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Investing.com -- Kering SA (EPA:PRTP) shares fell more than 8% on Wednesday after its flagship Gucci label reported weaker-than-expected first-quarter sales, with comparable revenue down 8%, missing analyst forecasts for a 6% decline.
Group first-quarter revenue came in at €3.57 billion, below the €3.59 billion consensus, for comparable growth of flat percent, after declines of 6% and 3% in the third and fourth quarters of the prior year.
Gucci, the group’s largest label, posted revenue of 1.35 billion euros, missing a 1.39 billion euro consensus estimate and dragging comparable sales in the Fashion and Leather Goods division down 3%, compared with analysts’ expectations for a 2% decline.
Jefferies, who rates the stock “hold” with a price target of €280, said "evidence of a clear turn in Gucci’s brand heat remains patchy," adding that the April 16 capital markets day was "unlikely to provide a ready-made toolbox of KPIs."
By cluster, Americans turned positive in the quarter versus the fourth quarter, while Europeans saw “a very nice improvement” though remained negative. The Chinese remained in decline, as in the fourth quarter, and the Japanese remained "difficult."
The Middle East weighed on group retail comparables by approximately 70 basis points; excluding the Middle East, March comparable growth would have been plus 3% for the group versus flat.
Kering Jewellery was the standout division, posting comparable growth of plus 22% against consensus of plus 10%, driven by Boucheron price increases in Asia and a new ring in the Quatre line. Kering Eyewear grew plus 7%, against consensus of plus 5%. Corporate and Other reported plus 10% against consensus of plus 1%.
Regional comparable retail sales rose 9% in North America, but fell 3% in Japan, declined 4% in Asia-Pacific excluding Japan, dropped 7% in Western Europe and were down 8% in the rest of the world.
Management reiterated full-year guidance, maintaining a flat gross margin outlook and guiding to a "probable slight improvement" on operating expenditure versus its prior flat guidance. The 2026 ambition remains growth across all brands, excluding Alexander McQueen.
Jefferies forecast full-year 2026 group adjusted EBIT of €1.85 billion against consensus of €1.94 billion, with earnings per share of €6.67 against consensus of €6.16.
Navamya Acharya contributed to this report.