French luxury group Kering has reported revenue of €9.0bn in the first half (H1) of FY24 (FY24) – an 11% decline in both reported and comparable basis from the previous year.
The luxury group, which includes the Gucci brand, recorded net income attributable to the group of €878m during the period.
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The company’s recurring operating income for H1 FY24 aligns with previous forecasts, dropping by 42% to €1.6bn ($1.7bn).
In the second quarter (Q2) of the fiscal year, Kering’s revenue decreased by 11% to €4.5bn, influenced by a negative currency effect and a positive scope effect from Creed’s consolidation.
The directly operated retail network’s sales dropped by 12%, with a notable impact from reduced store traffic.
Wholesale and other revenues saw a 6% decrease in Q2 FY24, as Kering focused on enhancing the exclusivity of its distribution.
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By GlobalDataRevenue of Gucci also fell to €4.1bn in H1 FY24, marking a 20% decrease on a reported basis and an 18% fall on a comparable basis against the same period in FY23.
Gucci’s directly operated retail network experienced a 20% decline, while wholesale revenue decreased by 9%.
Despite these challenges, the brand maintained a recurring operating margin of 24.7%, reflecting its strategic long-term investments.
Gucci’s Q2 FY24 sales plummeted by 19%, with a 20% decline in the directly operated retail network.
Yves Saint Laurent, another Kering brand, reported a 9% sales drop on a reported basis in H1 FY24 and 9% on a comparable basis in Q2 FY24.
With the luxury consumer market’s uncertain future, Kering anticipates a possible 30% reduction in recurring operating income in the second half of FY24 compared to the same period in 2023.
Kering chairman and CEO François-Henri Pinault said: “In a challenging market environment, which adds pressure on our top line and profitability, we are working assiduously to create the conditions for a return to growth.
“Our houses pursue their investments to enrich their offer, intensify the impact of their communications, and re-inforce the exclusivity of their distribution. We make certain that every one of these investments creates value for the long term. While the current context might impact the pace of our execution, our determination and confidence are stronger than ever.”
In fiscal 2023, Kering reported that net income attributable to the group fell by 17% to €2.98bn.
