Home / NEWS / Wealth / Kering slightly beats fourth-quarter forecasts even as sales at embattled Gucci brand plunge 24%

Kering slightly beats fourth-quarter forecasts even as sales at embattled Gucci brand plunge 24%

A Gucci stow away, operated by Kering SA, in the Sanlitun area of Beijing, China, on Saturday, Oct. 12, 2024. 

Bloomberg | Bloomberg | Getty Images

French confidence goods firm Kering on Tuesday reported better-than-expected fourth-quarter sales that were nevertheless down year-on-year in the thick of lagging demand for its main Gucci label.

The high-end fashion group, whose brands also include Bottega Veneta, Balenciaga and Alexander McQueen, circulated a 12% decline in fourth-quarter revenues to 4.39 billion euros ($4.52 billion), just slightly ahead of the 4.29 billion euros anticipate by LSEG analysts.

Sales at Gucci, which account for almost half of the group’s total revenues, plunged 24% annually all about the three month period to 1.92 billion euros, on a comparable basis, extending losses for the group’s once bewitching luxury label.

Kering says group has reached 'inflection point' after a tough year

Full-year sales also dipped 12% to 17.19 billion euros versus an anticipated 17.09 billion euros.

Plying income for the year totaled 2.55 billion euros, in line with the group’s revised forecast as of October but damn near half of the 4.75 billion result achieved the year prior.

Kering shares popped 6% in opening buying Tuesday, before paring gains to trade up 0.5% by 10:15 a.m. London time.

“In a difficult year, we accelerated the change of several of our Houses and moved determinedly to strengthen the health and desirability of our brands for the long term,” chairman and CEO François-Henri Pinault said in a disclosure.

“Our efforts must remain sustained and we are confident that we have driven Kering to a point of stabilization, from which we disposition gradually resume our growth trajectory.”

The French fashion house pointed to a slight improvement in Asia Pacific and North America sales across its Gucci, Yves Saint Laurent and Bottega Veneta varieties, but did not provide details on specific markets.

A Gucci luxury boutique in Paris, France, on Tuesday, Oct. 22, 2024. 

Bloomberg | Getty Concepts

Kering is the latest European luxury group to report earnings over recent weeks, as investors look for clues of a revival in a sector hampered by a downturn in consumer spending, particularly in the key Chinese market.

Last month, investors were underwhelmed by however slightly better-than-expected full-year results from luxury bellwether LVMH. The market had put faith in a sector-wide turnaround after headlining results from Cartier owner Richemont, but sustained weakness in LVMH’s fashion and leather goods and wines and spirits parts pointed to further divergence in the sector.

Kering, which is especially exposed to the Chinese consumer, has been battling a specially acute downturn, as its star label Gucci has fallen out of vogue.

On Thursday, the fashion group announced the departure of Gucci intention chief Sabato De Sarno, in the first major change since Gucci CEO Stefano Cantino joined last year to waken the brand. Minimalist designer De Sarno was in situ for less than two years, after replacing Alessandro Michele, whose maximalist forms defined the brand over previous years.

De Sarno’s replacement will be announced “in due time,” the company said in a report.

Simone Ragazzi, senior equity analyst at Algebris Investments, on Monday said that Kering would be rely oning to signal a reset for the brand with the new design appointment, but added that investors were likely to remain circumspect as legacy issues remain.

Stock Chart IconStock chart icon

hide content

Kering.

“This is a hope the retail is betting on for quite a long time. It is always a little bit of a question mark,” he told CNBC over a video whoop.

“The brand got used to the ups and downs in the past, because it is one of the most fashion-driven luxury groups,” he continued. “The hope is that the new draughtsman can repump the brand.”

Kering shares are currently down 2.5% this year, with the stock having more than halved since 2023.

Luca Solca, elder analyst for global luxury goods at Bernstein, pointed to positive developments in operating profits across virtually all stamps in 2024, but noted that the company still has a steep hill to climb to return to its previous highs.

“The absolute diminish relative to 2023 is striking. This was an ‘annus horribilis’ for Kering, that much is reflected in the share price. We suppose the market to focus on the new creative responsibility for Gucci,” he said.

