Oct 24, 2023
Comparable revenue at Gucci slid 7% in the third quarter, Kering said Tuesday. Analysts expected a drop of 6.2%. Overall, sales at the Paris-based company declined 9%, also missing estimates.
Kering’s performance has been lagging rivals as the luxury group controlled by the billionaire Pinault family navigates management and creative changes at Gucci. The brand, which generates about two-thirds of Kering’s operating profit, replaced its chief executive officer and creative director in the past year.
Last month, the Italian label unveiled the debut collection of new creative director Sabato De Sarno, whose simpler designs marked a departure from the flowing fabrics and vibrant prints of his predecessor, Alessandro Michele. De Sarno’s new creations will go on sale starting in January.
The slowdown extends beyond Gucci. Among Kering’s other labels, comparable sales at Yves Saint Laurent slid 12% last quarter, while the other houses unit — whose biggest brand is Balenciaga — fell 15%, both missing estimates. The brands had a high basis of comparison from a year ago and are reducing their exposure to wholesale distribution, Kering said.
“We’re still seeing a polarization in the performance of Balenciaga, depending on the markets,” Kering Deputy Chief Executive Officer Jean-Marc Duplaix told reporters on a call. Demand in the US, in particular, is still suffering from the fallout over an ad campaign scandal last year, he said.
Kering’s results contrast with those of rival Hermes International, which earlier Tuesday reported sales growth of about 16% in the third quarter on resilient demand for its prized handbags, topping estimates and boosting its shares.
Kering shares have declined 14% this year, lagging behind its biggest competitors.