Kering SA shares tumbled after slowing growth at Gucci, its biggest brand, put more pressure on the label’s new collection to deliver a strong holiday season.
Comparable sales at the Italian brand rose 3.8% in the third quarter from a year earlier, Kering said in a statement. Analysts had forecast a 9.3% increase.
The performance suffered from virus restrictions, which hindered demand in China, New Zealand, Australia and elsewhere, Jean-Marc Duplaix, Kering’s chief financial officer, said on a call with reporters. The stock fell as much as 5.8% in early Paris trading.
Gucci, which generates more than half of Kering’s revenue, released its Aria collection near the end of last month. The line, which celebrates the brand’s centennial, features suede jackets and flowery patterns reminiscent of the 70s. Gucci is particularly reliant on new products driving demand, so shoppers’ reactions are being closely watched.
In a call with analysts, Duplaix said he expects Gucci sales will get a boost from Aria, adding the group is pleased with its pricing strategy and recent sales trends.