The French luxury goods group Kering SA received a sensitive setback at the end of the 2022 financial year. In the fourth quarter, sales fell short of the previous year’s level.
A key reason was the ongoing weakness of main brand Gucci, whose longtime chief designer Alessandro Michele was forced to leave in November. He has since been replaced by Sabato De Sarno.
The Balenciaga label also made negative headlines when it had to pull back an unsuccessful advertising campaign in November after heavy criticism. The fashion house had a “difficult month in December”, the parent company admitted in its annual report published on Wednesday. Overall, 2022 was an “excellent” year for Balenciaga.
Gucci suffered a significant drop in sales in the final quarter
In view of the many problems, Kering had to accept a decline in sales in the final quarter: In the months of October to December, the group’s revenues amounted to 5.28 billion euros, two percent below the level of the same period last year. On a comparable basis – i.e. adjusted for currency effects and changes in the portfolio – sales fell by seven percent.
Sales of by far the most important brand, Gucci, totaled 2.73 billion euros, down 11 percent (-14 percent at constant currency) compared to the same quarter last year. On the other hand, the labels Yves Saint Laurent and Bottega Veneta were able to grow. Yves Saint Laurent sales grew by ten percent (currency-adjusted +4 percent) to 903 million euros, Bottega Veneta increased by eight percent (currency-adjusted +6 percent) to 469 million euros.
Revenues from the Group’s other brands, including Balenciaga, totaled EUR 924 million, down three percent on the previous year (-4 percent on a comparable basis). The remaining segments with the Kering Eyewear division achieved an increase of 79 percent to 295 million euros. On a comparable basis, sales in this area increased by 28 percent.
In the entire 2022 financial year, group sales will increase by 15 percent
Despite the weak final quarter, Kering was able to grow strongly throughout the 2022 financial year. Group sales amounted to almost EUR 20.4 billion, exceeding the previous year’s level by 15 percent. On a comparable basis, the rate of increase was nine percent.
Gucci achieved comparatively low growth (+8 percent, currency-adjusted +1 percent) to 10.5 billion euros, while all other divisions were able to post significant sales improvements.
Despite lower margins, earnings also increased by double digits compared to 2021: Operating profit adjusted for special effects grew by eleven percent to EUR 5.59 billion, and net income attributable to shareholders amounted to EUR 3.61 billion, an increase of 14 percent .