Kering Shares Slide to Near Pandemic Lows After Sales Miss Forecasts
October 25 2023 - 3:37AM
Dow Jones News
By Adria Calatayud
Shares of Gucci owner Kering slid to the lowest level since
March 2020 after the company reported third-quarter sales that
slightly missed consensus expectations as a postpandemic boom in
luxury-goods spending fizzles.
At 0806 GMT on Wednesday, shares in Kering fell 3.6% to
EUR392.80, falling to their lowest level since March 2020, at the
height of the pandemic. This took the stock's year-to-date fall to
more than 18%, against a 5.8% rise in France's CAC 40 blue-chip
index and a 1.9% gain in the pan-European Stoxx Europe 600.
The French luxury group, which also owns Yves Saint Laurent and
Bottega Veneta among other brands, reported a fall in revenue to
4.46 billion euros ($4.72 billion) for the third quarter from
EUR5.14 billion a year before. On a comparable and
constant-currency basis, Kering's revenue fell 9%.
Analysts polled by FactSet had expected sales of EUR4.52
billion.
Gucci revenue fell 7% on a comparable basis, while Yves Saint
Laurent and Bottega Veneta saw comparable sales fall 12% and 7%,
respectively, Kering said. Comparable revenue at the group's other
houses was down 15%, it said.
Kering's quarterly sales were as labored as feared, with trends
consistent with what larger peer LVMH Moet Hennessy Louis Vuitton
reported earlier this month, Jefferies analysts said in a research
note.
The company has signaled that Gucci's profit margins will take a
hit as the brand undergoes a turnaround, but the update pointed to
weakness extending beyond its star brand, the Jefferies analysts
said.
After years of strong results, many luxury-goods companies have
been grappling with weakening demand for their products as
inflation and high interest rates hurt consumer spending and
China's economic woes add to the challenges facing the
industry.
Write to Adria Calatayud at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
October 25, 2023 04:22 ET (08:22 GMT)
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