KER Kering

By Joshua Kirby

Kering shares dropped sharply Wednesday after sales at key brand Gucci clouded the company's 2020 earnings report.

At 0835 GMT, shares traded down 8.5% at 517.20 euros ($626.10).

Gucci, by far the French luxury-goods conglomerate's biggest brand, posted a 10% sales decline in the final quarter of 2020 to take it to a 23% drop for the full year, lagging behind stable mates such as Balenciaga and Bottega Veneta that increased their sales over the year.

The figures represent a gap of some 30 percentage points in the quarter against rival soft-luxury brands at LVMH Moet Hennessy Louis Vuitton, Bernstein analyst Luca Solca noted. "We expect market pressure to increase on Gucci to produce efforts aimed at reinstating momentum," he said.

Questions will center around Kering's strategy to boost its powerhouse brand, according to RBC Capital Markets analyst Piral Dadhania. "We believe today's print will raise further questions on the revenue-recovery profile for Gucci, and the investment requirements," Mr. Dadhania said.

Write to Joshua Kirby at joshua.kirby@dowjones.com; @joshualeokirby

(END) Dow Jones Newswires

February 17, 2021 03:58 ET (08:58 GMT)

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