Kering reported a 4% decline in fourth-quarter sales on a like-for-like basis on Thursday, and warned of a drop in operating income before non-recurring items in 2024 due to investments to boost sales.

The downturn in the fourth quarter was less severe than in the previous quarter (-9%), thanks in particular to a sequential improvement in North America and Western Europe.

Sales of the Gucci flagship brand fell by 4% on a like-for-like basis, following a 7% decline in the previous quarter. Sales of the other brands Yves Saint Laurent (-5%) and Bottega Veneta (-4%) also fell, but less sharply than in the third quarter.

"Gucci is not underperforming as expected, which is a relief," observed RBC analyst Piral Dadhania.

On the Paris Bourse, Kering rose by

0,96

% à

394

euros to

9

h

39

when the CAC 40 was winning

0,14

% at the same time.

For several months, the luxury goods sector has been faced with a slowdown in demand in Europe and the United States, and a sluggish recovery in China, the industry's traditional growth driver.

Kering is also facing a slowdown at Gucci, which accounts for half of its sales and which the group hopes to revive with the new artistic director Sabato de Sarno appointed a year ago.

The luxury group is also planning investments to ensure the long-term growth of its brands.

"In a context where growth in the sector should continue to normalize, the impact of this investment strategy will weigh on the group's annual operating income recurring, which should show a decline compared with the level published in 2023, particularly in the first half of the year", warns Kering.

Last year, operating income recurring came to 4.75 billion euros, down 15%.

Last week, arch-rival LVMH reported organic sales growth of 10% in the fourth quarter, a performance welcomed by the market. Other rival Hermès will publish its accounts on Friday. (Written by Blandine Hénault, with Mimosa Spencer, edited by Bertrand Boucey and Kate Entringer)