France's Kering's 2024 revenue falls 12% to $17.7 bn, retail sales 13%

The cost of sales slightly decreased to €4.5 billion, resulting in a gross margin of €12.7 billion compared to €14.9 billion in the previous year. The company recorded net income of €1.2 billion (~$1.3 billion) from continuing operations, down from €3.1 billion in 2023, with €1.1 billion attributable to the group and €94 million to minority interests, Kering said in a press release.

The operating income of the group declined to €2,312 million from €4,643 million after accounting for €242 million in non-recurring operating expenses. The financial result worsened to a loss of €614 million compared to €410 million in 2023.

The wholesale revenue of the group was down 22 per cent on a comparable basis, as they continued to heighten the exclusivity of their distribution. At the group level, wholesale and other revenue was down 9 per cent on a comparable basis.

Recurring operating income decreased by 46 per cent, falling to €2.6 billion (~$2.7 billion) from €4.7 billion, representing 14.9 per cent of revenue compared to 24.3 per cent in 2023.

The EBITDA of the company dropped by 29 per cent to €4.7 billion from €6.6 billion, reducing the company’s share of revenue from 33.6 per cent to 27.1 per cent. The net income attributable to the group declined by 62 per cent to €1.1 billion, while recurring net income attributable to the group fell by 57 per cent to €1.3 billion from €3.1 billion.

Earnings per share (EPS) declined significantly. Basic and diluted EPS for net income attributable to the group stood at €9.24, compared to €24.38 and €24.37, respectively, in 2023.

Brand-wise, Gucci experienced a significant drop, with revenue decreasing by 23 per cent YoY on a reported basis and 21 per cent on a comparable basis, falling to €7.7 billion. Yves Saint Laurent also saw a decline, with revenue decreasing by 9 per cent on both reported and comparable bases, reaching €2,881 million from €3,179 million.

Bottega Veneta, however, demonstrated growth, with revenue increasing by 4 per cent on a reported basis and 6 per cent on a comparable basis, rising to €1,713 million from €1,645 million. The Other Houses segment reported an 8 per cent YoY decline in revenue on a reported basis and a 7 per cent decrease on a comparable basis, with revenue falling to €3,221 million from €3,514 million.

“In a difficult year, we accelerated the transformation of several of our houses and moved determinedly to strengthen the health and desirability of our brands for the long term. Across the group, and at Gucci first and foremost, we made critical decisions to raise the impact of our communications, sharpen our product strategies, and heighten the quality of our distribution, all in the respect of the creative heritage that distinguishes our brands. We secured our organisation, made key hirings, sped up execution, and intensified the efficiency of our operations. Our efforts must remain sustained, and we are confident that we have driven Kering to a point of stabilisation, from which we will gradually resume our growth trajectory,” said Francois-Henri Pinault, chairman and chief executive officer (CEO) at Kering.

Fourth quarter (Q4) financial

In the fourth quarter of 2024, revenue was down 12 per cent both as reported and on a comparable basis. Sales from the directly operated retail network decreased 13 per cent on a comparable basis. Trends improved sequentially in all regions, except Japan. Wholesale and other revenue was down 10 per cent overall on a comparable basis, and wholesale revenue was down 25 per cent for the houses.

Fibre2Fashion News Desk (SG)