Kering Faces Decline: Struggles with Gucci and Luxury Market Slowdown

Kering reported a bigger-than-expected drop in second-quarter sales and forecasts weakness in the second half of the year. The French luxury group, which owns Gucci, Boucheron, and Balenciaga, saw sales drop to 4.5 billion euros, an 11% organic decline. Analyst expectations had predicted a 9% drop.

Kering has reported a more significant-than-expected decline in its second-quarter sales, signaling a challenging outlook for the latter half of the year. The French luxury conglomerate, which owns iconic brands like Gucci, Boucheron, and Balenciaga, revealed a drop to 4.5 billion euros in sales, marking an 11% decrease on an organic basis—excluding currency effects and acquisitions.

The figure fell short of analyst projections, which anticipated a 9% drop, as per the Visible Alpha consensus. Adding to the concern, the company forecasted that its second-half operating income could decrease by approximately 30%, following a substantial 42% drop in the first half of the year. Notably, the euro was valued at $1 = 0.9215 euros during this period.

(With inputs from agencies.)