Kering, the owner of brands like Gucci and Balenciaga, saw shares jump more than 6% despite warning the downturn in luxury goods would continue into 2024.
François-Henri Pinault, the group’s boss, said it faced a “trying” 2023 and because of its plan to continue investing in its brands in 2024, earnings may suffer in the short term.
Additionally, a “normalisation” of the industry, compared to the post-pandemic boom of previous years, is also expected to weigh on earnings,
Therefore, the company expects profits to fall in 2024, although management is confident it will not impact is long-term goals.
Alongside its results, Kering revealed it is focused on two goals, one being “to maintain a trajectory of long-term profitable growth” and the other to reinforce itself “as one of the most influential groups in the luxury industry”.
Pinault added: “In a market environment that remains uncertain in early 2024, our continuing investments in our Houses will put pressure on our results in the short term.
“Thanks to the experience gained across the group through a decade of outstanding expansion, we are confident in achieving our long-term ambitions.”
Sales at the French firm fell 4% in 2023 to €19.6 billion and, like many other luxury goods companies, the drop was driven by a steep decline in the last quarter, with revenues dipping by 15%.
Recurring operating income slipped by 15% to reach €4.74 billion.
Revenues in Gucci, Yves Saint Laurent and Bottega Veneta all dropped by around 5% year on year.
Despite the lift in shares on Thursday, the stock has lost over a quarter of its market value within the last 12 months.