As expected, the French luxury goods provider Kering SA closed the 2023 financial year with meager figures.
The parent company of the fashion houses Gucci, Yves Saint Laurent and Bottega Veneta reported losses in sales and earnings on Thursday. For now, hopes continue to lie in a revitalization of what is by far the most important brand, Gucci, under the creative direction of chief designer Sabato De Sarno, who was appointed at the beginning of 2023 and presented his first collection for the fashion house in September.
Group sales fell by four percent
Last year, Kering’s consolidated sales amounted to almost 19.6 billion euros. This corresponded to a decline of four percent compared to 2022. On a comparable basis – i.e. adjusted for currency effects and changes in the group portfolio – revenue fell by two percent.
In the fourth quarter, sales fell by six percent to 4.97 billion euros. On a like-for-like basis it fell by four percent. Revenues in the Asia-Pacific region have increased and developments in Europe and North America have gradually improved, the company explained. The downward trend of the previous quarter, in which sales fell by 13 percent, was at least noticeably slowed down.
The hoped-for upswing at Gucci has so far failed to materialize
All important Group brands suffered losses throughout the entire financial year. Gucci’s sales were 9.87 billion euros, six percent (-2 percent adjusted for currency effects) below the previous year’s level. Sales at Yves Saint Laurent fell by four percent (-1 percent in constant currency) to 3.18 billion euros, while at Bottega Veneta they fell by five percent (-2 percent in constant currency) to 1.64 billion euros.
The group’s other labels, including Balenciaga, Alexander McQueen and Brioni, together achieved annual sales of 3.51 billion euros, missing the previous year’s level by nine percent (-8 percent adjusted for currency effects). On the other hand, the Kering Eyewear eyewear division was able to increase, not least benefiting from the takeover of the Maui Jim brand. Their sales rose by 35 percent to 1.5 billion euros. On a comparable basis, it achieved an increase of ten percent.
Management expects a further decline in profits for 2024
In addition to the decline in sales, a lower gross margin impacted the result. The operating profit adjusted for special effects fell by 15 percent to 4.75 billion euros compared to the previous year. The net profit attributable to shareholders shrank by 17 percent to 2.98 billion euros.
Management expects a further decline in earnings for 2024. Due to expenses as part of the ongoing investment strategy, operating profit adjusted for special items is expected to miss the previous year’s level, the company said.