No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Shares in French luxury group Kering came under pressure on Thursday, after first-quarter sales at disappointed.
The owner of Gucci, Yves Saint Laurent and Bottega Veneta, among others, acknowledged it had been a "difficult" start to the year.
Group revenues fell 14% in the three months to March End, to 3.9bn, on both a reported and comparable basis, compounding a 12% slide in sales the fourth quarter.
In Asia Pacific, sales tumbled 25%, in line with the fourth quarter.
Performances also weakened further in Western Europe and North America, with sales down 13% in both regions. Kering did not provide regional sales figures in the fourth quarter, but confirmed there had been a "sequential deceleration" in the last three months.
Among its brands, Gucci - its biggest label - reported the steepest fall in sales, down 25% on a comparable basis at 1.6bn, as Kering failed to turn the struggling house around.
Kering, which posted results after markets closed on Wednesday, said it was continuing to "strengthen and update" the Gucci product range.
It also named Balenciaga designer Demna artistic director during the quarter, although markets remain unconvinced about his ability to turn the brand around.
As at noon, shares in Kering - which is controlled by the billionaire Pinault family - were trading 5% lower in Paris.
Francois-Henri Pinault, chief executive, said: "As we had anticipated, Kering faced a difficult start to the year. In this environment, we are fully focused on executing on our action plans to reach our strategic and financial objectives and strengthening the positioning of our Houses on all our markets.
"We are increasing our vigilance to weather the macroeconomic headwinds our industry faces, and I am convinced that we will come out stronger from the present situation."
The luxury sector, already battling sluggish demand in its core US and China markets, is now facing further headwinds following Donald Trump's chaotic imposition of tariffs worldwide.
Russ Mould, investment director at AJ Bell, said: "Kering offers further evidence of the luxury sector's woes, as its core brand struggles to recover against a difficult backdrop.
"After a string of profit warnings in 2024, Kering has very little credit in the bank with investors. Luxury is supposed to be immune to vagaries of the economy, as its customer base are relatively untouched in a downturn. However, the Chinese market - which has been a source of significant growth for the industry - has been depressed since Covid.
"What's now apparent is not all luxury brands are created equal."