Mavis Hui's rating is based on several observed financial challenges and strategic efforts within Kering SA. The company experienced a significant revenue decline of 9% in the first half of 2024, which impacted its recurring operating income by 42% and core profit by 50%. This downturn is primarily attributed to sluggish market conditions, especially in China, and strategic repositioning efforts with its core Gucci brand, which saw a 20% drop in revenue. Despite these challenges, Kering is committed to its long-term strategies, focusing on revitalizing top-line growth and sustainable practices across its luxury fashion brands. Management anticipates a narrowing dip with a 30% projected decline in recurring operating income for the second half of 2024.