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Valentino Sales up 10% In 2022 Boosted by Directly-Owned Shops

Models present creations from Valentino's "The Beginning" Fall-Winter 2022/2023 Haute Couture collection during a show on a catwalk on the Spanish Steps in the historic center of Rome, Italy July 8, 2022. (Reuters)
Models present creations from Valentino's "The Beginning" Fall-Winter 2022/2023 Haute Couture collection during a show on a catwalk on the Spanish Steps in the historic center of Rome, Italy July 8, 2022. (Reuters)
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Valentino Sales up 10% In 2022 Boosted by Directly-Owned Shops

Models present creations from Valentino's "The Beginning" Fall-Winter 2022/2023 Haute Couture collection during a show on a catwalk on the Spanish Steps in the historic center of Rome, Italy July 8, 2022. (Reuters)
Models present creations from Valentino's "The Beginning" Fall-Winter 2022/2023 Haute Couture collection during a show on a catwalk on the Spanish Steps in the historic center of Rome, Italy July 8, 2022. (Reuters)

Italian fashion house Valentino reported on Monday an 18% rise in core profit for 2022 as sales rose 10% at constant currencies, boosted by its directly operated shops and defying a weak Chinese market.

Controlled by Qatari investment vehicle Mayhoola, Valentino reported preliminary revenue of 1.42 billion euros ($1.56 billion) last year.

Sales in shops the group manages directly, including online ones, grew twice as fast as overall revenue, while the wholesale channel posted a 6% drop.

"Geographically speaking, Europe, North America, and the Middle East lead the way, while Greater China was still shaky tied to Covid," it said.

Core profit came in at 337 million euros, up by nearly a fifth from the previous year, while operating profit grew 30% to 121 million euros.

Valentino, led since mid-2020 by CEO Jacopo Venturini, a former Gucci executive, has been "reducing the wholesale activity to focus only on a selected partnership distribution", it said in a statement.

Directly operated shops accounted for 62% of sales in 2022 compared to 54% in 2019.

Under Venturini, Valentino went fur-free in 2022. It also decided to focus on the main Valentino line, ending the REDValentino one, aimed more at younger customers, with the fall-winter 2023-24 season.

During the course of last year, it kicked off its e-commerce internalization program starting with Japan and expanding it to the United States and the rest of the world.

Valentino also said it had overhauled its remuneration policy to introduce for the first time a pay-for-performance structure.

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Fashion

Estee Lauder Sees Bigger Sales Fall in 2025 on US Slowdown, Sputtering China Recovery

An Estee Lauder cosmetics counter is seen in Los Angeles, California, US, August 19, 2019. (Reuters)
An Estee Lauder cosmetics counter is seen in Los Angeles, California, US, August 19, 2019. (Reuters)
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Estee Lauder Sees Bigger Sales Fall in 2025 on US Slowdown, Sputtering China Recovery

An Estee Lauder cosmetics counter is seen in Los Angeles, California, US, August 19, 2019. (Reuters)
An Estee Lauder cosmetics counter is seen in Los Angeles, California, US, August 19, 2019. (Reuters)

Cosmetics giant Estee Lauder forecast a bigger-than-expected drop in fiscal 2025 sales on Thursday, signaling a slowdown in demand for beauty products in the American market and a longer road to recovery in the key China region.

Estee has been struggling to revive sales at airports and tourist hubs in China and other major Asian markets as consumer sentiment in the region remains weak due to high unemployment rates. Asia-Pacific, which includes China, contributed 31.3% of the company's total sales in fiscal 2024.

Its sales have also been soft in the US, with the company now facing challenges from President Donald Trump's chaotic implementation of tariffs.

Estee had pulled its annual forecast in October, citing an uncertain recovery in China, before Stephane de La Faverie took over as CEO.

His turnaround plans for the company include speeding up of new launches and bringing in new luxury price tiers. But that might face a roadblock from growing economic uncertainties due to the trade war.

Organic net sales in the Americas fell 5% on retail softness and decline in consumer confidence and sentiment.

"From a regional perspective, the Americas had the largest miss and EMEA (Europe, Middle East and Africa) was only slightly softer ... Outperformance on margins show the progress of EL's PRGP (profit recovery plan) and restructuring activities," RBC Capital Markets analyst Nik Modi said in a note.

European peer L'Oreal has also flagged weakness in the US, while it continues to see strong demand for its creams and perfume in Europe.

Estee expects fiscal 2025 net sales to be down 8% to 9%, compared with analysts' estimate of a 7.07% fall, according to data compiled by LSEG.

The company forecasts annual adjusted per-share profit to be between $1.30 and $1.55, with midpoint above the estimate of $1.40, as it starts to benefit from its restructuring plan, including job cuts.

Shares of the MAC lipstick maker were down nearly 1%.

Estee aims to return to sales growth in fiscal 2026, its CEO said, adding that this depends on the resolution of the recently enacted tariffs to mitigate potential negative impacts.

The US has imposed 145% tariffs on China, while Beijing put a 125% levy on American imports into the country.

To navigate the tariff situation, Estee expects to reduce imports into China from the US to 10% from 25%.

Estee said about a quarter of products imported into EMEA are sourced from the US, but it is working to change to regionalized and third-party manufacturing networks.