Brioni blazers are displayed at their outlet retail store at Bicester Village in Oxfordshire, Britain, August 21, 2024. REUTERS
PARIS, Oct 24 (Reuters) – Shares in Gucci-owner Kering (PRTP.PA), rose on Thursday, shrugging off the French luxury goods company’s warning that 2024 operating income would almost halve to its lowest in years due to weak demand in China.
Kering shares were up 0.5% at 0729 GMT, after positive results from rival Hermes (HRMS.PA), helped lift the broader luxury sector.
The owner of fashion brands Saint Laurent, Balenciaga and Bottega Veneta also posted a larger-than-expected 16% drop in third-quarter revenue.
The company’s stock has taken a battering this year, sliding more than 40%, making it the worst performer in the luxury sector. One trading source said the guidance cut did not come as a surprise and bad news was “priced in”.
“Kering are controlling their controllable (e.g. cost control, efficiency focus, store optimisation) in a difficult luxury environment, however, relative performance is below
average and FY25E margin visibility is low,” analysts at RBC said.
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Reporting by Benoit Van Overstraeten in Paris, Danilo Masoni in Milan and Amanda Cooper in London; editing by Makini Brice and Jason Neely
