Lack of tourists weighs on Gucci’s third quarter results

Worldwide
Published:  23 October, 2020

French luxury conglomerate Kering has posted third quarter consolidated revenue of €3,717.7 million, down 4.3% as reported and 1.2% on a comparable basis.

Kering said it reaped the benefits of sharp growth in certain regions, notably North America (+44.1%), driven by a rebound in local demand, and Asia-Pacific (+18.5%), “fuelled by excellent momentum” in Mainland China, but sales performances in Western Europe (-41%) and Japan (-22.8%) were “still severely hampered by the halt in tourism”. Online sales continued a growth trajectory, up 101.9% in the third quarter, led by North America and Asia-Pacific. In the first nine months of the year, e-commerce accounted for 12.5% of Group retail sales. Wholesale revenue was down 5.2% on a comparable basis, reflecting both the sharp slowdown in travel retail and the Group’s strategy towards increasingly exclusive distribution, according to Kering.

Gucci’s revenue is said to have “picked up sharply in the third quarter” compared with the previous second quarter. At €2,087.8 million, the brand’s revenue was down 12.1% as reported and 8.9% on a comparable basis, and retail sales declined 4% on a comparable basis. Yves Saint Laurent is reported to have returned to growth in the third quarter in both its directly operated stores and its wholesale channel. The brand’s total revenue of €510.7 million was up 0.8%, year on year, as reported and 3.9% on a comparable basis, while Bottega Veneta’s revenue totalled €332.5 million, up 17% as reported and 20.7% on a comparable basis.

Overall, Kering said the Other Houses returned to growth in the third quarter, with revenue of €669.1 million, up 9.3% as reported and 11.7% on a comparable basis, with Alexander McQueen and Balenciaga delivering double-digit growth in both retail and wholesale channels. “These two Houses are benefiting from the expansion of their directly operated store networks in high-growth markets, especially Asia-Pacific and North America, and progress in their online sales is also accelerating”, said Kering.