Dive Brief:
- Kering consolidated revenue for Q1 is expected to drop approximately 10% year over year, according to a statement released by the company Tuesday.
- That figure is primarily driven by poor performance at Gucci, Kering’s largest brand. Comparable Q1 revenue for the brand is expected to fall by nearly 20% year on year, “notably in the Asia-Pacific region,” per the company.
- The forecast comes just over a month after Kering reported 8% declines at all of its luxury fashion houses for Q4, and a fiscal 2023 revenue drop of 4% to 19.6 billion euros, or approximately $21.3 billion at current exchange rates.
Dive Insight:
Kering's unexpected earnings update reflects the current volatility in the luxury sector, with some companies experiencing record-setting earnings while others are announcing declines.
The projection from Kering doesn't come as a surprise. When Kering released its fiscal 2023 earnings report, it predicted a decline in 2024 compared to 2023, particularly in the first half of the year.
In its Tuesday statement, Kering confirmed that outlook, and said it expected the first half of 2024 to be “challenging.” However, the company also expressed optimism about its spring-summer 2024 Gucci collection, which is Sabato de Sarno’s first release since becoming the brand’s creative director in 2023.
“Early products, primarily ready-to-wear, from the Ancora collection have been on offer in selected Gucci stores since mid-February,” said the company. “The new collection, whose availability will gradually be ramped up over the coming months, is meeting with highly favorable reception.”
Kering saw significant changes in 2023 in addition to hiring de Sarno. In July, the company acquired a 30% stake in Valentino and saw executive changes including the appointment of Armelle Poulou as CFO and the departure of Gucci president and CEO Marco Bizzarri.
Kering plans to release its first quarter 2024 earnings on April 23.
