Kering: weak growth in Q1 2023
With sales of 5.077 billion euros in the first quarter of 2023, an increase of +2% on a reported basis, Kering did less well than its competitors LVMH (+17%) and Hermès (+22%). The group remains impacted by the poor performance of the Gucci and Balenciaga brands, and a declining US market.
By Eva Morletto26 avril 2023
Kering's financial results for the first quarter of 2023 were published on Tuesday, April 25, showing a poor progression of the group headed by François-Henri Pinault. The recorded sales of 5.077 billion euros, an increase of +2% compared to last year, show contrasting performances. The most significant growth was recorded in Western Europe and Japan, while the American market was down. Asia is slowly beginning to recover its commercial potential thanks to the recovery in China.
Gucci recorded a modest increase of 1% with sales of 2.616 billion euros. In the fourth quarter of 2022, Gucci's sales were down -14% on a comparable basis compared to the same period in 2021. The Italian brand is banking on its core products, particularly handbags and women's ready-to-wear. The brand highly anticipates the first collection of Sabato De Sarno, who was appointed new artistic director in January. The designer's creations will be presented at Milan Fashion Week in September 2023.
Bottega Veneta posted stable results with a +5% growth in its boutique network but a -14% decline in sales in the wholesale network. The brand's revenue reached 395 million euros, thanks to Kering's efforts to promote its excellent craftsmanship and quality materials.
The Yves Saint Laurent brand had an encouraging start to the year, with revenues of 806 million euros, up 9% on a reported basis. The house, headed for ten years by the Italian Francesca Bellettini, recorded an operating income of over one billion euros in 2022.
Forecasts for the coming months are optimistic. The Eyewear division achieved overall sales of 433 million euros, a success made possible by acquiring high-end eyewear brands, including the iconic Maui Jim label.
Although the figures are not specified, Kering's press release indicates that Balenciaga's results have a positive trend. However, the sales of "other houses," of which Balenciaga is a part, fell by -9%, reaching 890 million euros. The fear of further repercussions generated by the unfortunate advertising campaign last fall is still present. "Kering’s performance in the first quarter remained mixed, as we had anticipated. As we work to augment the desirability of our brands and raise their profile in key markets, we are encouraged by the gradual improvement in activity month after month during the period" announced François-Henri Pinault following the official presentation of the results.
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