Sales at Kering’s star Gucci fashion brand fell more than expected in the fourth quarter as the Covid-19 pandemic kept consumers from travelling abroad and shopping.
Gucci drives the bulk of revenues and profits at the French conglomerate, and has been one of the industry’s top performers in recent years.
But it has struggled more than some peers in the Covid-19 crisis, despite a rebound in luxury goods demand in regions like Asia which fuelled resurgent sales at rivals such as LVMH’s Louis Vuitton.
Kering, which also owns brands such as Saint Laurent, said revenue for the whole group fell 8.2 per cent to $4.83 billion for the October to December period, down 5 per cent on a comparable basis and missing a UBC consensus forecast for growth of nearly 1 per cent.
Gucci’s sales were down 10.3 per cent in the quarter on a comparable basis, when analysts had expected a 4 per cent drop.
Kering’s financial chief, Jean-Marc Duplaix, told reporters the group was satisfied with Gucci’s performance, adding that the brand had many initiatives planned to return to growth this year, its 100th anniversary.
Duplaix said trends across China and Asia as well as the US remained supportive in the first weeks of the year for the luxury market, although Europe was more difficult.
Restrictions on travel, dining out and other activities like skiing remain in place in many countries to fight the Covid-19 pandemic, weighing on tourist inflows and spending.
- Reporting by Silvia Aloisi and Sarah White; Editing by Jacqueline Wong and Devika Syamnath, of Reuters.