Kering Warns Profit to Tumble Following Gucci Woes in China

  • First-half recurring operating income set to fall by up to 45%
  • Company’s biggest label, Gucci, is undergoing a turnaround

Kering has been trying to turn around Gucci, which accounts for more than two-thirds of its operating profit.

Photographer: Chan Long Hei/Bloomberg

Kering SA warned that profit will plunge in the first half of the year as the crisis at Gucci, its biggest brand, deepens.

Recurring operating income will drop between 40% and 45% in the first six months, Kering said in a statement Tuesday. That’s after comparable sales at Gucci tumbled 18% in the first quarter on slack demand in China.