Kering, the owner of luxury brands such as Gucci and Yves Saint Laurent, is set to release its revenue for the third quarter on Tuesday. Let’s take a closer look at what to expect:
Revenue Forecast
According to FactSet, Kering is projected to report revenue of 4.52 billion euros ($4.79 billion) for the three months ending September. This forecast represents a decrease compared to last year’s third quarter revenue of EUR5.14 billion. Analysts polled by FactSet anticipate sales of EUR2.22 billion for Gucci, EUR799.5 million for Yves Saint Laurent, EUR390 million for Bottega Veneta, and EUR822.5 million for other brands. All these figures show a decline from the previous year.
What to Watch
Demand
Investors will be keeping a close eye on Kering’s commentary regarding its performance in a challenging macroeconomic environment. The luxury industry has been experiencing slower sales growth globally due to high inflation and interest rates, which have constrained consumer spending. Jefferies analysts pointed out that recent conferences have indicated a downward trend in the industry’s narrative. The extent of this decline is still surprising.
China
The Chinese market and the shopping habits of Kering’s Chinese clientele will also be of significant interest. China was once the world’s largest luxury market, but it has faced challenges, including a prolonged downturn in the property sector, weak exports, and reduced consumer demand. Additionally, the urban youth unemployment rate reached a record high of 21.3% in June.
Gucci Plans
UBS analysts highlight that investors will be particularly interested in Kering’s plans for its flagship brand, Gucci, following the departure of former CEO Marco Bizzarri. They will focus on potential reinvestments in the brand and the timing of a permanent CEO appointment.