French luxury group Kering has accelerated sales of its Gucci brand, showing the industry is still thriving despite the Covid-19 pandemic.

This long awaited The Italian fashion house’s return helped the group beat analysts’ forecasts for annual sales and operating profit and proposed a dividend of 8 euros a share in 2020 to a record 12 euros a share in 2021.

The luxury industry has shrugged The economic shock of the pandemic on wealthy consumers in the U.S. and China, the two largest markets, has done little to slow their purchases of handbags, jewelry and clothing.

The biggest brands have been taking market share from smaller independent rivals after ramping up their marketing efforts and boosting their once-sleepy e-commerce businesses.

Kering’s annual net profit was 3.2 billion euros, in line with expectations. Annual revenue reached 17.6 billion euros, a 35% increase on a comparable basis from the 2020 pandemic trough and a 13% increase from the pre-crisis 2019.

This is only strong recovery Compared to 2020, organic revenue grew 36% last year and was 14% higher than 2019.

Things were less rosy, though, when Kering took on LVMH’s fashion and leather goods division, which owns its powerful brands Louis Vuitton and Dior. Last year, sales at the LVMH division rose to nearly 31 billion euros, a 42 percent increase compared to 2019. By comparison, Gucci’s revenue in 2021 was 9.7 billion euros, a 10 percent increase from 2019.

“We are not where we want to be, but we are definitely heading in the right direction,” said Kering CEO François-Henri Pinault, adding, The group is “very confident” it will “continue the rebound that started last year”.

Kering’s performance could boost the group controlled by the billionaire Pinault family and help it close the valuation gap with rivals.

Shares in the group were up nearly 6 percent in early Paris trading. They are up more than 27% over the past 12 months.

Prior to the results, shares of Kering had risen about 18% since the outbreak of the virus in early 2020, while LVMH and Hermès were up 71% and 114%, respectively. The stocks also trade at about 22 times forward earnings, about a fifth less than LVMH and two-thirds less than Hermès.

“Gucci is on the right track,” Citi analyst Thomas Chauvet said in a note. “While it is too early to draw conclusions about the success of Gucci’s ‘new chapter’ growth (which will be key in the next two to three quarters), the retail growth gap between Gucci and its best-in-class peers has narrowed.”

Investors have been concerned about the performance of Gucci, which accounts for more than half of the group’s sales and most of its profits, as growth slows after years of strong growth fueled by popular designs by creative director Alessandro Michele.

“It’s a small hit for Gucci and Saint Laurent, and the margins are in line,” said Jefferies analyst Flavio Cereda. “The numbers aren’t bad at all, but they’re still a long way from the industry leaders. “

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