Kering Shares Drop After Sales Miss Estimates on Tourism Declineby
Stock declines as much as 4.3% after Gucci Sales Decelerate
Bottega Veneta's revenue dropped twice as much as expected
Gucci owner Kering SA fell as much as 4.3 percent after the French luxury-goods maker reported first-quarter revenue that trailed analysts’ estimates as slowing tourism arrivals in Europe weighed on demand for Bottega Veneta handbags.
Growth was 4 percent on an underlying basis, compared with the 5.6 percent gain anticipated by analysts, Kering said after European markets closed Thursday. Bottega Veneta’s revenue fell 8.3 percent, more than twice the decline anticipated by analysts.
“We hope this prompts management to make drastic changes to revitalize the brand which we see as impaired by lack of product innovation,” wrote Mario Ortelli, an analyst at Sanford C. Bernstein.
Bottega Veneta is suffering from overexposure to Hong Kong and high price gaps between Europe and Asia, along with the slowdown in tourism. Those same headwinds hurt competitor LVMH, whose first-quarter sales also missed estimates.
Gucci’s comparable sales rose 3.1 percent, slowing from the previous quarter’s 4.7 percent gain.