Gucci missed analysts’ expectations, with sales growing only by 3.8 percent in Q3. The slowdown in sales resulted from a loss in the pace of recovery from the coronavirus pandemic in various markets across the globe.
While the brand enjoyed strong sales in the U.S. and western European market, a spike in COVID-19 infections in July and August negatively impacted the company’s business in the Asia-Pacific region, which is a key market for the Kering brand.
Overall sales increased by 12.2 percent on a comparable basis, which was slightly higher than analysts forecast of an 11 percent increase.
The decline in sales is particularly significant for Gucci’s parent company as the brand accounts for more than half of annual sales and it has been losing its growth momentum to growing competition from other luxury brands, Business of Fashion reported.
The company is, however, bullish on its future growth prospects. Kering’s CFO Jean-Marc Duplaix noted that the luxury group expects Gucci’s sales to improve in Q4 as its new Aria collection was launched across its stores late last month.
“We expect a very intense end of the year,” he said. The group is reportedly looking to support the Gucci brand by making investments in events, communication and stores.