Luxury group Kering has released better-than-expected sales figures for its fourth quarter, driven by improved performance from brands other than Gucci. Despite the struggles of its star brand, which saw a 24% drop in organic revenue, Kering’s overall sales fell 12% to €4.39 billion.
Kering’s CEO François-Henri Pinault believes the company has reached a point of “stabilization” after a year of heavy losses and profit warnings. The results beat analyst estimates, which had forecasted a 15% drop in reported sales.
Gucci, however, was a disappointment, with its organic revenue declining by 24%. The brand’s struggles are ongoing, following the exit of creative director Sabato de Sarno last week. No replacement has been named yet.
The company’s full-year performance was also underwhelming, with recurring operating profit down 46% to €2.55 billion and a recurring operating margin of 14.9%. Gucci accounted for 63% of this profit, highlighting the challenges facing the brand.
Other Kering divisions saw organic sales weaken in the fourth quarter, except for Bottega Veneta, which rose by 12%, and its eyewear division, which increased by 10%.
The focus now shifts to Gucci’s new strategy under CEO Stefano Cantino. Analysts are expecting clear communication from the new management team and insight into their turnaround plan to restore investor confidence.
Kering has struggled to compete with industry peers, such as LVMH Moët Hennessy Louis Vuitton, which reported a 1% year-over-year decline in its key fashion division in the fourth quarter.
Source: https://wwd.com/business-news/financial/kering-group-q4-2024-revenue-ceo-francois-henri-pinault-outlook-1236922983