French luxury house Kering's Q3 24 revenue drops 15% YoY to $4.09 bn

The overall sales of Kering from the directly operated retail network were down 17 per cent YoY on a comparable basis, adversely affected by lower store traffic. Wholesale and other revenue was down 12 per cent YoY on a comparable basis. In the first nine months of the year, the Group generated revenue of €12.8 billion, down 12 per cent both as reported and on a comparable basis.

Quarterly performance by brand

In the third quarter, Gucci revenue amounted to €1.6 billion (~$1.7 billion), down 26 per cent as reported and down 25 per cent YoY on a comparable basis. Sales from the directly operated retail network were down 25 per cent YoY on a comparable basis. The brand was impacted by market conditions, especially in Asia-Pacific. The brand’s wholesale revenue was down 38 per cent YoY on a comparable basis, reflecting Gucci’s strategic streamlining of this distribution channel, along with difficult market conditions, stated a press release by Kering.

Yves Saint Laurent’s third-quarter revenue was €670 million (~$722 million), down 13 per cent YoY as reported and down 12 per cent on a comparable basis. Sales from the directly operated retail network were down 12 per cent YoY on a comparable basis. The brand’s wholesale revenue fell 20 per cent YoY on a comparable basis.

Bottega Veneta’s revenue totalled €397 million (~$428 million) in the third quarter, up 4 per cent YoY as reported and up 5 per cent on a comparable basis. Revenue growth in the House’s directly operated retail network was particularly solid, up 9 per cent YoY on a comparable basis, driven by double-digit growth in North America and Western Europe. The brand’s wholesale revenue was down 10 per cent YoY on a comparable basis.

The revenue from other Houses of Kering Group totalled €686 million (~$740 million) in Q3, down 15 per cent YoY as reported and down 14 per cent on a comparable basis. Sales from the directly operated retail network were down 10 per cent on a comparable basis in complex market conditions.

Balenciaga’s leather goods lines posted very good performances. Alexander McQueen has been gradually rolling out its collections in stores since July and its second show under the House’s new identity received a very enthusiastic reception. Brioni pursued its growth.  Wholesale revenue of the other Houses was down 28 per cent YoY on a comparable basis, added the press release.

François-Henri Pinault, chairman and chief executive officer (CEO) said, “With discipline and determination, we are executing a far-reaching transformation of the Group, and at Gucci in particular, at a time when the whole luxury sector faces unfavourable market conditions. This severely impacts our performances in the short term. Our absolute priority is to build the conditions for a return to sound, sustainable growth, while further tightening control over our costs and the selectivity of our investments. We have the right strategy, organization, and talents to achieve these goals.”

Considering the major uncertainties likely to weigh on demand among luxury consumers in the coming months and following the larger-than-expected slowdown in the third quarter of the year, Kering’s recurring operating income in 2024 could total approximately €2.5 billion (~2.7 billion). The Group prioritises expenses and initiatives supporting the long-term development and growth of its Houses, and works with determination on optimising its cost base, the efficiency of its organisation, and the return on its investments.

Fibre2Fashion News Desk (SG)