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Kering, owner of Gucci and Saint Laurent, warned on Wednesday that its operating income could fall by as much as 30 per cent in the second half of the year, compounding the woes at the French luxury company.

One of the biggest names in luxury, Kering was a laggard compared to peers LVMH and Hermès during the pandemic-era boom and its performance has only worsened as the industry as a whole has slowed.

Kering said sales at Gucci, its biggest brand accounting for half of revenues and two-thirds of profits, have fallen further with a turnround under a new designer having so far failed to gain traction.

Second-quarter sales at top brand Gucci fell 19 per cent on a like-for-like basis compared to one year earlier, including “a continuing marked decrease in Asia-Pacific”, Kering said.

Group sales in the three months to June 30 dropped 11 per cent to €4.5bn, and fell short of analysts’ expectations.

Operating income dropped 42 per cent in the first half of the year to €1.58bn, in line with expectations compiled by Reuters after the company guided sharply lower at its last results.

A recurring operating margin of 17.5 per cent in the first half was significantly lower than during the same period last year, which the company attributed to “negative operational leverage”.

“In a challenging market environment, which adds pressure on our top line and profitability, we are working assiduously to create the conditions for a return to growth . . . While the current context might impact the pace of our execution, our determination and confidence are stronger than ever,” said Kering chief executive François-Henri Pinault.

Kering has said it is continuing to prioritise long-term investment in its brands despite strained demand.

Gucci is still rolling out product lines from its new designer Sabato de Sarno, which the group said were being well received by customers.

But it is not the only brand that is struggling. At Saint Laurent, Kering’s second-largest label, sales fell 9 per cent on a like-for-like basis in the second quarter, accelerating a trend from earlier in the year.

Bright spots were Bottega Veneta, where sales rose 4 per cent in the second quarter, and the company’s eyewear division, where they increased 5 per cent. 

Kering’s shares have fallen more than 23 per cent so far this year to trade at €300 each, giving it a market capitalisation of around €36.6bn.

This is a far sharper sell-off than industry bellwether LVMH, after Kering shocked investors in April with a sharply lower profit outlook for the first half of the year. 

Controlled by the Pinault family, Kering had already issued a rare profit warning for the luxury industry in March amid falling sales, especially in the crucial Chinese market.

Smaller luxury companies Hugo Boss and Burberry, also in a turnround, have recently warned on profits. 

“More bad news and downgrades,” said Luca Solca, analyst at Bernstein. “The Kering guidance for the first half of the year is de facto materialising.”

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Levels of hunger are set to remain “shamefully” high, UN officials said as the multilateral organisation published a report that predicts almost 600mn people will be undernourished by 2030.

The report, published on Wednesday, came as senior UN officials called on donor governments to rethink prioritising national interests over foreign aid.

While the 582mn figure is lower than current levels, it is a long way off the target of eradicating hunger by 2030, set by the 191 member states that make up the UN under the multilateral organisation’s sustainable development goals in 2015.

Half of the number will be in Africa, according to the UN food, agriculture and health agencies, which together authored the report. Most of the remainder of people unable to consume enough calories to maintain a healthy lifestyle reside in Asia.

The report follows the publication of UN estimates, which show official development assistance to developing countries is going down. 

According to the UN report, only about a quarter of that assistance — $77bn — went to improving food security and nutrition in 2021, the most recent year for which data is available. 

Alvaro Lario, president of the UN’s International Fund of Agricultural Development (IFAD), said the political landscape was placing foreign aid and multilateralism “more and more into question” as national interests were being brought to the fore.

“That clearly diverts the focus on trying to address and join forces on tackling a global issue, which is food insecurity,” Lario told the Financial Times.

Rates of hunger jumped in the wake of the Covid-19 pandemic and Russia’s full-scale invasion of Ukraine and have since failed to come back down as UN agencies expected. Last year, between 713mn and 757mn people were facing hunger, according to the UN report.

While the number of people without enough to eat has declined in Latin America and the Caribbean and stayed relatively unchanged in Asia, it is continuing to rise in Africa, said the report. There, one in five people faced hunger last year.

Overall, a higher portion of people are undernourished today than 10 years ago, according to UN estimates. This leaves the world on course to have a projected 582mn people chronically undernourished by the end of the decade.

Shock events, such as the Covid-19 pandemic and Russia’s invasion of Ukraine, have helped to drive up food insecurity. Before the pandemic struck, the projection for 2030 was for 451.8mn people to be undernourished.

However, UN officials believe the goal of zero hunger by 2030 could have been achieved with more funding from donor governments and better co-ordination.

“Not only the donors, but our agencies should feel ashamed because it’s not only the money, it’s also how we implement it,” said Maximo Torero, chief economist at the UN’s Food and Agriculture Organization. “There is a co-ordination failure. There is a lot of inefficiencies in the way the resources are being used.”

Often foreign aid focuses on emergency assistance, but more funds need to go to agriculture — “the root causes” of food insecurity, said Lario. “In five years, unless we invest now, we’ll be in the same situation,” he said. 

In particular, small-scale farmers in poor countries need more financing to adapt to climate change.  

“Why today [does] only 3 per cent of climate financing goes to agriculture and agri food systems?” said Torero. At successive COP climate conferences, agriculture has been portrayed as “the bad sector”, he said. “They forget the fact that agriculture is the one that provides food to people.”

PARIS — Tennis star Coco Gauff will be the female flag bearer for the United States at this week’s Olympic opening ceremony in Paris, the U.S. Olympic and Paralympic Committee announced Wednesday.

In Friday’s opening events, in which hundreds of U.S. athletes will appear on a boat as part of a procession down the River Seine through the heart of Paris, the 20-year-old Gauff will join basketball great LeBron James in carrying the American flag. Both Gauff and James were chosen by a vote of their fellow competitors on Team USA.

Gauff will be the youngest ever U.S. flag bearer at an Olympic opening ceremony. (The gymnast Simone Biles carried the U.S. flag at the 2016 closing ceremony in Rio de Janeiro when she was 19 years old.) Gauff will also be the first tennis player to hold the honor.

“I never thought in a million years I would have the honor of carrying the American flag for Team USA in the Opening Ceremony,” Gauff said. “I could not be more proud to lead my teammates with LeBron as we showcase our dedication and passion on the biggest stage there is – at a moment where we can bring athletes and fans together from around the world.”

Gauff is currently ranked by the Women’s Tennis Association as the world’s second-ranked female player. She won the U.S. Open in 2023, her first Grand Slam title.

This year marks Gauff’s first Olympic appearance after she was forced to withdraw from the Tokyo Olympics in 2021 when she tested positive for COVID-19.

In this summer’s Olympics, tennis will be held at Roland-Garros, the same legendary venue that hosts the French Open each year. Last month, Gauff reached the semifinal of that tournament, where she lost to No. 1-ranked Iga Swiatek, the Polish player who is the top seed — and gold medal favorite — in the Olympic singles event.