Sales at Gucci are expected to fall by 20% in the first quarter due to a slowdown in Asia, according to its Paris-based owner Kering.
The warning contrasts with rivals LVMH and Hermès whose sales have remained resilient. The luxury market has grown in the past decade but sales have not been as impressive in recent years.
Gucci is estimated to get more than a third of its sales from China, whose economy has been struggling.
Kering said in a statement that the profit warning “reflects a steeper sales drop at Gucci, notably in the Asia-Pacific region”. The firm is scheduled to report its financial results on 23 April.
Gucci accounted for two-thirds of group operating income last year. Kering’s other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta.
Last month, Kering reported that its net profit last year fell by 17%. Its shares have fallen by more than 23% over the past year.
In comparison, its bigger rival LVMH, which owns Louis Vuitton, Moët & Chandon and Hennessy, posted higher-than-expected sales for 2023.
Hermes also celebrated its record annual sales last year with plans to reward all employees worldwide with a bonus.
While their results showed resilience in the luxury market, Gucci is known to target younger, aspirational shoppers who are more vulnerable to economic pressures.
Last year, Kering changed Gucci’s top management by appointing Jean-François Palus as its chief executive officer and Sabato De Sarno as its creative director.
The first items of his Ancora collection were made available in mid-February.
The collection has been met with a “highly favourable reception,” Kering’s statement said.
