(Sharecast News) - Shares in Gucci-owner Kering tumbled on Wednesday, after the French luxury group warned on profits.
In a brief statement released late on Tuesday, Kering - which also owns Saint Laurent, Creed and Alexander McQueen, among others - said first-quarter consolidated revenues were likely to be down 10% year-on-year.
The decline was largely attributed to flagship brand Gucci, which saw an even steeper sales drop, Kering noted, especially in Asia-Pacific. First-quarter sales are expected to be down nearly 20% year-on-year.
Gucci accounted for around two thirds of group operating income in 2023.
As at 0915 GMT, the Paris-listed stock had slumped 14%. Other fashion brands were also under pressure, with France's LVMH and Switzerland's Richemont both down 3%, and Hermes 1% weaker.
In London, Burberry was down 4% at 1,179p
This is despite recent quarterly numbers from LVMH and Hermes showing a jump in sales.
Kering said it had expected the first half of the year to be "challenging". The firm, which is controlled by the billionaire Pinault family, recently appointed Valentino's Sabato de Sarno as creative director, as it looks to revitalise the Gucci brand.
His collections only have been available in selected Gucci stores since mid-February, however, although Kering said the new collection was "meeting with highly favourable reception".
Jefferies said: "The warning largely reflects a sharp deterioration of Gucci's resonance in APAC and China in particular. This at a time with the transition to the De Sarno signature remains in its early stages.
"While a mixed renminbi backdrop may have added an extra challenge, the news suggests a deeper trough and material...downgrades. Investors will be especially keen to assess whether Kering's M&A ambitions in the immediate future may be affected."
Kering is due to release first-quarter numbers on 23 April.
Burberry (BRBY)
