Kering: sales down 15% and Gucci fails to recover in Q3 2024

The Kering Group has just announced its figures for the third quarter of 2024 and, in line with the general trend, the results are not reassuring. Sales totalled €3.8 billion, down 15% on a reported basis and 16% on a like-for-like basis. The Group's flagship, Gucci, has not managed to recover. With sales of €1.6 billion, the company is down 25% on a like-for-like basis. All the indicators seem to be in the red for Kering. Given the general state of the international luxury goods industry and the slowdown in certain markets, analysts fear that operating profit for the 2024 financial year will be around €2.5 billion, compared with €4.7 billion the previous year. If these figures are confirmed, the Pinault family's group will suffer a fall of around 47% on this indicator.

CEO François-Henri Pinault said in a statement on Wednesday: ‘Our absolute priority is to create the conditions for a return to healthy and sustainable growth, while further strengthening our cost control and the selectivity of our investments’. But Gucci is a real thorn in the Group's side. Although it accounts for almost 50% of group sales, it is still particularly vulnerable to the vagaries of the markets, especially in Asia, where it generates around 50% of its turnover. The company, which is in the midst of a year of transition, is gradually introducing into its shops products from the first collections of Sabato De Sarno, who takes over as head of the company in January 2023.

Clearly, the turnaround at Kering's flagship is a long time coming. Although De Sarno's style has been well received by the public, Gucci's new design has not yet sufficiently permeated the brand to define a new identity. As a result, Gucci had a problem positioning itself in the face of a more international, younger and more price-conscious clientele. Yet there have been many changes within the company. The most recent was the appointment of Stefano Cantino as Chief Executive Officer at the beginning of October. He will take up his post in January 2025, succeeding Jean-François Palus.

But beyond Gucci, the decline also affects Kering's other flagship, Yves Saint Laurent, which is down 13% on sales of €670 million. The group was hoping for a positive leap for the second half of 2024 by reversing the trend in its first-half results, which, with a fall of 11%, had already failed to meet expectations. Apart from the negative points of the third quarter, Bottega Veneta's results were much more encouraging, with a 4% increase and sales of €397 million. The Group can also count on the performance of Kering Eyewear and Corporate, which posted earnings of €440 million, a considerable +32% increase.