People walk past the Gucci store on Fifth Avenue in New York City, March 20. AFP-Yonhap

Shares of Gucci owner Kering tumbled Wednesday after the French luxury giant issued a profit warning following slumping sales at its flagship brand.

Kering shares sank by as much as 9.4 percent to 316.75 euros ($338.52) in morning deals on the Paris stock exchange, hitting its lowest level since October 2017, before paring down some losses.

The group's stock price has dropped by 60 percent compared to its all-time high reached in June 2021.

Kering said Tuesday that its sales fell by 11 percent in the first quarter, citing tough market conditions, particularly in China, a major consumer of luxury goods.

The company warned that it expects its operating income to fall by between 40 to 45 percent in the first half of the year.

In February, chief executive Francois-Henri Pinault vowed to press on with a strategy to put Gucci "back on track" after Kering announced a 17-percent fall in net profits in 2023.

A photo taken on June 18, 2013, shows the new name and logo of French luxury and retail group PPR , Kering, at an annual general meeting of the group in Paris during which shareholders agreed the group start a new life as a luxury and sports brands group by renaming itself Kering. AFP-Yonhap

Kering has scrambled to turn things around at Gucci, which accounts for half of the sales at the group, whose other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta.

The company changed Gucci's top management last year, appointing Kering's deputy CEO Jean-Francois Palus to replace chief executive Marco Bizzarri, who had led the fashion house since 2015.

Sabato de Sarno succeeded Alessandro Michele as the brand's creative director in January 2023.

Earlier this month, Gucci recruited a vice president from rival Louis Vuitton, Stefano Cantino, to be deputy to Palus to aid him in transforming the brand.

Luca Solca, luxury sector analyst at Bernstein research firm, said Kering's first-quarter report "was case-in-point that the Gucci transformation is a more difficult journey than the market assumed."

In Tuesday's earnings statement, Pinault said Kering's performance "worsened considerably" in the first quarter.

"While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline," he said. (AFP)