Gucci Turnaround Buoys Kering

PARIS, France — French luxury-goods maker Kering SA reported first-half earnings that beat analysts' estimates on rising demand for Gucci loafers and Yves Saint Laurent fashions, helping it shrug off lower tourism in Europe.

Operating profit rose 4.9 percent to €811 million ($899 million), excluding one-time items, Kering said in a statement Thursday after European markets closed. Analysts expected €796 million. Second-quarter sales rose 6.9 percent, excluding currency shifts, acquisitions and disposals, besting the 3 percent gain anticipated by analysts.

Gucci chief executive officer Marco Bizzarri and creative director Alessandro Michele have led a turnaround of the brand that's overcome a slowdown in China, the strong dollar and terrorist attacks in Europe. Gucci posted a 7.4 percent sales increase in the quarter, fuelled by gains in Western Europe and a rebound in emerging markets, Kering said.

Bottega Veneta, which generates about one-fifth of Kering’s operating profit, is particularly affected by the slowdown of tourism flows as about three-quarters of the brand’s sales are to Asian buyers, according to Loic Morvan, an analyst at Bryan Garnier. The label’s comparable sales fell 9.8 percent in the quarter, Kering said, as performance was “heavily weighed down by lower tourism in Western Europe.”

Kering’s shares rose 0.8 percent to €160.55 in Paris Thursday.

By Corinne Gretler; editors: Matthew Boyle and Thomas Mulier.