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Customers shop at a GUCCI luxury store in Shanghai, China.
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dry The company said it expects to return to growth this year despite reporting another quarterly sales decline on Tuesday, with its biggest sales driver Gucci continuing to lag in the first quarter under new Chief Executive Luca de Meo.
The company also owns Yves Saint Laurent, Bottega Veneta and Balenciaga brands. Indicates fourth quarter sales According to FactSet estimates, it fell 3% year-on-year to 3.9 billion euros ($4.64 billion), slightly higher than expected.
Its flagship brand Gucci fell 10% year-on-year this quarter, which was also slightly better than market expectations, while other brands experienced flat or moderate growth year-on-year.
“2025 is not the year we wanted,” Chief Executive Luca de Meo said on an earnings call. “It does not reflect Kering’s full potential and we all know that.”
Sales in 2025 will fall by 10% to 14.7 billion euros. Due to weak sales, recurring operating income fell 33% from last year, and operating margin also fell to 11.1%.
The stock rose as much as 14% at one point and 11% last time, but has fallen nearly 14% so far this year.
Positive sentiment spread to the wider luxury sector, making BurberryUp 3.4% in early trading, Hermeslast up 3%, with Italy’s Brunello Cucinelli up 2.7%.
Shares in French luxury goods group LVMH rose 1.4%, while Swiss Richemont Group up 2%.
Kering share price so far this year
Kering Group, like its peers LVMH Like other fashion companies, its business has suffered in the past few years after a surge in demand during Covid-19 led to higher prices and alienated customers. match Weak consumer demand in China – Once one of the industry’s main growth drivers, the fortunes of Kering and other companies have declined due to strategic missteps.
appointment Demna appointed Gucci artistic director Designed to help sales and get the company’s reputation back on track. His first collection, “La Famiglia,” was launched last year.
Markets are now eagerly waiting for de Meo’s attempts to turn around Kering to begin to bear fruit. DeMeo unexpectedly named the company’s first outside CEO last year. DeMeo was poached from the auto industry, and his experience includes turning around struggling automakers Renault at the beginning of this century.
The beginning of a turnaround?
“Luca Solca, an analyst at Bernstein, said: “These results point to an overall improvement in Kering’s brand portfolio and activity. Whether this is the harbinger of a turnaround that allows brands such as Gucci to grow in fiscal 2026 in line with current consensus expectations will be key to the investment case argument.”
Kering said it expected to “return to growth and improve margins” in 2026, without giving further details about its prospects. Long-term plans and guidance are expected to be presented at the company’s Capital Markets Day in April.
“I can assure you that since the second half of this year, we have been acting decisively to get the group back on the right track,” de Meo said, adding that the group was still “far away” from where they wanted to be.
One of De Meo’s actions was to deleverage the company’s balance sheet and to sell its beauty business to L’Oreal 4 billion euros It is trying to resolve the group’s high net debt and focus on its core fashion business.
“Our goal is clear, to reignite demand and prepare for the next cycle of growth, factory by factory, product by product, customer by customer,” DeMeo said.
The new CEO also noted that Kering is preparing to enter health and longevity, “an area we want to be involved in and that we know will create value and growth,” adding that the company’s jewelry strategy will be further announced in April.
Jefferies analyst James Grzinic noted: “[Kinging’s]final stretch in 2025 confirms that pressure will gradually ease amid more favorable industry conditions.” Investors will be eager to hear more of De Meo’s first impressions, “with huge cost savings potential, which is an inevitable area of focus,” the analyst added.
