Gucci-owner Kering has delivered a profit warning due to slumping sales of its premier luxury handbags.
Revenue for the first quarter of 2024 was down 11% as reported and down 10% on a comparable basis to €4.5 billion.
Guuci sales plummeted 21%, Yves Saint Laurent was down 8% and Bottega Veneta fell just 2%.
Chief executive François-Henri Pinault did not beat around the bush.
“Kering’s performance worsened considerably in the first quarter. While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline.
“In view of this revenue decline, together with our firm determination to continue investing selectively in the long-term appeal and distinctiveness of our brands, we now expect to deliver sharply lower operating profit in the first half of this year.
“All of us are working tirelessly to see Kering through the current challenges and rebuild a solid platform for enduring growth.”
Kering shares were kicked 9.5% lower.