Kering's stock price fell, and the luxury goods company warned that profits would drop sharply in the first half of the year as the crisis of its biggest brand, Gucci (Gucci), deepens.
The company's stock price fell 8.9% in early Paris trading, to its lowest level since 2018. It has already fallen 20% this year, while rival LVMH and Hermès stock prices have risen.
Kering Group announced on Tuesday that recurring operating profit is expected to drop by 40% to 45% in the first six months of this year. Gucci's comparable sales fell 18% in the first quarter due to weak demand.
Gucci accounts for more than two-thirds of Kering Group's operating profits. Kering appointed Sabato De Sarno as the new creative director of Gucci last year, and its design products began entering stores in February. Kering warns that as the luxury market cools down, it will take time to reverse the current situation.
Gucci is also focusing on the handbag category. Poulou said in a conference call with analysts that Kering Group plans to accelerate the launch of new products this year.