PARIS (Reuters) – Kering’s sales rose just 1% in the first quarter, as its flagship brand Gucci benefited less than its rivals from the rebound in consumption in China and saw its income decline in the UNITED STATES.
The French luxury group reported on Tuesday a turnover of 5.08 billion euros between January and March.
The like-for-like increase, excluding currency effects and acquisitions, is in line with analysts’ expectations, according to the Visible Alpha consensus.
This growth is much lower than that reported by LVMH (+17%) and Hermès (+23%) during the same period. However, it follows a 7% decline in the last quarter of 2022.
“Kering’s performance in the first quarter remains mixed, as we had anticipated”, commented in a press release the CEO of Kering, François-Henri Pinault, while judging that “the gradual improvement in activity throughout of the period is encouraging”.
Gucci, which has long been the fastest-growing luxury brand and the group’s main source of revenue and profit, has struggled for several years and saw the departure of its creative director Alessandro Michele in November.
His successor, the little-known Sabato De Sarno, will take up his duties next month and will present his first collection in September in Milan, which risks penalizing the brand’s sales in the coming months.
However, Gucci for once did not cause any “nasty surprises” in the first quarter with a 1% growth in its turnover while the consensus expected it to break even, noted Luca Solca, of Bernstein.
If Yves Saint Laurent saw its sales increase by 8% during the first three months of the year, the other Kering brands suffered.
This is particularly the case for Balenciaga, whose sales fell by 9% as the brand suffered the backlash of an advertising campaign which generated strong criticism in the United States and the United Kingdom because that she portrayed children.
Kering generated 27% of its revenue in North America and 33% in Asia-Pacific.
(Written by Silvia Aloisi and Mimosa Spencer, Tangi Salaün, editing by Kate Entringer)
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