By Joshua Kirby

 

Kering said Thursday that it is aiming for core brand Gucci to up its revenue and profitability in the coming years, with growth driven by better sales density and higher retail and online sales.

The French luxury-goods group's aim is for Gucci to reach 15 billion euros ($16.1 billion) in sales in the medium term, it said during a capital-markets event Thursday. Other ambitions include an operating margin above 41%, Kering said.

In 2021, Gucci made revenue of EUR9.37 billion, more than half of Kering's total turnover of EUR17.65 billion, with an operating margin of 38.2%.

Revenue growth should be driven by higher traffic and new clients, notably men and high-income consumers, as well as by price increases and expansion of the store network, Kering said.

Sales density should increase by some 30% compared with 2021, the company said, adding that the brand aims to reduce wholesale sales to 6% compared with 9% last year and to boost e-commerce sales to some 16%-18% of the total.

Expansion in the brand's operating margin will meanwhile come through optimization of the gross margin, sustained brand investment and leverage of operational spending, Kering said. Capital expenditure should stay around 3% of total revenue, it added.

 

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

 

(END) Dow Jones Newswires

June 09, 2022 08:23 ET (12:23 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.
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