PARIS (Reuters) -Shares in Gucci owner Kering rose by as much as 9% in early Paris stock market trade on Thursday after the company reported sales in the last quarter had declined less than analysts had expected, extending a rally that started when Luca de Meo was hired to restructure the group.
The trading update late on Wednesday that showed a 5% overall sales decline was the first under the leadership of CEO Luca de Meo, who took office in September.
Kering’s shares have nearly doubled since Kering’s chairman and controlling shareholder Francois-Henri Pinault announced in June that Meo would take over as CEO.
“There is a lot to like in the Kering story and in these results,” said analysts at Deutsche Bank, pointing to positive signals from Gucci, including the success of new handbag models.
Citi analysts highlighted a “noticeable lack of earnings downgrades for the first time in over three years” but said they “would not chase” what they described as a FOMO, or fear of missing out, rally, until full-year results and the company’s new strategic plan, which is expected early next year, were announced.
De Meo, a former auto executive with no experience in the luxury sector, has said he will act quickly and not wait until the strategic plan is public to take big decisions.
At the weekend, it was announced that Kering had struck a $4.7 billion deal to sell cosmetic and fragrance brands to L’Oreal.
(Reporting by Tassilo Hummel; Editing by Benoit Van Overstraeten and Barbara Lewis)
