Listen to the audio version of the article
«Kering’s performance deteriorated significantly in the first quarter. Although we anticipated a difficult start to the year, stagnant market conditions, particularly in China, and the strategic repositioning of some of our houses, starting with Gucci, have exacerbated downward pressure on our revenues.” François-Henri Pinault, president and CEO of the French luxury group, does not mince words and photographs the reality of a first quarter of 2024 which ended with revenues down 11% (-10% at constant exchange rates) to 4.504 billion euros . «In light of this decline in revenues – continues Pinault -, together with our firm determination to continue to invest selectively in the long-term attractiveness and distinctive character of our brands, we now expect to achieve a significantly declining operating profit in the first half of this year. All of us are working tirelessly to help Kering address current challenges and rebuild a solid platform for lasting growth.”
First quarter down
Kering’s revenue for the first quarter of 2024 fell 11% as reported and 10% on a comparable basis to 4.5 billion euros. The revenue decline includes a negative 3% currency effect and a 2% positive scope effect from the Creed consolidation.
Directly operated retail network revenue fell 11% on a like-for-like basis, due to lower store traffic. Trends in Western Europe, North America and Japan were in line with those of the fourth quarter of 2023, while a steeper decline was recorded in Asia-Pacific. Furthermore, Kering points out that revenues in the wholesale segment decreased by 7% on a comparable basis, as the group “continues to strengthen the exclusivity of the distribution of its homes”.
Gucci
In the first quarter of 2024, Gucci’s revenues were €2.1 billion, down 21% (-18% on a comparable basis). Directly operated retail network revenue fell 19% on a comparable basis in the first quarter and was particularly impacted by a sharp decline in the Asia-Pacific region. «The new Gucci collections, gradually available in stores starting from mid-February, have been very well received, particularly in the ready-to-wear and shoe categories». On a comparable basis, wholesale revenues decreased by 7%.
Yves Saint Laurent
Yves Saint Laurent’s revenues in the first quarter of 2024 amounted to 740 million euros, down 8% (-6% on a comparable basis). Revenues from the directly operated retail network were “resilient” (down 4% on a comparable basis) thanks to strong growth in Japan, sequential improvement in North America and relatively stable revenues in Western Europe. In the Asia-Pacific region, activity levels were affected by difficult market conditions. On a comparable basis, wholesale revenue fell 25%. Royalties and other revenues increased 27% on a comparable basis, with dynamic performances in the eyewear, fragrance and cosmetics sectors.