Kering’s Revenue Declines in Q1, Gucci Brand Hit Hard
Kering, a renowned luxury goods conglomerate, reported a decline in its first quarter revenue, attributed to a challenging macro environment, weak retail traffic, and currency headwinds. The company’s revenue on a reported basis fell 11%, while on a comparable basis it declined by 10%, compared to the Bloomberg consensus of a 10.2% slide.
The decline was particularly impacted by the performance of its Gucci brand, which saw a 18% decline on a comparable basis. However, this was slightly better than the Bloomberg consensus of a 19.4% decline. Yves Saint Laurent’s revenue fell 6% year-on-year, while Bottega Veneta’s revenue increased by 2%. Other Houses revenue on a comparable basis fell 6%, while Eyewear & corporate revenue on a comparable basis increased 9%.
Revenue came in at EUR4.50 billion, down 11% year-on-year, missing the consensus estimate of EUR4.47 billion.
‘Kering’s performance worsened considerably in the first quarter,’ said Kering CEO François-Henri Pinault. ‘While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline.’
As a result, the company now expects to deliver a ‘sharply lower operating profit in the first half of this year.’ The Gucci parent company now expects a 40% to 45% decline in recurring operating income in the first half of 2024 compared to the first half of 2023.
