Kering: Holiday quarter revenues slide 6 percent

Luxury conglomerate Kering’s 2023 revenue amounted to 19.6 billion euros in 2023, a decrease of 4 percent as reported and and down 2 percent on a comparable basis.

In the fourth quarter, revenue was down 6 percent as reported and down 4 percent on a comparable basis.

“In a trying year for the group, we strengthened our organisation and took significant steps to further enhance the visibility and exclusivity of our Houses. We are focused on revitalising Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterises this iconic House,” said François-Henri Pinault, chairman and chief executive officer of Kering in a statement.

Adding further, Pinault said: “In a market environment that remains uncertain in early 2024, our continuing investments in our Houses will put pressure on our results in the short term.”

Review of Kering’s Q4 and full year performance

Fourth quarter sales from the directly operated retail network dropped 2 percent on a comparable basis. Revenue grew in Asia-Pacific and Japan. Trends in Western Europe and North America improved sequentially.

The company’s 2023 sales from the directly operated retail network, including e-commerce, were stable on a comparable basis. Wholesale and other revenue fell 11 percent on a comparable basis.

2023 recurring operating income totaled 4.7 billion euros in 2023, down 15 percent from the 2022 level, while recurring operating margin was 24.3 percent in 2023 versus 27.5 percent in 2022. Net income attributable to the group amounted to 3 billion euros.

Kering posts 6 percent drop in Gucci revenues

Gucci’s 2023 revenue was 9.9 billion euros, down 6 percent as reported and down 2 percent on a comparable basis.Sales from the directly operated retail network, which account for 91 percent of revenue, dropped 2 percent on a comparable basis and wholesale revenue was down 5 percent on a comparable basis.

In the fourth quarter, Gucci’s revenue decreased 4 percent on a comparable basis. Sales from the directly operated retail network were down 4 percent on a comparable basis, with sequential improvements in North America and Asia-Pacific, as well as in leather goods and women’s ready-to-wear. Towards the end of the quarter, Gucci reopened its store on Monte Napoleone in Milan. Wholesale revenue was up 3 percent on a comparable basis in the quarter.

Gucci's recurring operating income totaled 3.3 billion euros in 2023 and the recurring operating margin was 33.1 percent.

In 2023, Yves Saint Laurent’s revenue amounted to 3.2 billion euros, down 4 percent as reported and down 1 percent on a comparable basis. Sales from the directly operated retail network rose by 4 percent on a comparable basis, while revenue from wholesale was down 26 percent on a comparable basis.

In the fourth quarter, sales were down 5 percent on a comparable basis, while revenue from the directly operated retail network was stable. Yves Saint Laurent performed well in Asia-Pacific and Japan, while sales in North America and Western Europe declined year-on-year, with trends improving sequentially. The House opened its largest store worldwide in the fourth quarter, on the Champs-Elysées in Paris. Wholesale revenue was down 39 percent in the fourth quarter.

Bottega Veneta's revenue totaled 1.6 billion euros in 2023, down 5 percent as reported and down 2 percent on a comparable basis. Sales from the directly operated retail network rose by 4 percent on a comparable basis, while wholesale revenue fell by 24 percent on a comparable basis.

Sales in the fourth quarter were down 4 percent on a comparable basis, and up 5 percent in the directly operated retail network, driven by Bottega Veneta’s positive performance in North America and encouraging signs in Asia-Pacific, particularly Mainland China. Wholesale revenue was down 37 percent on a comparable basis.

2023 revenue from Other Houses amounted to 3.5 billion euros, down 9 percent as reported and down 8 percent on a comparable basis. On a comparable basis, sales from the directly operated retail network rose by 3 percent, while wholesale revenue was down 29 percent.

In the fourth quarter of 2023, sales from the Other Houses dropped 5 percent on a comparable basis, while sales from the directly operated retail network were up 4 percent. Wholesale revenue was down 30 percent.

In 2023, Kering Eyewear’s revenue reached 1.5 billion euros, up 35 percent as reported and up 10 percent on a comparable basis. In the fourth quarter, sales were up 6 percent on a comparable basis.

Kering expects to report further drop in H1 profit in 2024

In 2024, in a context of ongoing normalisation of the sector’s growth, the company expects the impact of Kering’s investment strategy to weigh on the group’s full-year recurring operating income. The company expects to post a decline compared to the level reported in 2023, particularly in the first half of the year.

In its February 7, 2024 meeting, Kering’s board proposed a cash dividend of 14 euros per share. An interim dividend of 4.50 euros per share was paid on January 17, 2024. If approved, a final dividend of 9.50 euros will be paid on May 6, 2024.