French luxury brand Kering reported a decline in its earnings for 2023. Nevertheless, the company is determined to pursue its investment strategy to get its flagship brand Gucci “back on track”.
Kering, who also owns Yves Saint Laurent, Balenciaga, and Bottega Veneta, reported a 17% decline in net profit to €2.98bn ($3.2bn).
Sales declined by 4% to 19.57 billion euros, during a challenging year for the company, as described by Francois-Henri Pinault, the CEO.
“Once again, our performance did not meet expectations,” Pinault said in a call with analysts.
“I have decided, together with our management team, that despite the current uncertain environment, we should not reduce our investments in the future,” he said.
“This will put some pressure on our short-term results, but we are determined to make this short-term pain pay off in the long term,” Pinault added.
Kering has warned that its full-year operating income will be weighed down by its investment strategy, due to ongoing economic and geopolitical uncertainty.
Kering replaced Gucci’s CEO in 2020. Jean-Francois Palus, a deputy CEO and Pinault confidant, took over from Marco Bizzarri, who had been leading the brand since 2015.
“Our priority is to get Gucci back on track,” Pinault said, warning that this “won’t happen overnight.