Kering shares pop 6% on fourth-quarter beat even as sales at embattled Gucci brand lag – CNBC
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The market had put faith in a sector-wide turnaround after stellar results from Cartier owner Richemont, but sustained weakness in LVMH’s fashion and leather goods and wines and spirits segments pointed to further divergence in the sector.Kering, which is especially exposed to the Chinese consumer, has been battling a particularly acute downturn, as its star label Gucci has fallen out of vogue.On Thursday, the fashion group announced the departure of Gucci design chief Sabato De Sarno, in the first major change since Gucci CEO Stefano Cantino joined last year to revive the brand. Minimalist designer De Sarno was in situ for less than two years, after replacing Alessandro Michele, whose maximalist designs defined the brand over previous years.De Sarno’s replacement will be announced “in due time,” the company said in a statement.Simone Ragazzi, senior equity analyst at Algebris Investments, on Monday said that Kering would be hoping to signal a reset for the brand with the new design appointment, but added that investors were likely to remain cautious as legacy issues remain.”This is a hope the market is betting on for quite a long time. It is always a little bit of a question mark,” he told CNBC over a video call.”The brand got used to the ups and downs in the past, because it is one of the most fashion-driven luxury groups,” he continued. “The hope is that the new designer can repump the brand.”Kering shares are currently down 2.5% this year, with the stock having more than halved since 2023.Luca Solca, senior analyst for global luxury goods at Bernstein, pointed to positive developments in operating profits across virtually all brands in 2024, but noted that the company still has a steep hill to climb to return to its previous highs.”The absolute decline relative to 2023 is striking. This was an ‘annus horribilis’ for Kering, that much is reflected in the share price. We expect the market to focus on the new creative responsibility for Gucci,” he said.Got a confidential news tip? 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