The fight remains uphill for Gucci. After losing 21% of revenue in the first quarter, the brand’s sales fell 20% in the April-June period. The half-year balance: –20%. Analysts expected better. Parent company Kering is following the same path, which was further confirmed in the second quarter (and 6 months), after the -11% of Q1. Margins collapsed, and operating profit fell 42%. Bottega Veneta is the one that managed to save itself.
Kering’s half-year
Kering’s revenue amounted to 9 billion euro in the first half of 2024, down 11% both at current exchange rates and on a comparable basis. According to Visible Alpha’s consensus cited by Reuters, analysts were expecting -9%. The French luxury conglomerate reports that direct-operated retail sales fell 12% on a comparable basis due to lower store traffic during the second-quarter. Recurring operating profit fell 42% to €1.6 billion, in line with Kering’s guidance three months ago, during the last six-months. Net income attributable to the group was 878 million euro, compared to 1.78 billion for the same period in 2023. Kering justified itself by saying that while maintaining tight control over operating expenses, it invested to “promote the desirability of its brands”.
Gucci down, Bottega Veneta holds on
In the first half of 2024, Gucci’s sales reached €4.1 billion: -20% at current exchange rates and -18% on a comparable basis. In the second quarter sales decreased by 19% on a comparable basis (analysts expected -16%) due to the “continuous and marked decline in Asia-Pacific“. Saint Laurent ended the first 6 months with a 9% decrease in revenue (-7% on a comparable basis). Sales also fell 9% on a comparable basis in the second quarter, compared to -6% in the first quarter. Bottega Veneta held, as revenue for the period was in line with that of Q1 2023 (+3% on a comparable basis). At comparable exchange rates, the second quarter was better than the first: +4% vs. +2%.
We are working assiduously
“In a difficult market environment that puts pressure on our top line and profitability, we are continuously working to create the conditions to return to growth”, said François-Henri Pinault, CEO of Kering. “Our brands continue to make investments to enrich the offer, intensify the impact of communication and strengthen the exclusivity of distribution”.
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