March 20, 2024, Gucci store on Fifth Avenue in New York.
Michael M. Santiago | Michael M. Santiago Getty Images News | Getty Images
Shares in Gucci owner Kering fell on Thursday after the luxury goods group announced a sharp drop in revenue in the first half of the year and gave a weak forecast for the remaining six months of the year.
Kering shares fell 9% at the open, trading around August 2017 levels.
The luxury goods group announced late Wednesday that revenue in the first half of 2024 fell 11% compared with the same period last year. The decline came “against the backdrop of market slowdown in most regions except Japan,” the company said in a statement.
“Growth in China has slowed significantly, while trends in North America and Europe have not improved significantly,” Kering added.
Excluding the impact of foreign exchange, Japan Group’s revenue increased by 22% in the first half of this year, while overall revenue in Asia excluding Japan fell by 20%.
The luxury goods company also said it expects recurring operating profits to fall by 30% annually in the second half of 2024, citing “uncertainty affecting changes in luxury consumer demand.”
Kering noted that recurring operating profit fell 42% in the first six months of the year, adding that this was in line with guidance it issued when it reported first-quarter figures earlier this year.
Kering owns several luxury companies, including Gucci, Yves Saint Laurent and Bottega Veneta. Gucci’s first-half performance was the worst among these brands, with revenue down 18% year-on-year.
Kering is the latest in a string of luxury brands to see declines, including LVMH, the world’s largest luxury goods group Reported sales lower than expected earlier this week.
This is a developing story, please check back for updates.
