Kering hit by Gucci slowdown as group posts double-digit revenue decline

Kering has reported a year of declining revenues and profits in 2025 but says "decisive action" taken in the second half has laid the groundwork for a return to growth and margin improvement this year.

The luxury group posted revenue of €14.7 billion (£12.82 billion), down 13% as reported and 10% on a comparable basis, as demand remained uneven across regions and brands. Fourth-quarter revenues declined 9% as reported and 3% on a comparable basis.

Operating income fell 33% to €1.63 billion (£1.42 billion), with the group’s operating margin declining to 11.1%, compared with 14.5% a year earlier. Net income came in at €532 million (£463 million).

Chief Executive Officer, Luca de Meo, who took up the role in September 2025, said: "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.

"On April 16, during our Capital Markets Day, we will present a clear roadmap to boost the desirability of our Luxury Houses and reignite growth, with well-defined brand strategies, a more effective organisation, and strong financial discipline. As we enter 2026, the entire team is fully committed to delivering a leaner, faster Kering, enhancing brand positioning and sales, rebuilding margins, and strengthening cash generation to ensure sustainable, long-term value creation."

Gucci continued to weigh heavily on group performance. The flagship brand saw revenues fall 22% to €6 billion (£5.23 billion), with retail sales down 18% and wholesale revenue declining 34% on a comparable basis.

At Yves Saint Laurent, revenue declined 6% on a comparable basis to €2.6 billion (£2.27 billion).

Bottega Veneta was a standout performer, delivering 3% comparable revenue growth to €1.7 billion  (£1.48 billion) and achieving its highest-ever fourth-quarter sales.

Revenue from Other Houses, including Balenciaga, Alexander McQueen and Kering’s jewellery brands, fell 6% on a comparable basis. Jewellery continued to perform strongly, with Boucheron delivering double-digit growth.

Kering Eyewear remained resilient, posting 3% comparable growth to €1.6 billion (£1.4 billion).

Following the strategic partnership agreed with L’Oréal, Kering Beauté has been reclassified as a discontinued operation, with the transaction expected to close in the first half of 2026.

Looking ahead, Kering said it is targeting a return to growth and margin improvement in 2026, despite ongoing macroeconomic uncertainty.