Gucci sales declined 8% in the first quarter, falling short of analyst expectations and impacting parent company Kering. The drop in sales contributed to a significant plunge in Kering shares, down as much as 10% on Wednesday.
The decline is attributed, in part, to the conflict in the Middle East, which negatively affected spending by shoppers from the region and reduced international travel. This setback adds pressure on Kering’s CEO, Luca de Meo, as he works to revitalize the Italian luxury brand.
Despite the underwhelming results, Kering reported positive sales trends earlier in the year. Investors are now focused on the company’s Capital Markets Day, where de Meo is scheduled to unveil a new strategic plan intended to boost the group’s performance.
The brand has yet to demonstrate a substantial revival following recent creative and management shifts.