Kering returns to organic growth but Gucci remains in decline

Kering recorded its first organic sales growth in three years, with revenues up 2% on a comparable basis in the second quarter to €3.65 billion (£3.12 billion), building on a stable first quarter. 

Summary of results: 

• Kering’s first-half revenue reached €7.22 billion (£6.18 billion), up 1% on a comparable basis, following 2% growth in the second quarter.
• Gucci’s second-quarter comparable sales fell 2%, improving from an 8% decline in the first quarter.
• Recurring operating margin rose 40 basis points to 12.8%, while asset sales and cash generation helped reduce net debt to €3.3 billion (£3.12 billion).

While Gucci remained in decline, stronger retail trends helped the Paris-based luxury group return to growth while store closures, cost controls and asset disposals supported profitability and a sharp reduction in net debt.

First-half revenue for Kering rose 1% organically to €7.22 billion, and fell 3% on a reported basis. Directly operated retail sales were flat during the six months, while wholesale and other revenue increased 5%.

The group noted that the situation in the Middle East "remained challenging" during Q2, with a 1 percentage point reduction in revenue growth, although retail trends improved sequentially. 

Kering noted that Saint Laurent, Bottega Veneta and Brioni continued to improve sequentially, with performance accelerating versus the first quarter. A recent leadership shake-up has seen Romain Spitzer appointed as Chief Executive Officer of Bottega Veneta earlier this month.

Balenciaga faced a more challenging quarter, according to its parent company, as the House "continued to work through its creative transition and to restore balance across its business, with leather goods remaining a source of strength." 

Kering also noted that McQueen has accelerated the execution of initiatives aimed at "repositioning the brand as a British authority in tailoring and occasion wear", while it continues to rightsize its distribution network under its new CEO, Gianfranco D'Attis. 

McQueen, which has been undergoing a global strategic restructure to restore profitability, has seen its flagship store relocated to 27 Old Bond Street, while it has also been announcing layoffs in both its Italian operations and London headquarters. 

Gucci’s retail decline narrows

Gucci’s second-quarter revenue declined 2% on a comparable basis to €1.41 billion (£1.21 billion), against an 8% fall during the first quarter. 

Revenue from Gucci’s directly operated stores fell 2% to €1.28 billion (£1.10 billion), an improvement of seven percentage points from the previous quarter. Wholesale and other revenue increased 5% to €135 million (£116 million).

North America was the brand’s main growth driver, while sales in Western Europe and Asia-Pacific began to recover. Mainland China remained difficult, despite an improvement during the quarter. Kering said the Borsetto and Paparazzo product lines supported demand, alongside attention generated by the Gucci Core show in New York.

For the first half, Gucci’s comparable revenue fell 5% to €2.76 billion (£2.36 billion). Recurring operating income reached €468 million (£401 million), while its recurring operating margin increased by one percentage point to 17%.

Margins improve as store network contracts

For the first half, Kering posted recurring operating income of €921 million (£789 million), with a recurring operating margin of 12.8%, up 40 basis points higher year-on-year. Net income attributable to the group came in at €189 million (£162 million).

The group completed 84 net store closures during the half of the year, following 75 closures in 2025. It is targeting 100 net closures across 2026.

Net debt fell from €8 billion (£6.85 billion) at the end of 2025 to €3.3 billion (£2.82 billion) as of 30 June. The reduction included proceeds from Kering Beauté’s sale to L’Oréal and a Milan property transaction.

CEO Luca de Meo commented on the latest results: "Kering delivered improved performance in the second quarter, with revenue returning to growth. Across the Group, we are seeing early signs of progress in brand desirability, commercial momentum and operating performance.

"These first-half results demonstrate the positive impact of the decisive measures we have taken to reinforce the distinctiveness of our brands, simplify our organization and increase effectiveness across the Group. 

"While the market environment remains demanding, we are focused on delivering our roadmap with discipline and consistency, creating the foundations for sustainable growth and long-term value creation."

The results follow the April launch of ReconKering, the group’s plan to improve brand desirability, execution and operating efficiency.