Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — French luxury-goods maker Kering SA reported first-quarter revenue that trailed analysts' estimates as slowing tourism flows weighed on demand in Europe.
Sales climbed 2.7 percent to €2.72 billion ($3.07 billion), Paris-based Kering said in a statement after European markets closed Thursday. Analysts predicted €2.78 billion, according to estimates compiled by Bloomberg. Growth was 4 percent on a basis that excludes currency shifts, acquisitions and disposals, compared with the 5.6 percent gain anticipated by analysts.
Gucci chief executive officer Marco Bizzarri and creative director Alessandro Michele got Kering's largest brand growing again by the end of their first year in charge. Their next challenge is to keep momentum going as a slowdown in China, the strong dollar as well as terrorist attacks in Europe have crimped demand for pricey handbags and garments. Gucci's comparable sales rose 3.1 percent, slowing from the previous quarter's 4.7 percent gain.
“We are confident that we can extend our growth trajectory over the full year,” Kering chief executive officer Francois-Henri Pinault said in the statement. Gucci’s new collections “continue to draw an enthusiastic response.”
ADVERTISEMENT
The biggest disappointment was at handbag maker Bottega Veneta, which reported another quarter of declining sales. Revenue fell 8.3 percent, more than twice the decline anticipated by analysts. The brand is suffering from overexposure to Hong Kong and high price gaps between Europe and Asia, along with the slowdown in tourism.
Yves Saint Laurent, which replaced its creative director this month, was again the best performer, posting a 27 percent increase in sales that beat analysts' expectations.
Kering’s shares fell 0.8 percent to 160.10 euros at the close in Paris.
By Andrew Roberts; editors: Matthew Boyle and Paul Jarvis.
