Kering's Warning: Gucci's Challenges Amid Faltering Sales

Kering, the French luxury goods group, anticipates a steep decline in its full-year operating income following a significant drop in third-quarter sales. The decline, driven by reduced demand in China, greatly affects its flagship brand, Gucci, and other brands under its umbrella.

French luxury giant Kering has issued a cautious forecast, anticipating its full-year operating income to nearly halve. This warning follows an unexpected and substantial dip in third-quarter sales, reflecting the compounding challenges faced by its flagship brand, Gucci, amid weak consumer demand in China.

The group's revenue for the period under review stood at €3.79 billion, equivalent to $4.08 billion, marking a striking 16% drop on an organic basis. This figure fell short of analysts' expectations, who had projected a more modest 11% decline, as noted by Barclays.

Kering's diverse portfolio includes high-end fashion brands such as Saint Laurent, Balenciaga, and Bottega Veneta, but it is Gucci that is bearing the brunt of the downturn, posing significant concerns for the group's financial outlook.

(With inputs from agencies.)