Kering -15.4% for the quarter: Bottega Veneta takes off, Gucci drops

Kering, -15,4% il trimestre: Bottega Veneta vola, tonfo di Gucci  

Bottega Veneta takes off while Gucci loses ground. In summary: -15.4% revenue (at current rates) for Kering’s first quarter of 2020. “The Covid-19 pandemic has had a heavy impact on our operations during this first quarter. We took immediate steps to guarantee the security and wellbeing of all Kering’s employees around the world, as well as that of our clients”, said CEO François-Henri Pinault, without offering any forecasts for the future.

Kering’s quarter

Kering closed the first quarter with 3.203 billion euro in revenue: -15.4% at current rates and -16.4% at constant rates on a comparable basis (which doesn’t factor in acquisitions and currency rates). Retail sales dropped by 19%. Online ones grew by 21%. Factset’s analysts had forecasted revenue of 3.26 billion euro.

Gucci’s drop

The brand most hit was Gucci, due to its popularity in China. The brand lost about one-quarter of its revenue in comparison to the first quarter of 2019: -23.2% on comparable basis and -22.4% at current rates. “The trend in China is slowly improving since stores opened up again at the start of March”, reads a note published by the group. As written by Reuters, Kering’s CFO Jean-Marc Duplaix, it is premature to try evaluating the recovery of China’s sales. Duplaix has also stated that he doesn’t expect a significant recovery in Europe or the United States before June or July.

Bottega Veneta takes off, while YSL limits the damage

Yves Saint Laurent’s decrease was of -13.8% “due to its limited exposure to Asian markets and a good start in the first quarter in Western Europe and North America”. Meanwhile, Bottega Veneta outdid itself, earning 274 million euro even during the pandemic. In other words: +10.3% at current rates and +8.5% using comparable basis. “The brand’s collections were a great success among clients in North America (+31.3%) and Western Europe (+25.4%). Yet, revenue decreased in the Asia-Pacific region and Japan”. Other brands lost 5.4% revenue even though “sales in the Couture & Leather Goods department held their ground well”.

Dividend reduction

Kering’s board called for a 30% reduction of the dividend price by the board (convocated on April 16th behind closed doors), to a fixed 8 euro per share. Other actions include: a 25% reduction of Mr. Pinault’s stipend along with the cancellation of all his bonuses, which was done for the vice-CEO Jean-François-Palus as well. The board’s income was also reduced by 30%.

Images from gucci.com (to the left) & (to the right) bottega veneta.com

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