* PPR Q1 sales up 3.1 pct at 2.365 bln euros
* Gucci Q1 sales up 4 pct vs growth forecasts of 5-6 pct
* Puma Q1 sales down 2.5 pct
(Adds CFO comments, details, context)
By Astrid Wendlandt
PARIS, April 25 PPR missed
first-quarter sales forecasts, particularly for its Gucci
fashion label and Puma sports brand, hit by sluggish trading in
Europe and slower growth in China.
The French group, which also owns fashion houses Yves Saint
Laurent and Bottega Veneta, said on Thursday it had not noticed
any improvement in China, still the luxury industry's main
engine of growth despite a recent moderation in demand.
"We do not see any signs of a pick-up in China," Chief
Financial Officer Jean-Marc Duplaix told reporters in a
PPR's comments echoed those from archrival LVMH,
which pointed to slower sales growth in Europe and forecast
little improvement in China in the near future.
The latest raft of trading updates from listed luxury groups
including Hermes indicate their brands in China have
been hit hard by the government's crackdown on conspicuous
consumption and on the country's gifts-for-favours custom.
And based on luxury executives comments, the cultural shift
could last some time.
Luxury watchmakers said this week they expected sales growth
to slow this year as recovery in the United States and buoyant
Middle Eastern demand fail to offset what appears to be a
deep-rooted slowdown in China.
But in the North American luxury market, which looks
resilient when compared with crisis-hit Europe, PPR said trends
remained positive with revenues from that region up 8 percent.
PPR said luxury goods sales in China rose around 10 percent
in the first quarter but in Europe they were up only 3 percent,
due to lower local demand and a drop in tourist flows.
Gucci, the world's second largest luxury brand after LVMH's
Louis Vuitton, saw 9 percent sales growth in North America and 5
percent in Japan and its performance was in "high single
digits," in China.
Last year, Gucci's first-quarter sales were up 15 percent in
China and up 52 percent during the same period in 2011.
PUMA SALES DOWN
Regarding Puma, the group said the bulk of the brand's
underperformance was due to weak demand in Italy and France.
"The division has been affected by a depressed economic
environment in Europe," Duplaix said.
Puma closed 45 unprofitable shops in the first quarter and
PPR said it aimed to close almost as many in the near future.
The French group has poached the chief executive of Danish
jeweller Pandora to help turn round Puma's
PPR posted total first-quarter like-for-like sales up 3.1
percent, undershooting forecasts of 5 to 6 percent.
Gucci's sales were up only 4 percent against expectations of
a 6 percent rise, slowing from 8 percent the previous quarter.
"This is disappointing as PPR had been outperforming the
luxury goods sector for several quarters," one London-based
PPR's sports and lifestyle division, which includes its near
80 percent stake in Puma, saw first-quarter sales fall
2.5 percent against forecast growth of 1 percent. Sales at Puma
alone were down 2.3 percent on a like-for-like basis.
PPR is changing its name to Kering in June to mark the
completion of its transformation from a retailer to a sports and
This week, it agreed to acquire control of Milanese jeweller
Pomellato for an undisclosed sum, making good on its pledge to
expand in the fast-growing branded jewellery market.
Looking ahead, the group pledged to remain vigilant on costs
and improve financial results in 2013.
PPR shares, which gained 26 percent since the beginning of
the year, closed up 0.54 percent at 178.5 euros.
(Editing by Greg Mahlich and Mark Potter)