Gucci Crisis Drags Kering Shares To Largest Annual Drop Since 2008

Kering SA, the owner of Gucci, is experiencing worsening problems in mainland China, with annual profits expected to hit their lowest level since 2016 due to weak demand. The company's shares have plunged by over 40% this year, marking the steepest annual decline since the 2008 global financial crisis. Kering's revenue in the third quarter was 3.79 billion euros, down 15% year-over-year and missing estimates. The company's comparable revenue slid by 16%, much worse than the estimated 10.9% decline. Gucci revenue on a comparable basis fell by 25%, while Yves Saint Laurent revenue declined by 12%. Bottega Veneta revenue, however, increased by 5% on a comparable basis. Kering blamed "major uncertainties" weighing on consumers in its major retail markets worldwide for the dismal third-quarter report. The company expects recurring operating income for the year to fall to around 2.5 billion euros, or the lowest level since 2016. This decline is part of a broader trend, with LVMH Moët Hennessy Louis Vuitton also reporting lower sales in the third quarter due to the pullback in Chinese luxury demand. The China slowdown is also affecting the automotive industry across the West, with no end in sight despite Beijing's monetary stimuli.