a trade war with the US and a slowing economy, the government has been trying to promote more consumption in mainland China amid reports of tougher controls on undeclared imports.

Demand from Chinese clients remained “extremely dynamic,” and the “trend remains excellent” on the mainland, said chief financial officer Jean-Marc Duplaix.

The stock fell 3.7 per cent as of 9am in Paris, having gained 24 per cent in the past year. Expectations on luxury goods companies rose after LVMH’s leather-goods sales growth trounced estimates in late January.