Kering reports a fall in sales, but its share price holds up well on the stock market

In a press release issued today on the publication of its annual figures, the group warned that "in an environment that remains uncertain at the start of the year, our continued investment in our Houses will weigh on our results in the short term".
It is true that the fall in sales - in 2023 the group achieved sales of 19.6 billion euros, down 4% on a reported basis - does not reassure investors, but the profitability and desirability of the brands in the portfolio remain high and the shares on the stock market have not suffered the negative impact. The luxury group's share price nonetheless rose by just over 2%, topping the 400 euro mark, despite the difficult announcements. The results also revealed a fall in net profit from €3.61 billion to €2.98 billion in the space of a year, and declining performances for most of the flagship houses: Gucci fell from €10,487 million booked in 2022 to €9,873 million in the financial year just ended.
Yves Saint Laurent has also fallen, with the brand led by Francesca Bellettini recording €3,300 million in 2022, compared with €3,179 million in 2023.
The world's second-largest luxury group after LVMH, Kering has focused on renewing its flagship Gucci brand, which accounts for more than 50% of sales and nearly 70% of operating profits.
Kering's main brands have strong control over distribution channels and a strong presence in the leather goods sector, where production cycles are generally longer, outside the whirlwind of fashion trends, and therefore represent a higher and more stable value than in the fashion sector.
In this respect, it should be noted that the brands in the Kering portfolio have a share of the luxury leather goods market of around 10% worldwide.
Kering is now obliged to face up to these new results, but the objective is to continue to rely on the renewal strategies undertaken in a multi-year programme.
Gucci should thus be able to maintain its prices and desirability over the long term, even despite the recent slowdown in demand compared to its main competitors. At the 66th Grammy Awards, the brand succeeded in reaching a large audience on social networks and boosting its desirability, thanks to singer Miley Cyrus, whose dazzling copper sequined Gucci dress did not go unnoticed.
Gucci is in the process of reinforcing the brand's identity and prestige through the loyalty of a number of celebrities, following the departure of Alessandro Michele.
On the other hand, the luxury group's 'minor' brands still have plenty of room for development and can aspire to expand geographically, benefiting from the parent company's infrastructure and resources.