Kering reported a bigger-than-expected decline in first-quarter revenue today, the latest set of disappointing results from the luxury group as its star label Gucci continues to struggle amid a worsening economic environment.
Group revenue in the first three months of the year amounted to 3.88 billion euros, an organic year-on-year decline of 14%, the Paris-based group said. A Visible Alpha consensus of analysts cited by HSBC had forecast a 9.7% drop.
“We are increasing our vigilance to weather the macroeconomic headwinds our industry faces,” Chairman and CEO Francois-Henri Pinault said in a statement.
Sales at Italian fashion house Gucci, which accounts for about half of total group revenue, were down 25%, below analyst expectations of a 19% decline.
Kering’s results were the latest signs the luxury sector could be headed for another tough year following US President Donald Trump’s recent tariff announcements, which sparked fears of a recession, while sales in China, another crucial luxury market, remain weak.
Kering has closed 25 stores so far this year, finance chief Armele Poulou told journalists on a call, adding that the company was determined to further streamline its operations and shed underperforming boutiques.
Trends in Asia, where sales were down by 25%, were in line with those of the last quarter, while Western Europe and North America, both down 13%, saw a sequential deceleration, Kering said.
The group, which also owns fashion brands Yves Saint Laurent, Bottega Veneta and Balenciaga, has been facing pressure from financial markets after a string of profit warnings last year as it tries to revive its core Gucci brand. Its shares have lost over 60% of their value since the first warning in March 2024.
