Kering Expects Revenue Drop on Lower Gucci Sales — Update

By Nina Kienle

Gucci owner Kering said it expects a decline in revenue for its first quarter, following the company's profit warning as sales continue to slow.

The French luxury giant said Tuesday that it expects a revenue decline of about 10% from last year's first quarter, when group revenue was 5.01 billion euros ($5.45 billion), due to a steep sales drop at Gucci in the Asia-Pacific region.

First-quarter revenue for Gucci is expected to decline by nearly 20% year on year. Gucci's revenue amounted to EUR2.62 billion in the first quarter of 2023.

First-quarter revenue is expected to be published on April 23, after the market closes. The figure will include the positive contribution of the consolidation of Creed on full quarter basis, as well as a negative foreign exchange impact, which combined should hit revenue by around 1% to 2%.

The company had previously issued a profit warning, expecting results to take a hit in 2024 from planned investments in its fashion houses as it looks to reinvigorate its core brand.

After the height of the pandemic, shoppers splurged on high-end handbags, jewelry and garments fueling strong results but sales growth slowed last year on high inflation and rising interest rates.

Early products, primarily from the Ancora collection, have been on offer in selected Gucci stores since mid February, Kering said.

Write to Nina Kienle at nina.kienle@wsj.com

(END) Dow Jones Newswires

March 19, 2024 14:14 ET (18:14 GMT)

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