Kering’s Gucci Faces 46% Profit Plunge Before New CEO Takes Office
Kering’s profit plunge, Gucci’s sales slump, new CEO on the horizon
Group earnings slide 46 % in the first half
Full‑year net profit fell to 474 million euros, from 878 million last year, as revenue dropped 16 % to 7.6 billion euros.
Francois‑Henri Pinault, who remains board chairman, said the company has laid a “healthy foundation” for future growth.
Gucci’s sales slump and operating loss double
Gucci’s first‑half revenue fell 26 % to 3.03 billion euros, while operating profit dropped 52 % to 486 million euros.
The Italian fashion house accounted for 44 % of Kering’s sales and roughly two‑thirds of its operating profit.
Brand performance overview
- Yves Saint Laurent – sales fell 11 % to 1.29 billion euros.
- Bottega Veneta – sales rose 1 % to 846 million euros.
- Valentino acquisition – Kering bought a 30 % stake.
- Creed beauty brand – purchased to diversify portfolios.
Debt load and real‑estate strategy
Kering’s debt stood at 9.5 billion euros at the end of June, a result of recent acquisitions and store openings in Paris, Milan and other pricey cities.
Analysts at Bernstein urged the company to sell real‑estate assets “below the purchase cost” as a necessary, though bitter, solution.
New CEO Luca de Meo yet to take the reins
In June, Kering announced it had appointed Luca de Meo, former head of Renault, as chief executive. He will lead a turnaround effort alongside Pinault.
De Meo is expected to take office on 15 September, leaving investors to wait for a full‑year strategy that will be presented in February 2026.
External factors weighing on luxury brands
Global luxury groups have been hit by a slowdown in Chinese demand and by US President Donald Trump’s tariff barrage, which could reduce North American sales that represent a quarter of Kering’s revenue.
Analysts’ short‑term outlook
- HSBC analysts note that earnings will remain under pressure in the short term.
- De Meo will not present his strategic plan until the publication of full‑year results in February 2026.
Kering is stepping up initiatives to support growth while implementing efficiency measures and maintaining financial discipline.
