Luxury brands push PPR profits up 28 percent

8th March 2007, Comments 0 comments

PARIS, March 8, 2007 (AFP) - The French PPR luxury products group, owners of the Gucci and Yves Saint Laurent brands, said on Thursday that it had boosted net profits last year by 28.0 percent to 685 million euros.

PARIS, March 8, 2007 (AFP) - The French PPR luxury products group, owners of the Gucci and Yves Saint Laurent brands, said on Thursday that it had boosted net profits last year by 28.0 percent to 685 million euros.

Operating profits by the top brand businesses in the group shot up by 44.2 percent.

The net profit, equivalent to 904 million dollars, surprised analysts who had expected on average an outcome of 646.4 million euros.

Current operating profit rose by 19.9 percent to 1.275 billion euros. Net profit excluding non-recurrent items rose by 31.5 percent to 698 million euros.

Company president Francois-Henri Pinault said that the group wanted to raise operating and financial performance further and "increase substantially the creation of value," but did not provide targets.

The group said that the trend of distribution activities in the first two months of 2007 was slightly stronger than in the fourth quarter of last year and that activity in the luxury products sector was broadly "in line."

The luxury brands, based on Gucci, Bottega Veneta, Yves Saint Laurent and YSL Beaute, raised current operating profit by 44.2 percent to 565 million euros, exceeding overall expectations by analysts.

All brands in the group had increased their results, PPR said.

But Yves Saint Laurent reported a loss of 49 million euros, a reduction of the loss in 2005, finance director Jean-Francois Palus said.

In 2007, PPR intended its luxury activities to exceed the average growth of the luxury sector worldwide, Palus said.

The non-luxury retail division based on the Fnac, CFAO, Conforama and Redcats distribution activities, increased current operating profit by 4.0 percent to 759 million euros, in line with forecasts by analysts.

This had been achieved through a "very significant" improvement in the performance of Fnac and CFAO.

PPR said that this year it would renovate many of its outlets, particularly under the Gucci and Conforama brands.

And it said that last year it had generated free operating cash flow of 1.070 billion euros.

The board recommended an increase in the dividend of slightly more than 10.0 percent to 3.0 euros.

Copyright AFP

Subject: French news

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