(Reuters) -Shares in Kering rose on Wednesday with analysts suggesting investors are looking past another weak quarter of earnings at the luxury goods conglomerate towards hopes for a turnaround.
“The market is trying to look forward and anticipate future improvements,” Bernstein analyst Luca Solca said, after the Gucci parent reported after Tuesday’s market close a 15% drop in quarterly group revenues, falling short of market expectations.
In an attempt to revive declining sales and cut debt, Kering has appointed former Renault chief executive Luca de Meo to head of the whole group from September – the first outsider to run the company controlled by the billionaire French Pinault family.
It also hired Demna as creative director at its crown jewel business Gucci. Demna will present a new fashion show in March, Kering said, with a full collection shown through a presentation format in September.
“The market will likely shift focus to continued cost discipline, the imminent arrival of new CEO Luca de Meo … and another attempt at relaunching Gucci,” said Thomas Chauvet at Citi.
Kering shares, which had lost more than 50% of their value since the beginning of last year, were up about 5% by 0927 GMT, making them the second-best performers among France’s blue chips.
Kering’s results on Tuesday showed a 25% decline in second-quarter sales at Gucci to 1.46 billion euros ($1.69 billion). However, it said it saw a slight improvement at the brand going into the third quarter.
First-half results showed “early signs of stabilisation at Gucci”, UBS analysts said, citing cost control and improvement in retail sales. The analysts added that their estimates would not move down “for the first time in a while.”
“Although there is still a lot of uncertainty and work ahead … (the first half) left us feeling somewhat more positive,” they said.
($1 = 0.8657 euros)
(Reporting by Piotr LipinskiEditing by David Holmes)
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