Gucci-owner Kering beats on sales as new CEO maps revival
Customers shop at a GUCCI luxury store in Shanghai, China.
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Kering It said on Tuesday it expects a return to growth this year despite posting another quarter of decline in sales, with new CEO Luca de Meo continuing to hold the reins in the first quarter of Gucci, its biggest sales driver.
The company also owns the Yves Saint Laurent, Bottega Veneta and Balenciaga brands. fourth quarter sales said It fell 3% on a comparable basis to 3.9 billion euros ($4.64 billion), a slight increase according to FactSet estimates.
Flagship brand Gucci reported a 10% decline on a comparable basis in the quarter; This is slightly better than consensus, while other brands posted flat or moderate year-on-year growth.
“2025 was not the year we wanted,” CEO Luca de Meo said on the earnings call. “This did not reflect Kering’s full potential and we all know it.”
In 2025, sales fell by 10% to 14.7 billion euros. Continuing operating income was down 33% from last year; As a result of weak sales, operating margin also fell to 11.1% in the same period.
Shares rose as much as 14 percent and were last up 11 percent, but the stock is down nearly 14 percent so far this year.
The positive sentiment spread to the wider luxury sphere and was capitalized on. burberryGaining 3.4% in early trading hermesThe latest increase was 3%, with Italy’s Brunello Cucinelli gaining 2.7%.
Shares of French luxury holding company LVMH increased by 1.4 percent, while Swiss shares increased by 1.4 percent. richemont It gained 2%.
Kering shares its shares since the beginning of the year
Kering, like its peer LVMH and other fashion players have seen their businesses suffer over the past few years following a boom in demand during Covid-19, which led to price increases that alienated customers. Weak consumer demand from China, formerly one of the industry’s main growth drivers, combined with strategic missteps, has eroded the fortunes of Kering and others.
appointment Demna will be the artistic director of Gucci It is designed to help sales and get the company’s reputation back on track. His first collection “La Famiglia” was released last year.
The market is now eagerly awaiting signs that De Meo’s attempts to turn Kering around, whose surprise appointment last year became the company’s first outsider CEO, are beginning to bear fruit. De Meo was hired from the auto industry, and his experience included turning around the struggling automaker. Renault at the beginning of the decade.
Is it the beginning of a transformation?
“Bernstein analyst Luca Solca said: “These results indicate a slight improvement across Kering’s brand portfolio and operations.” “Whether this could herald a turning point, as the consensus currently predicts, driving brands like Gucci to grow in FY26E, will be the key debate for the investment case.”
Kering said it sees a “return to growth and margin recovery” in 2026 but did not provide further details on the outlook. The company is expected to present a longer-term plan and guidance at Capital Markets Day in April.
“Since the second half of the year, I can assure you that we have been taking decisive action to get the group back on the right track,” De Meo said, adding that the group was still “far” from where they wanted to be.
One of De Meo’s actions was to reduce the company’s balance sheet and sells beauty segment L’Oréal for 4 billion euros, with the aim of tackling the group’s high net debt and focusing on its core fashion business.
“Our goal is to reinvigorate open, desirability and prepare for the next cycle of growth, from home to home, from product to product, from customer to customer,” De Meo said.
The new CEO also noted that Kering is preparing to enter the wellness and longevity segment, “an area where we want to play and where we know value and growth will be created,” adding that the company’s jewelry strategy will be further announced in April.
“[Kering’s] Jefferies analyst James Grzinic noted that the closing stages of 2025 confirm pressures are gradually easing at a time when industry conditions are more supportive. Investors will be eager to hear more from De Meo’s first impressions, the analyst added, with “significant cost savings potential and an inevitable area of focus.”
