* Gucci Q1 sales 1.35 billion euros, slightly below

forecasts

* Middle East conflict shaves off 1% from Kering sales in

the quarter

* Kering CEO de Meo due to unveil strategic plan on

Thursday

By Tassilo Hummel

PARIS, April 14 (Reuters) - Sales at Kering's

Italian flagship brand Gucci dropped by 8% in the first quarter

from the previous year, the luxury fashion group said on

Tuesday, as the Iran war hurt spending by Middle East shoppers

and curtailed international travel.

Retail revenues in the Middle East declined by 11% in the

quarter, the French group said in a statement, despite growth in

the first two months of the year before the war started on

February 28.

The conflict shaved off 3% of overall Kering sales in March,

or 1% on the quarter as a whole, with a similar effect at Gucci,

said finance chief Armelle Poulou.

This was in line with comments made by Kering's larger rival

LVMH late on Monday, dragging down its shares on

Tuesday.

FOCUS ON DE MEO'S STRATEGIC PLAN

Gucci's 1.35 billion euro ($1.59 billion) sales from January

to March were slightly below analyst forecasts, with the fall

marking the 11th straight quarterly decline. An analyst

consensus by provider Visible Alpha projected revenue around

1.37 billion euros.

The result, days before Kering CEO Luca de Meo is due to unveil

his strategic plan to turn around the 33-billion-euro ($39

billion) group's fortunes, serves as a reminder of the steep

challenge ahead for the storied fashion house and its

controlling shareholder, the Pinault family.

Kering called the quarterly outcome a "first step" in its

recovery.

Investors are pinning hopes on de Meo's ability to find a

recipe for success amid a jittery market and rapidly shifting

trends. The company confirmed it was still aiming to bring Gucci

back to full-year growth this year, with most analysts

predicting the turning point in the third quarter.

Kering's shares are down about 8% this year.

Once the group's profit engine, Gucci's first-quarter sales

have halved from their 2023 level as years of aggressive price

hikes, shifting aesthetics and managerial churn have alienated

parts of its customer base.

LUXURY GOODS DEMAND STILL WEAK IN CHINA

Kering group sales, including other smaller brands like Yves

Saint Laurent and jeweller Boucheron, were flat year-on-year

when adjusted for currency swings, above an analyst expectation

of a 5.8% decline, helped by strong jewellery and eyewear sales.

The first styles from Georgian fashion designer Demna, who

joined Gucci from sister brand Balenciaga last year, have

entered stores in recent months, with hopes that those can start

to boost its sales.

The brand saw some improvement in key market China, though

luxury goods sales still declined from the previous year, Poulou

said.

"In China, we have an environment which isn't helping, but

we also have some of our own difficulties on which we are

working," Poulou said, adding the group needs to boost store

traffic and improve its marketing to resonate better with local

consumers.

Trends in the United States accelerated, she said.

De Meo, who took the reins last September, has moved fast to

shore up Kering's balance sheet through asset sales, deepened an

alliance with cosmetics giant L'Oreal and looked to

untangle the group's once unwieldy governance structure.

Investor focus is now shifting to whether there are tangible

signs that Gucci's revival is on track after de Meo called last

quarter's 10% sales drop a possible turning point in a fragile

recovery.

($1 = 0.8472 euros)