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French luxury goods group booked strong double-digit sales growth in the first half of 2019 and a record operating margin of 29.5% – but investors have instead focused on a slowdown in sales growth at its key Gucci brand.

Total revenue generated by Kering’s brands in the six-month period amounted to EUR7.34bn (US$8.2bn), up 18.6% as reported and 15.2% on a comparable basis.

Growth was fuelled evenly by sales from directly operated stores and online (up 16.1% on a comparable basis), and wholesale (up 11.6% on a comparable basis). All of the main product categories contributed to the strong year-on-year revenue increase, along with robust growth in all geographic regions, particularly Asia-Pacific (up 24.5% on a comparable basis) and Western Europe (up 14%).

Gucci registered “another very good showing” in the first half of 2019, with revenue totalling EUR4.32bn, up 19.8% as reported and 16.3% on a comparable basis – although this represents a considerable slowdown on its 37% comparable sales growth last year.

In the first six months of 2019, Gucci generated more sales than for the whole of 2016, Kering noted.

Meanwhile, with revenue of EUR973m – up 20.4% as reported and 16.6% based on comparable data – Yves Saint Laurent maintained its buoyant growth trajectory. Sales at Bottega Veneta, however, fell 3.8% on a comparable basis and 0.6% as reported.

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By GlobalData

Revenue from the group’s other houses, meanwhile, rose 23.1% as reported and 20.3% on a comparable basis in the first half of 2019, reaching EUR1.23bn. Kering said the performance reflects strong momentum at Balenciaga and Alexander McQueen, as well as sales growth from its jewellery brands.

“In the first half of the year, we delivered another very strong set of results. Kering’s revenue growth handily topped market trends and was highly profitable,” says chairman and CEO François-Henri Pinault. “We created an additional EUR1.2bn in revenue in the six months, and our operating margin reached a record 29.5%.

“Our strategy is clearly paying off. The success of our brands, built on creativity, innovation, and customer dedication, along with rigorous execution and financial discipline, are delivering a superior combination of organic growth and sustainable profitability.”