KER Kering

   By Mauro Orru 
 

Kering posted sales below analysts' expectations for the third quarter, becoming the latest fashion group to reel from a slowdown in the luxury-goods industry as the postpandemic boom fades.

The owner of Gucci and Yves Saint Laurent on Tuesday reported revenue of 4.46 billion euros ($4.76 billion) in the three months to the end of September, down 13% in reported terms and 9% on a comparable scope and exchange-rate basis. Analysts had forecast sales of EUR4.52 billion, according to FactSet.

After years of strong results fueled by a surge in demand for luxury goods, the industry is grappling with slowing sales globally as customers reckon with inflation and high interest rates. China's economic woes added to the wider slowdown. The country was the world's largest luxury market before the pandemic. However, China's economy has been suffering from a prolonged downturn in the property sector as well as weak exports and consumer demand.

Gucci sales slipped 7% on a comparable scope and exchange rate basis to EUR2.22 billion. Yves Saint Laurent recorded a 12% contraction to EUR768 million, while Bottega Veneta sales fell 7% to EUR381 million. Sales in Kering's other houses, including Balenciaga and Alexander McQueen, dropped 15% to EUR805 million.

Analysts polled by FactSet had projected sales of EUR2.22 billion at Gucci, EUR799.5 million at Yves Saint Laurent, EUR390 million at Bottega Veneta and EUR822.5 million at other houses.

"Beyond the challenging macroeconomic conditions and softening demand across the luxury industry, the change in our revenue performance in the third quarter reflects the impact of our decisions to further elevate our brands and their distribution," said Chief Executive Francois-Henri Pinault.

Earlier this year, Gucci appointed Sabato De Sarno as its new creative director, seeking to reinvigorate the Italian brand and, in July, Kering announced the departure of Gucci's CEO Marco Bizzarri as part of a broader management shuffle, with Jean-Francois Palusstepping in on an interim basis.

During the quarter, De Sarno unveiled his debut collection for Gucci, which still accounts for the lion's share of Kering's sales.

"The organization we put in place in July will enable us to strengthen the steering of our houses in the current market environment and to reclaim our positions and influence," Pinault said.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

October 24, 2023 12:04 ET (16:04 GMT)

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