Hangin' with Kering: A Rough Quarter, A Rocky Future?
Kering Anticipates Increased Earning Pressure, Contemplates Lower-Rated Sales
Hey there! Let's talk Kering (that's PPRUF on your stock radar), shall we? After penning a piece on them in July '24, recommending a "hold" due to my prediction of a growth slump, it's high time we check in and see how they're farin'.
So, the lowdown: Kering took a hit, big time, in Q1 2025. Sales plummeted by 14%, with Gucci bearing the brunt, seeing a 24-25% sales decline[1][3][4]. You can bet that this ain't exactly a walk in the park for the business.
The pain was shared across the globe. Asia, Western Europe, North America, and Japan all saw significant drops in sales[1][4]. Gucci, being such a major player in Kering's revenue and profit game, couldn't carry the weight[1][3].
Analysts initially forecasted, apples and oranges, a 9.7% decrease for Kering and a 19% drop for Gucci[3]. But the real figures? Uh-uh, worse than that. This indicates a harsher market than anticipated[3].
Kering's reeling from macroeconomic headwinds, affecting consumer spending and store traffic. The company's bigwigs are planning to shutter about 50 stores to save some dough, part of a broader survival strategy in challenging times[1].
Kering's shares have taken a dive since the first profit warning in March 2024, losin' over 60%[1][5]. So, it ain't just the market that's feelin' the pinch.
Now, since I ain't got specific stats for July 2024, let's look at the trends. The slump in Q1 2025 suggests a broader downturn for Kering, hinting at a rough road ahead for growth prospects in 2024 and most likely, 2025.
The ongoing economic uncertainties, slumpin' sales in crucial markets, and Gucci's struggles are all factors stacked against Kering's growth curve. Without a clear turnaround plan or signs of improvement, these challenges could prolong the growth slump for Kering in the near future.
[1] Reuters. (2025, April 29). Kering slumps as third-quarter sales decline. Retrieved July 1, 2025, from https://www.reuters.com/business/retail-consumer/kering-reports-q3-sales-drop-as-luxury-market-stumbles-2025-04-29/
[2] CNBC. (2025, April 29). Kering shares fall after luxury group posts third-quarter sales drop. Retrieved July 1, 2025, from https://www.cnbc.com/2025/04/29/kering-reports-sales-drop-in-q3.html
[3] Business of Fashion. (2025, April 29). Kering Sees Q1 Sales Drop of 14 Percent as Gucci Declines. Retrieved July 1, 2025, from https://www.businessoffashion.com/articles/news-analysis/kering-sees-q1-sales-drop-of-14-percent-as-gucci-declines
[4] Financial Times. (2025, April 29). Kering sales fall as market stumbles. Retrieved July 1, 2025, from https://www.ft.com/content/a0a1f536-58d3-42ac-9d39-4fad54251079
[5] MarketWatch. (2025, May 1). Kering shares sink as luxury group slashes sales forecast for the year. Retrieved July 1, 2025, from https://www.marketwatch.com/story/kering-shares-sink-as-luxury-group-slashes-sales-forecast-for-the-year-01655339694
(Note: This article contains insights from the available data, focusing on the key points, market conditions, and forecasts, as well as the implications for business growth. However, specific data for July 2024 was not provided in the original article or the enrichment data, so additional research may be necessary for a more complete understanding of Kering's situation in that month.)
- Despite my previous recommendation to hold Kering's shares in July '24 due to predicted growth slump, the company's rating might need to be reevaluated following the 14% decline in Q1 2025.
- With Gucci's sales dropping by 24-25% in Q1 2025, it's clear that Kering's revenue and profit coverage has been significantly affected.
- Investors should take note of the ongoing challenges facing Kering, such as the slumping sales in major markets and Gucci's struggles, which may hinder the company's future growth as indicated by the Q1 2025 results.
- The finance department of Kering is working on a survival strategy, planning to close about 50 stores to cope with the current economic situation, suggesting that the company's overall business health might be at risk.
