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Luxury Retailer PPR's Sales Beat Expectations

Fashion-to-furniture retailer PPR beat forecasts with a 21.9 percent rise in third quarter sales and maintained its full-year outlook, saying credit market woes had not yet hit demand for luxury goods.

The owner of luxury brands like Gucci and Yves Saint Laurent said sales in the three months to Sept. 30 rose to 5.195 billion euros ($7.51 billion), above all forecasts in a Reuters poll of 10 analysts. On average, analysts forecast 5.145 billion euros.

"We are reasonably confident about sales in the fourth quarter and that is why we are maintaining our ambition to improve our results and cash flow for the year," Chief Financial Officer Jean-Francois Palus told journalists on a conference call. Margins were evolving well, he said.

PPR sales were boosted by its acquisition of a controlling stake in German sportswear maker Puma. During the quarter PPR raised its stake to 62.9 percent from 62.1 percent.

PPR said stripping out currency swings and the impact of the Puma acquisition, like-for-like sales would have risen 6.8 percent, also above the average forecast in the Reuters poll of a 5.4 percent rise.

Sales of flat screen televisions at books and consumer electronics chain Fnac and furniture retailer Conforama were lifted by the Rugby World Cup, hosted by France.

Puma sales at 670 million euros were a little lower than expected, but Gucci Group reported stronger-than-expected sales of 1 billion euros, a like-for-like rise of 15.9 percent.

Rival LVMH recently reported third-quarter sales at its larger fashion and leather goods division, built around Louis Vuitton, rose 14 percent.

"In a more difficult monetary environment, all regions and all brands grew," Palus said.

Comparable sales of Gucci grew "slightly" in the important luxury market Japan, Palus told journalists, but other brands reported strong gains, notably Bottega Veneta, with a like-for-like increase of 48.1 percent.

In a separate statement, Puma reaffirmed its full-year financial goals and beat market expectations with a 2.3 percent rise in third-quarter net profit.

In early trade, PPR shares were 0.4 percent higher at 132.04 euros, in line with the broader DJ Stoxx European retail index. PPR has outperformed the index by around 13 percent so far this year.