(Boursier.com) — Kering climbs again by almost 1% to 413 euros this Friday, after a gain of already 5% yesterday after having published a limited decline of 4% in its turnover in the fourth quarter on a comparable basis and warned of a decline in its current operating profit in 2024 due to investments dedicated to relaunching its sales. In 2023, current operating profit stood at 4.746 billion euros, down 15%. Net income, Group share, stands at €2.983 billion. The proposed ordinary dividend is 14 euros per share.
Beyond a more difficult global market, Kering must face the slowdown of its flagship brand Gucci, which represents half of its turnover. In the fourth quarter, Gucci sales fell by 4% on a like-for-like basis, after a decline of 7% in the previous quarter… Sales of other brands Yves Saint Laurent (-5%) and Bottega Veneta (-4% ) also fell but less markedly than in the third quarter.
Activity grew in Asia-Pacific and Japan and trends in Western Europe and North America are “improving sequentially”, Kering further underlined.
For 2024, the luxury group says it wants to “prioritize the expenses and investments necessary for the long-term growth of its brands, while remaining vigilant on its cost structure…” In a context where growth in the sector is expected to continue “to normalize, the impact of this investment strategy will weigh on the group’s annual current operating profit, which should be lower than the level published in 2023, particularly in the first half of the year,” warned the Kering group.
Reassured?
For a major broker in the market, the performance is generally “reassuring”, despite the anticipation of a decline in its current operating profit in 2024 due to investments dedicated to reviving its sales…
The decline in the fourth quarter is significantly less significant than that observed in the previous quarter (-9%), thanks in particular to a sequential improvement in North America and Western Europe… AlphaValue is for purchase on Kering with a price target raised from 514 to 519 euros and JP Morgan remains ‘neutral’ with an adjusted target from 430 to 425 euros.
“Gucci is not performing less well than expected, which is a relief,” notes RBC, despite the slowdown in demand in Europe and the United States and the still sluggish recovery in China. .
Still regarding Gucci, the reception reserved for Sabato de Sarno’s collections is “definitely very encouraging”, declared the deputy general director of the luxury group Jean-Marc Duplaix. “While management announced a further deterioration in operating income, we do not believe this is a surprise given the macroeconomic environment and the need to continue to support the repositioning of the Gucci brand “, concludes Barclays.
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