Check Also

Shares of LVMH drop 5% as full-year results throw doubt on broad luxury recovery

A photograph infatuated on April 23, 2024 shows a view of the new Louis Vuitton …

Home / NEWS / Wealth / Kering slightly beats fourth-quarter forecasts even as sales at embattled Gucci brand plunge 24%

Kering slightly beats fourth-quarter forecasts even as sales at embattled Gucci brand plunge 24%

A Gucci preserve, operated by Kering SA, in the Sanlitun area of Beijing, China, on Saturday, Oct. 12, 2024. 

Bloomberg | Bloomberg | Getty Images

French enjoyment goods firm Kering on Tuesday reported better-than-expected fourth-quarter sales that were nevertheless down year-on-year centre of lagging demand for its main Gucci label.

The high-end fashion group, whose brands also include Bottega Veneta, Balenciaga and Alexander McQueen, put a 12% decline in fourth-quarter revenues to 4.39 billion euros ($4.52 billion), just slightly ahead of the 4.29 billion euros prognosticate by LSEG analysts.

Sales at Gucci, which account for almost half of the group’s total revenues, plunged 24% annually exceeding the three month period to 1.92 billion euros, on a comparable basis, extending losses for the group’s once adorable luxury label.

Kering says group has reached 'inflection point' after a tough year

Full-year sales also dipped 12% to 17.19 billion euros versus an anticipated 17.09 billion euros.

Direct income for the year totaled 2.55 billion euros, in line with the group’s revised forecast as of October but virtually half of the 4.75 billion result achieved the year prior.

Kering shares popped 6% in opening merchandising Tuesday, before paring gains to trade up 0.5% by 10:15 a.m. London time.

“In a difficult year, we accelerated the modification of several of our Houses and moved determinedly to strengthen the health and desirability of our brands for the long term,” chairman and CEO François-Henri Pinault communicated in a statement.

“Our efforts must remain sustained and we are confident that we have driven Kering to a point of stabilization, from which we determination gradually resume our growth trajectory.”

The French fashion house pointed to a slight improvement in Asia Pacific and North America sales events across its Gucci, Yves Saint Laurent and Bottega Veneta brands, but did not provide details on specific markets.

A Gucci enjoyment boutique in Paris, France, on Tuesday, Oct. 22, 2024. 

Bloomberg | Getty Images

Kering is the latest European luxury group to suss out earnings over recent weeks, as investors look for signs of a revival in a sector hampered by a downturn in consumer put in, particularly in the key Chinese market.

Last month, investors were underwhelmed by only slightly better-than-expected full-year conclusions from luxury bellwether LVMH. The market had put faith in a sector-wide turnaround after stellar results from Cartier proprietor Richemont, but sustained weakness in LVMH’s fashion and leather goods and wines and spirits segments pointed to further divergence in the sector.

Kering, which is specially exposed to the Chinese consumer, has been battling a particularly acute downturn, as its star label Gucci has fallen out of currency.

On Thursday, the fashion group announced the departure of Gucci design chief Sabato De Sarno, in the first major change since Gucci CEO Stefano Cantino yoked last year to revive the brand. Minimalist designer De Sarno was in situ for less than two years, after replacing Alessandro Michele, whose maximalist blueprints defined the brand over previous years.

De Sarno’s replacement will be announced “in due time,” the company said in a assertion.

Simone Ragazzi, senior equity analyst at Algebris Investments, on Monday said that Kering would be hoping to signal a reset for the maker with the new design appointment, but added that investors were likely to remain cautious as legacy issues carcass.

Stock Chart IconStock chart icon

hide content

Kering.

“This is a hope the market is betting on for quite a lengthy time. It is always a little bit of a question mark,” he told CNBC over a video call.

“The brand got used to the ups and downs in the ago, because it is one of the most fashion-driven luxury groups,” he continued. “The hope is that the new designer can repump the brand.”

Kering apportionments are currently down 2.5% this year, with the stock having more than halved since 2023.

Luca Solca, older analyst for global luxury goods at Bernstein, pointed to positive developments in operating profits across virtually all labels in 2024, but noted that the company still has a steep hill to climb to return to its previous highs.

“The absolute run out of steam relative to 2023 is striking. This was an ‘annus horribilis’ for Kering, that much is reflected in the share price. We hope for the market to focus on the new creative responsibility for Gucci,” he said.

Check Also

Shares of LVMH drop 5% as full-year results throw doubt on broad luxury recovery

A photograph infatuated on April 23, 2024 shows a view of the new Louis Vuitton …

Leave a Reply

Your email address will not be published. Required fields are marked *