French fashion holding company Kering (KER.FR) reported that operating profit fell nearly 50% year over year in the third quarter, as weak demand in China materially weighed on final financial results. In addition to Gucci, the group owns brands such as Bottega Veneta, Balenciaga and Yves Saint-Laurent. Organic sales across the group fell 16% year over year to €3.79 billion, against analysts' estimates of 11%. Operating profit for the full year 2024 is expected to be €2.5 billion, according to the group, compared to $4.75 billion in 2023.
Sales at the Gucci brand fell 25% year-on-year, against a 21% decline expected by the market. The Gucci brand accounts for two-thirds of the group's operating profits and nearly half of sales. Next year, the company will change its CEO from longtime manager Jean-Francois Palus, to Stefano Cantino. Kering's owner Pinault indicated that the group is going through a difficult phase of transition. In the wake of Kering's announcement, we can expect weaker sentiment in the fashion sector, at tomorrow's opening of markets in Europe, where volatility may be recorded in LVMH (MC.FR) shares, among others. 
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