Kering Group Revenues Fall 6% in Q4 2023, CEO Flags Further Losses


PARIS — Kering posted better-than-expected sales in the fourth quarter as revenues grew in Asia-Pacific and Japan, but it warned that its ongoing investments in turning around its key brands would continue to weigh on results in 2024.

The French luxury group said revenues in the three months to Dec. 31 fell 6 percent at reported exchange rates to 4.97 billion euros, representing a decline of 4 percent in comparable terms, with the company also noting an improvement of trends in Western Europe and North America. 

The figures beat a consensus of analyst estimates, which had called for an 8 percent fall in reported sales to 4.88 billion euros, and came amid a wider luxury slowdown and geopolitical uncertainty.

Kering said that in the context of slowing luxury spending, it expects full-year recurring operating income to decline in 2024 as well, particularly in the first half of the year. 

While Kering continues to lag sector peers, the results marked an improvement from the third quarter, when group revenue fell 13 percent at reported exchange rates and 9 percent on an underlying basis.

Organic sales at Kering’s star brand Gucci were down 4 percent in the fourth quarter, on the lower end of market forecasts, a performance that does not reflect sales of its new creative director Sabato de Sarno’s debut collection, presented in September and arriving in stores for spring 2024. 

François-Henri Pinault, chairman and chief executive officer of Kering, said the group was “focused on revitalizing Gucci” and revving up its nascent beauty division following last year’s acquisition of niche fragrance brand Creed. 

“In a market environment that remains uncertain in early 2024, our continuing investments in our houses will put pressure on our results in the short term,” he said in a statement.

“Thanks to the experience gained across the group through a decade of outstanding expansion, we are confident in achieving our long-term ambitions,” Pinault added.

For the full year, recurring net profit fell 18 percent to 3.06 billion euros, while recurring operating profit was down 15 percent to 4.75 billion euros. Gucci accounted for 68 percent of the group’s operating profit in 2023.

The recurring operating margin fell to 24.3 percent in 2023 from 27.5 percent the previous year. 

Most of Kering’s luxury divisions saw organic sales declines in the fourth quarter.

Saint Laurent was down 5 percent, dragged down by sales declines in North America and Western Europe; Bottega Veneta lost 4 percent, despite “encouraging signs” in Asia-Pacific; and the “other houses” group, which includes Balenciaga and Alexander McQueen, reported a 5 percent decline. 

The Kering eyewear and corporate division bucked the trend with a 7 percent increase in comparable sales. “Creed’s high level of profitability offset start-up costs at Kering Beauté,” the group reported.

By comparison, sector leader LVMH Moët Hennessy Louis Vuitton reported a 9 percent jump in organic sales in its key fashion and leather goods division in the fourth quarter. The results sent its shares soaring, boosting the luxury conglomerate’s market capitalization by more than 40 billion euros in a single day.

Hermès International is due to report fourth-quarter results on Friday.



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