Kering (EPA:PRTP) (PPRUY) ADRs fell more than 2% Tuesday after the luxury goods company reported its first quarter revenue numbers, revealing a decline year-on-year.
Kering's revenue on a reported basis fell 11%, while on a comparable basis it declined by 10%, compared to the Bloomberg consensus of a 10.2% slide. The decline was put down to an adverse macro back, weak traffic weighing on retail, wholesale declining and FX headwinds.
The company's revenue decline was impacted by revenue for its Gucci brand, which declined by 18% on a comparable basis. However, this was better than the Bloomberg consensus of a 19.4% decline.
Yves Saint Laurent's revenue fell 6% year-on-year, while Bottega Veneta's revenue increased by 2%. Other Houses revenue on a comparable basis fell 6%, while Eyewear & corporate revenue on a comparable basis increased 9%.
Revenue came in at EUR4.50 billion, down 11% year-on-year, missing the consensus estimate of EUR4.47 billion.
"Kering's performance worsened considerably in the first quarter," said Kering CEO François-Henri Pinault. "While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline."
As a result, the company now expects to deliver a "sharply lower operating profit in the first half of this year."
The Gucci parent company now expects a 40% to 45% decline in recurring operating income in the first half of 2024 compared to the first half of 2023.