Luxury conglomerate Kering reported a challenging first half of 2024, with group revenue declining by 11% to €9.01 billion. The company attributed the downturn to a difficult market environment that impacted both top-line growth and profitability.
While Kering’s jewellery houses, Boucheron and Pomellato, demonstrated double-digit growth, the overall performance of the jewellery sector was overshadowed by declines in other key brands like Gucci and Yves Saint Laurent.
Gucci, Kering’s flagship brand, experienced a 20% decline in revenue to €4.1 billion, impacted by lower store traffic and a decrease in sales in the Asia-Pacific region. Yves Saint Laurent also faced challenges, with revenue dropping by 9% to €1.4 billion.
Despite the headwinds, Kering remains optimistic about its long-term prospects. The company has doubled down on investments to enhance its product offerings, strengthen brand communications, and maintain exclusive distribution networks.
“We are working assiduously to create the conditions for a return to growth,” said François-Henri Pinault, Chairman and CEO of Kering. “While the current context might impact the pace of our execution, our determination and confidence are stronger than ever.”
Kering’s financial performance was further impacted by a 42% decline in recurring operating income to €1.6 billion, reflecting increased investments in the business. However, the company maintained a strong cash position, with free cash flow from operations reaching €1.9 billion.
Looking ahead, Kering anticipates a challenging second half of the year, with recurring operating income potentially declining by approximately 30% compared to the same period last year. The company is focusing on cost optimisation measures while continuing to invest in its long-term growth strategy.
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
