Kering Targets Return to Growth as Push to Get Gucci Back in Fashion Continues -- Update

By Andrea Figueras

Kering reported better sales trends for the fourth quarter and said it aims to return to growth in 2026 after years of decline, as the Gucci owner pushes ahead with a revamp plan to draw shoppers back to its boutiques.

The Paris-based luxury giant is looking to turn around the fortunes of its core Gucci brand while recently appointed Chief Executive Luca de Meo designs a comeback plan for the broader group, which, like many of its rivals, is contending with a downturn in spending.

Kering booked sales of 3.905 billion euros ($4.65 billion) for the fourth quarter, a key shopping period including Black Friday and Christmas, it said Tuesday. While the result represented a decrease of 9% in reported terms compared with the same period of 2024, it marked an improvement from the previous quarter, when it logged a 10% sales decline. On a comparable basis, sales fell 3% on year in the fourth quarter.

The mainstay Gucci brand posted fourth-quarter sales of 1.62 billion euros, down 16% on year and compared with analysts' estimates of 1.61 billion euros, according to FactSet data. In the previous three months, the label's sales fell 18%.

For this year, the company, whose stable of brands also includes the likes of Yves Saint Laurent, Balenciaga and Bottega Veneta, expects to return to growth and improve margins. Kering has reported annual sales declines for three years in a row.

At its capital markets day, scheduled for April 16, the company will present in detail the roadmap for its next phase of transformation, it said.

"The performance in 2025 does not reflect the group's true potential," de Meo said Tuesday.

Kering's results come after industry bellwether LVMH, the owner of Louis Vuitton and Dior, recorded sluggish sales growth for last year's final quarter, spurring continued investor caution about the sector.

After a period of slowing demand for high-end goods, the luxury industry is hopeful that upward trends among Chinese consumers, as well as renewed creative teams, will help it claw back some ground.

But Kering's case has been particularly difficult. Gucci, the group's key brand, is undergoing a prolonged revamp plan under new leadership in the C-suite and in the design team. The brand relied on seasonal designs and less-wealthy shoppers, who reduced their luxury budget amid inflation and high interest rates.

Market conditions remain challenging amid geopolitical turmoil that has clouded demand for high-end goods. Creaking consumer confidence in the U.S., a vital market for luxury, is an added headwind to the sector's struggling recovery.

Net profit for the full year fell sharply to 72 million euros from 1.13 billion euros. When excluding discontinued operations, the group swung to a net loss of 29 million euros compared with a profit of 1.025 billion euros a year before.

Recurring operating profit in 2025 slid to 1.63 billion euros from 2.44 billion euros it made in the prior year.

Kering proposed an ordinary dividend of 3 euros a share and an exceptional dividend of 1 euro a share, linked to the sale of Kering Beaute to L'Oreal.

Write to Andrea Figueras at [e-mail]

(END) Dow Jones Newswires

02-10-26 0324ET