The luxury industry is no longer a calm water, and Kering has become its most nervous barometer. Annual sales fell 13 percent, profitability is under pressure and the main Gucci brand is still undergoing restructuring.
The French group has completed the 2025 financial year, which management described as a transition year. However, investors see this primarily as a full-scale stress test. Because behind the keywords “desirability” and “selectivity” one question dominates: has the bottom finally been reached?
Sales fall more slowly, but do not recover
Kering reported on Tuesday consolidated sales of 14.7 billion euros for 2025. This represents a decline of 13 percent on a reported basis and ten percent on a comparable basis.
The fourth quarter shows a slowing of the decline to -3 percent on a like-for-like basis. This is an encouraging signal after several quarters of downturn, but is not enough to speak of a real trend reversal.
The company’s own retail sector continues to suffer. At the same time, wholesale sales are declining due to more consciously controlled distribution.
The real indicator: the margin
The pressure is particularly evident in profitability, the true yardstick for the markets. The operating result adjusted for special effects fell by 33 percent to 1.6 billion euros last year. The margin was 11.1 percent, moving dangerously away from the group’s historical standards.
The mechanism is well known: when volumes fall, the luxury model loses its valuable economies of scale. Even the “strict cost control” mentioned by CEO François-Henri Pinault is no longer enough to compensate for the erosion of sales. The adjusted net result was almost halved and shrank to 532 million euros.
Gucci: focus and risk zone
With around 40 percent of sales, Gucci remains the most important indicator. In 2025, the fashion house suffered a 19 percent decline in sales on a like-for-like basis. The fourth quarter shows an improvement. The first new lines limited the loss to ten percent on a comparable basis. However, recovery continues to be gradual.
The impact on profitability is serious. The brand’s operating profit fell by 40 percent and the margin fell to 16.1 percent.
This has clear consequences for the markets: Without a clear restart at Gucci, there will be no revaluation of the stock on the stock market.
The resilient areas
It’s not all bleak. Yves Saint Laurent limited the damage and returned to welcome stability at the end of the financial year. The fashion house was able to maintain a margin of almost 20 percent thanks to solid operational discipline.
For its part, the Bottega Veneta brand confirmed the relevance of its ultra-luxury strategy. It reported growth, strong momentum in the fourth quarter and improved profitability. These results prevented the group’s overall balance sheet from slipping completely into the red. However, they cannot offset Gucci’s systemic weight.
Financial breathing space through strategic decisions
Kering pointed to a strengthened balance sheet and controlled debt. However, this improvement largely comes from active asset management, including strategic real estate sales. The balance sheet now offers significantly greater “strategic flexibility,” but organic business dynamics remain the primary construction site for 2026.
The signal to shareholders is unmistakable. The group has decided to propose an ordinary dividend of three euros, supplemented by an additional special distribution of one euro. With this, Kering reminds us that despite the turbulence, the group remains in control of its cash and has full confidence in its recovery.
April 16: The moment of truth
All attention is now focused on Capital Markets Day on April 16th. It will be a moment when ambitions become both concrete and symbolic. With organizational reforms, speed of execution and creative vision, CEO Luca de Meo must prove that Kering can become a growth machine again and is no longer a group that is merely managing its retreat.
The time for diagnoses is over. Now it comes down to facts.
Conclusion
After long relying on the strength of its leading Gucci brand, Kering now faces a harsher reality: navigating transformation while the engine slows down.
There are signs of stabilization. But in 2026 the group will no longer be judged on its ability to explain the decline. He is expected to demonstrate the ability to recreate desire – quickly, clearly and sustainably.
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