Gucci's Two Quarter Slowdown Only Recorded An Increase Of 12.7%.

Gucci's two quarter revenue is on the streets, but it may not be a bad thing.

Italy brand Gucci maintained the 11 quarter luxury industry "bright lights" extinguished. Under the high base and high expectations, the 12.7% quarter comparable growth failed to satisfy the market. In the two quarter of the Gucci slowdown, LV and Herm s s accelerated growth in the two quarter.

Herm's s International SCA (HRMS.PA) Hermes International Group achieved 1 billion 674 million 500 thousand euros in the two quarter, an increase of 14.7% over the same period last year, and an increase of 12.3% after the impact of the exchange rate. After a slight increase in the first quarter compared with the 11.6% increase in the first quarter, analysts predicted that the growth rate could only be flat in the first quarter of 1 billion 459 million 600 thousand.

The results of LVMH Mo? T Hennessy Louis Vuitton SE (MC.PA) Lu Wei Ming Xuan released the first day showed an organic increase of 12% in the two quarter, faster than the 11% in the first quarter, exceeding the 10% expected by the market. Leather goods and fashion sectors performed best in the first half of the year, organic growth of 18%, and 20% in the two quarter.

In the first quarter, 20% of the comparable growth hedges, Gucci increased by 16.3% in the first half of the year, losing the largest leather rival LV's fashion department.

Kering SA (KER.PA), Jean-Marc Duplaix, chief financial officer of Kai Yun group, said that the slowdown in Gucci was mainly due to the weakness of local tourists in the US market, resulting in a 2% decline in the brand in the region. He also warned that all brands have similar situations, and the US market will become increasingly difficult.

The Asia Pacific market slowed more sharply in the two quarter, from 23% in the first quarter to 23% in the first quarter, but the 29% growth in the medium term is still the best market.

Compared with the weak earnings season, Gucci is still the most daring to face the reality of the brand. Jean-Marc Duplaix has revealed the key to the growth of the luxury industry, advertising investment. But he said that the US market needs to be evaluated because the marketing investment return rate of the market is very low.

In the first half of 2019, Gucci cut a lot of advertising in the US market, but plans to reinvest in the second half of the year.

Despite its strong growth in the two quarter, the company's operating profit margin dropped 110 basis points to 31.2% in the first half of the year, and its operating profit increased 17% to 3 billion 248 million euros. During the period, the group's sales and marketing fees rose 9 billion 563 million euros, an increase of 15.1% over revenue growth.

Tang Xiaotang, a No Agency analyst who has warned investors to pay close attention to marketing costs since 2017, said that the fashion industry has become more and more like the technology industry. Although it is still profitable, it will not lose money, but investment in marketing advertising has become frenzied, and this pattern is not sustainable for a long time.

"Just like competing for star traffic in China, this is a very bad industry phenomenon. In the plane, it is totally unprofitable. Once the growth path of profit, income and investment from strong to weak is reversed, the Domino dominoes will fall. On Thursday, the analyst commented on the performance of Lu Wei Hun Xuan, pointing out that although the investment in the luxury sector is crazy, it has been slightly better than the high-end cosmetic industry.

In the first half of this year, the Gucci operating profit rate reached a new high, and 40.6% rose 220 basis points on a yearly basis. The adjusted 40.4% also increased by 220 basis points, operating profit increased by 26.7% to 1 billion 876 million euros per year, accounting for 83.3% of the group's mid term operating profit.

Jean-Marc Duplaix said that the Gucci profit margin will be further improved in the second half of the year, as the efficiency of the new concept stores has been greatly improved. At the same time, Gucci launched color and high-end jewelry business in May and July respectively. These two industries are very strong at present.

Tang Xiaotang said that from the analyst's conference call, Gucci is still the best brand, leading the industry's revenue growth, leading completely from product and business mode. On the contrary, LV and Prada are now repeating the old road of Gucci, and Gucci has been the first to start to pay more attention to profit margins. I believe that Gucci will continue to lead the revenue in the past three years in terms of profit and profit margins.

Kai Yun group's overall operating profit in the first half of the year was 2 billion 252 million 700 thousand euros, compared with 1 billion 797 million 700 thousand euros in the 2018 fiscal year, an increase of 25.3%, operating profit margin of 29.5%, up 160 basis points compared with the same period last year, and the EBITDA profit margin also improved by 30 basis points to 36.8%.

Francois-Henri Pinault, chief executive of France Group, praised the strong performance in the first half of the statement, but rarely mentioned "financial discipline".

Due to tax inspection by the Italy authorities, the net profit in the first half of the year dropped by 75.3%, from 2 billion 344 million 900 thousand euros to 579 million 700 thousand euros, excluding the provision for tax clearance and reconciliation. The net profit in the interim increased by 24.7% to 1 billion 556 million 100 thousand euros per Annex, and 1 billion 247 million 500 thousand euros in the same period in the 2018 fiscal year.

The Bottega Veneta Bao family, which has been in the doldrums for three years, has slightly improved in the two quarter. On a low base, the growth rate was positive, increasing by 0.8% a year, and 8.9% in the first quarter. Among them, the Asia Pacific market dropped 1% in the two quarter, and plunged 11% in the first quarter. The only medium term operating profit 18.9% was down 60 basis points, and the 18.3% decline after adjustment was as high as 570 basis points.

The brand has just appointed a new CEO in mid 6. Kai Yun group has been promoted internally. The 48 year old Bartolomeo Rongone, who is the chief operating officer of Yves Saint Laurent of Kai Yun group, will be the chief executive officer of Bottega Veneta since September 1st, and its predecessor, Claus-Dietrich Lahrs, will leave the company due to "personal reasons for more time to accompany family members and accept new challenges".

The second major brands, Saint Laurent Saint Laurent, showed a very stable performance, an increase of 15.8%, slightly slower than the 17.5% in the first quarter. The operating profit of the brand in the first half of the year rose 24.3%, better than sales growth, from 203 million euros to 252 million euros, operating profit margin 25.9%, an improvement of 80 basis points, an increase of 90 basis points after adjustment.

In the first half of 2019, the overall revenue of Kai Yun group was 7 billion 638 million 400 thousand euros, up 18.8% from 6 billion 431 million 900 thousand euros in the first half of 2018.

Gucci growth slowed down, and Kering SA (PPRUY.OTC) opened cloud group's share price plunge 8.55% in the US stock market, while LV despite its strong performance, the market still complained of its low profit margin. On Thursday, LVMH Mo t Hennessy Louis Vuitton SE (L) road Wei Ming Xuan fell 1.09% euro 376.15, indicating the trend of investors. Author: He Wei