Kering CEO predicts 'stabilisation' despite 12% sales decline

Kering posted a 12% decline in fourth quarter sales to €4.39 billion (£3.76 billion), with flagship label Gucci hit hardest.

Sales at the family-founded Italian house fell 24%, higher than the predicted 19%.

Like many luxury brands, Gucci's sales have been hit by the luxury slowdown, dampened particularly by weak demand in China.

Gucci recently parted ways with its Creative Director Sabato de Sarno, after his shake-up of former creative lead Alessandro Michele's maximalist designs failed to turn things around at the label.

Gucci’s recurring operating income totalled €1.6 billion (£1.3 billion) in 2024. Recurring operating margin was 21%, with lower sales resulting in negative operational leverage, although Kering said that was mitigated by major efforts to streamline the cost base.

At Yves Saint Laurent, sales were also down. The French luxury brand's total revenue was down 9% to €2.9 billion (£2.4 billion). Sales in the fourth quarter were down 8%.

Revenue at Bottega Veneta was up 4% to €1.7 billion (£1.4 billion) with fourth quarter sales up 12%. Creative Director Matthieu Blazy exited the top creative post in December for Chanel, being replaced by Carven's Louise Trotter.

From Kering's other houses, which include Balenciaga, Alexander McQueen and Brioni, sales amounted to €3.2 billion (£2.7 billion) for the year, down 8% from the year prior.

Overall revenue for the group landed at €17.19 million (£14.33 billion).

François-Henri Pinault, Chairman and Chief Executive Officer at Kering, said: "In a difficult year, we accelerated the transformation of several of our Houses and moved determinedly to strengthen the health and desirability of our brands for the long term.

"Across the group, and at Gucci first and foremost, we made critical decisions to raise the impact of our communications, sharpen our product strategies, and heighten the quality of our distribution, all in the respect of the creative heritage that distinguishes our brands.

"We secured our organisation, made key hirings, sped up execution, and intensified the efficiency of our operations. Our efforts must remain sustained and we are confident that we have driven Kering to a point of stabilisation, from which we will gradually resume our growth trajectory."