Kering (KER) Q2 2024 earnings summary

Executive summary

• Group revenue for H1 2024 declined 11% year-over-year to €9,018 million, with all major brands except Bottega Veneta and Kering Eyewear posting declines, reflecting a challenging luxury market environment.

• Recurring operating income fell 42% to €1,582 million, and net income attributable to the Group dropped 51% to €878 million.

• The group is focused on executing long-term strategy, investing in brand desirability, exclusivity, and innovation, and reigniting top-line growth through product, communications, and distribution initiatives.

• Significant real estate acquisitions in New York and Milan, and a €1.75 billion bond issue to enhance liquidity.

• Achieved AAA CDP score for climate commitments and formed a partnership with the National University of Singapore for sustainability impact measurement.

Financial highlights

• H1 2024 revenue: €9,018 million (-11% reported and comparable); recurring operating income: €1,582 million (-42%); net income, Group share: €878 million (-51%).

• EBITDA decreased 28% to €2,595 million, with EBITDA margin down 6.9 points to 28.8%.

• Free cash flow from operations was €1.9 billion excluding real estate acquisitions; including these, it totaled €1.1 billion.

• Net debt increased to €9,922 million from €8,504 million at year-end 2023.

• Basic earnings per share for H1 2024 was €7.16, down from €14.60 in H1 2023.

Outlook and guidance

• Recurring operating income in H2 2024 is expected to decline by approximately 30% compared to H2 2023, reflecting ongoing demand uncertainties in the luxury sector.

• No expectation for margin improvement in H2 vs. H1; revenue may not turn positive in H2.

• Strategic focus remains on long-term brand development, cost optimization, and maintaining financial flexibility.