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Shares in Kering rose more than 15 per cent after sales at the Gucci owner fell less than feared amid fresh restructuring efforts under new chief executive Luca de Meo.
Revenues at the Paris-listed luxury group fell 3 per cent on a comparable basis in the fourth quarter from a year earlier, to €3.91bn. Consensus expectations were for a 6 per cent drop according to Visible Alpha.
Shares rose 16 per cent in early trading on Tuesday, sparking a broader rally in the European luxury goods sector. Hermes rose 2.7 per cent and LVMH gained 1.3 per cent.
Revenues at Gucci, Kering’s largest brand by sales and profits, fell 10 per cent in the period to €1.62bn, slightly ahead of a consensus forecast of a 12 per cent decline from a year earlier.
The owner of Saint Laurent and Balenciaga proposed cutting its dividend to €4 per share — including a €1 special dividend linked to a beauty deal — down from €6 a year earlier, amid ongoing weak financial performance.
“The performance in 2025 does not reflect the group’s true potential. In the second half, we took decisive actions — strengthening the balance sheet, tightening costs, and making strategic choices that lay the foundations for our next chapter,” said de Meo, who joined from carmaker Renault in September with a mandate to turn around the business after years of underperforming the sector.
He promised “a leaner, faster Kering, enhancing brand positioning and sales, rebuilding margins, and strengthening cash generation” in 2026.
“We are already seeing some signs that Gucci is rebounding from its lowest point,” de Meo told analysts on Tuesday.
Kering’s shares have fallen 57 per cent over the past three years as management and creative changes, large-scale retail expansion, a stalled turnaround at Gucci and mounting debt following high-priced acquisitions worried investors. Shares have risen since the appointment of de Meo, who took over from François-Henri Pinault whose family controls the group and who remains as chair.
De Meo has already made changes, including selling the group’s nascent beauty division to L’Oréal for €4bn and postponing by two years an agreement to buy the rest of Valentino. Kering at present has a 30 per cent stake in the Italian fashion brand. De Meo is expected to lay out his full strategic plan at a capital markets day in April.
The smaller than expected revenue fall in the final quarter was not enough to offset Kering’s weakness in earlier quarters. Operating income for the year fell 33 per cent to €1.6bn, in line with expectations, the second consecutive year that group profits have fallen by a double-digit percentage.
Group revenues for the year were down 10 per cent to €14.67bn, also in line with Visible Alpha consensus. However, net debt totalled €8bn by the end of the year, down €2.5bn on the end of 2024.
Kering’s turnaround attempts are taking place in a depressed global market for luxury goods, though signals from some rivals have raised hopes that the worst of the slowdown may have passed. The group said its objective for 2026 was “to return to growth and improve margins this year” despite the tough economic environment.
“Kering has a relatively successful track record turning around several key brands over the past two decades . . . That said, execution of luxury brand turnarounds has become more complex, lengthy, costly,” wrote Thomas Chauvet, analyst at Citi.
Kering noted that while fourth-quarter sales in western Europe and North America were in line with trends in the previous quarter, they improved in all other regions, while the debut collection from Gucci’s newest designer appeared to be gaining popularity.
The group’s smaller brands showed some improvement from previous quarters. Sales at Saint Laurent were flat in the fourth quarter compared with a year ago, but Bottega Veneta and other brands including Balenciaga grew by single digits.
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