Kering reports a -10% decrease in first-quarter 2024 sales

François-Henri Pinault, CEO of the luxury group, was probably not surprised by the results announced on Tuesday: “Kering's performance deteriorated strongly in the first quarter. While we had anticipated a challenging beginning of the year, market conditions, particularly in China, and the strategic repositioning of some of our brands, starting with Gucci, increased the pressure on our sales.”

This is how the Group's CEO commented on the fall in Kering's sales in the first quarter of 2024. The results just posted highlight the difficulties experienced by the luxury giant over the last few months, mainly generated by the poor performance of Gucci, which accounts for most of the Group's revenues.

While Kering's overall sales reached 4.5 billion euros (-11% on a reported basis and -10% on a comparable basis), Gucci suffered even more, ending the first quarter with 2.1 billion euros in sales (-21% on a reported basis and -18% on a comparable basis). Despite the positive reception of the new collection presented by artistic director Sabato Di Sarno, Kering's iconic house was penalized above all by the decline in sales in Asia. The Italian brand is still reorganizing and rebuilding its identity, now more focused on “quiet luxury”, following the departure of designer Alessandro Michele.

Yves Saint Laurent also posted mixed results in the first quarter of 2024: sales amounted to 740 million euros, down -8% on a reported basis and -6% on a comparable basis. Bottega Veneta, on the other hand, reported sales of 388 million euros (-2% on a reported basis and +2% on a comparable basis), revealing a relative stability, thanks to the brand's good reception in the American and European markets.

For the other brands, results reached 824 million euros (-7% on a reported basis and -6% on a comparable basis). Balenciaga is slowly emerging from the crisis: European and Japanese consumers seem to be progressively reconnecting with the brand, penalized by poor media exposure and declining sales. On the other hand, the jewelry sector (in particular Boucheron) is doing quite well, as is “Kering Eyewear”, which posted sales of 463 million euros, up 8% on a comparable basis.

The luxury group is continuing its strategy of massive investment and restructuring, which will affect financial results throughout the year and particularly in the first half. In fact, Kering anticipates a decline in sales for the first six months of 2024 of around -40 to -45% compared to the same period last year, assuming the desire to continue the planned expenditure to stabilize the long-term growth of the brands in its portfolio.

The global slowdown in the luxury goods market and Kering's planned investment strategy will therefore not allow the Group to post remarkable financial performances for several more months.