Gucci First Quarter Revenue Grew 24.6% Year-On-Year Growth Slowed Sharply

After 12 quarters of a run, Gucci, which has successfully reached 8 billion euros per year, will enter a stable period.

Kai Yun group released today's first quarter performance report that attracted widespread attention in the industry. In the three months ended March 31st, the revenue of Kai Yun Group continued to be driven by the Gucci performance of the core brand, up 21.9% to 3 billion 785 million euros compared with the same period last year, while the sales of luxury goods department recorded an increase of 21.7% to 3 billion 648 million euros.

The picture shows Kai Yun group's main performance data for the first quarter.

2 years ago, Gucci outperformed the growth of LVMH's fashion leather sector, but the growth rate was almost the same in the first quarter of this year.

The picture shows the first quarter revenue growth of Gucci in the past 5 years. Tabulation: Fashion headlines

Among them, Gucci sales increased by 24.6% to 2 billion 326 million euros, the growth rate slowed sharply compared with 37.9% in the same period last year, the growth rate of the chain also slowed down, the increase in the fourth quarter of last year was 28%.

However, the quarterly performance still exceeded Bloomberg analyst's forecast growth of 20%, and has recorded double-digit growth for 13 consecutive quarters.

During the reporting period, sales of Gucci wholesale channels increased by 16%, while direct retail outlets increased by 20% compared to the same period last year. Retail sales in Asia Pacific, including China, increased by 35%, mainly due to the contribution of Chinese consumers, while the growth rate in the North American market slowed to 5%.

Last year, 62% of Gucci consumers were the millennial generation. On the whole, 35% of them came from Chinese consumers.

Group chief financial officer Jean-Marc Duplaix revealed in the conference call after the earnings report that after the United Kingdom and the United States, China has become the third market for Gucci to set up e-commerce business. He also stressed that the demand for brands in China has not slowed down and will continue to expand Gucci's market share in the mainland of China in the future.

To respond to the national value-added tax reduction policy and benefit more Chinese consumers, the Gucci retail price in mainland China has been cut by 3% since April 1st.

Although Gucci's sales growth in the first quarter is slower than this one step ahead, Jean-Marc Duplaix said that after two years of "absolute special growth", Gucci is now in the normal stage. The group will usher in a turning point in the second half of this year, but the change will be gradual.

CEO Marco Bizzarri admitted to employees last year that brand turnover is unlikely to grow at a rate of 50% to 60% every month. The slowdown after explosive growth is normal.

He stressed that it is still confident of the future of Gucci and is maintaining its unique competitive advantage from all brands.

Some analysts believe that the market forecast for Gucci has slowed down for some time. The brand has only shown signs of slowing down until now. It has proved the great potential. Perhaps Gucci can not sustain high-speed growth, but it can maintain a sustained high growth like Saint Laurent.

However, some industry analysts remain skeptical that consumers have entered the fatigue period for Gucci. If Kai Yun group can not advance the next growth point with explosive force, then the peak period of the group has passed.

At present, the industry is beginning to worry about whether the creative director Alessandro Michele, who has been in office for four years, can continue to create freshness for consumers. This year, the new Gucci series is accused of being suspected of racial discrimination because of a black turtleneck sweater "Balaclava", which undoubtedly makes investors more vigilant.