Gucci-owner Kering forecasts 30 percent drop in H2 operating income

Kering’s group revenue of 9.1 billion euros for the first half period, down 11 percent as reported and on a comparable basis. In the second quarter, revenue totaled 4.5 billion euros, also down 11 percent as reported and on a comparable basis.

Recurring operating income fell 42 percent to 1.6 billion euros and net income attributable to the group was 878 million euros.

Considering the uncertainties weighing on the evolution of demand from luxury consumers in the coming months following the slowdown recorded in the first half of 2024, Kering expects second half recurring operating income to be down by approximately 30 percent.

“In a challenging market environment, which adds pressure on our top line and profitability, we are working assiduously to create the conditions for a return to growth,” said François-Henri Pinault, Kering’s chairman and chief executive officer.

Kering reports drop in revenue across retail channels

The company said in a release that sales from Kering’s directly operated retail network fell by 12 percent on a comparable basis in the second quarter, adversely affected by lower store traffic.

The company witnessed a sequential improvement in Japan and a deceleration in Asia-Pacific compared to the first quarter.

Kering’s wholesale and other revenue fell 6 percent on a comparable basis, while Kering eyewear pursued its positive trend.

Kering posts sharp decline in Gucci and other brands’ sales

In the first half, Gucci’s revenue was 4.1 billion euros, down 20 percent as reported and down 18 percent on a comparable basis. Sales from the directly operated retail network dropped 20 percent on a comparable basis, while wholesale revenue was down 9 percent.

In the second quarter, the House’s sales were down 19 percent on a comparable basis, with a 20 percent decline in the directly operated retail network. Gucci saw a continuing marked decrease in Asia-Pacific. Gucci’s recurring operating income totaled 1 billion euros, while recurring operating margin was 24.7 percent.

Yves Saint Laurent’s revenue in the first half was 1.4 billion euros, down 9 percent as reported and down 7 percent on a comparable basis. On a comparable basis, the House’s sales from its directly operated retail network were down 6 percent, while wholesale revenue fell 25 percent. In the second quarter, sales were down 9 percent on a comparable basis, with an 8 percent decline in the directly operated retail network. Wholesale revenue was down 25 percent in the second quarter.

Bottega Veneta’s revenue of 836 million euros, unchanged as reported and up 3 percent on a comparable basis. Sales from the directly operated retail network rose by 8 percent on a comparable basis, while wholesale revenue was down 19 percent on a comparable basis.

In the second quarter, the House’s revenue was up 4 percent on a comparable basis. Sales in the directly operated retail network rose 7 percent on a comparable basis, supported by double-digit growth in Western Europe and North America and strong momentum in the Middle East. Sales in Asia-Pacific were resilient. Wholesale revenue was down 13 percent.

The Other Houses’ revenue in the first half was 1.7 billion euros, down 7 percent as reported and down 6 percent on a comparable basis. Sales from the directly operated retail network rose 1 percent on a comparable basis, while wholesale was down 21 percent. Second quarter sales were down 5 percent on a comparable basis. Wholesale revenue of Other Houses was down 16 percent.

In the first half, total revenue from the Kering Eyewear and Corporate segment was 1.1 billion euros. Kering Eyewear’s revenue totaled 914 million euros, up 5 percent as reported and up 6 percent on a comparable basis. In the second quarter, sales rose by 3 percent both on a comparable basis and as reported.