kering said it expected a return to growth this year, despite Gucci, its biggest sales driver, recording another quarterly sales decline on Tuesday as it continued to lag in the first quarter under new CEO Luca de Meo.

The company, which also owns the Yves Saint Laurent, Bottega Veneta and Balenciaga brands, Sales for the fourth quarter were On a comparable basis, sales fell slightly by 3% to 3.9 billion euros ($4.64 billion), according to FactSet estimates.

Its flagship brand Gucci recorded a 10% decline on a comparable basis in the quarter, also slightly above consensus, while other brands recorded flat or modest growth year over year.

“2025 was not the year we had hoped for,” CEO Luca de Meo said at an earnings conference. “This was not a reflection of Kering’s full potential. We all know that.”

Sales in 2025 decreased by 10% to 14.7 billion euros. Ordinary operating income decreased by 33% compared to the same period last year, and the operating profit margin also fell to 11.1% due to sluggish sales.

The stock soared as much as 14%, last seen rising 11%, but is down nearly 14% so far this year.

The positive sentiment spilled over into the wider luxury space and brought benefits. burberryup 3.4% in early trading, hermeslast seen increasing by 3%, while Italy’s Brunello Cucinelli increased by 2.7%.
Shares in French luxury conglomerate LVMH rose 1.4%, while shares in Switzerland rose 1.4%. Richemont Increased by 2%.

So is Kering LVMH Fashion-related companies such as Yahoo! Co., Ltd. have suffered a deterioration in performance over the past few years due to a surge in demand due to the coronavirus disease (Covid-19) and soaring prices that are causing customers to turn away. pairing with Chinese consumption demand is weak Once one of the sector’s main growth drivers, strategic mistakes led to the decline of Kering and other companies.

appointment of Demna appointed artistic director of Gucci It’s meant to help with sales and get your company’s reputation back on track. His first collection “La Famiglia” was launched last year.

The market is now waiting for signs that Mr. DeMeo’s efforts to turn Kering around (he was suddenly appointed as the company’s first outside CEO last year) are beginning to bear fruit. Mr. DeMeo was hired by the automobile industry and gained experience including turning around an ailing automaker. renault At the beginning of the decade.

”“These results indicate a slight improvement in Kering’s overall brand portfolio and activity,” Bernstein analyst Luca Sorca said. “Whether this heralds a turnaround and whether it will drive brands like Gucci to growth in 2H26, as the consensus currently predicts, will be a key investment case discussion.”

Kering said it expected a “return to growth and improved margins” in 2026, but did not provide further details about its outlook. The company plans to announce long-term plans and guidance at its Capital Markets Day in April.

“Since the second half of this year, we have taken decisive action to put the group back on the right track,” DeMeo said, adding that the group was still “far from” where it wanted to be.

One of Mr. DeMeo’s actions is to deleverage the company’s balance sheet, sell the beauty department to loreal 4 billion euros The aim is to address the group’s high net debt and focus on its core fashion business.

“Our goal is clear: to reignite demand and prepare for the next cycle of growth, home by home, product by product and client by client,” DeMeo said.

The new CEO also noted that Kering is preparing to enter the wellness and longevity space, “an area that we want to be in and where we know there will be value and growth,” adding that the company’s jewelery strategy will be further announced in April.

”[Kering’s] “The end of 2025 confirms a gradual easing of pressure as industry conditions become more supportive,” said Jefferies analyst James Gruzinich. Investors will want to hear more from DeMeo’s initial impressions. “There is potential for significant cost savings and this is a logical area of ​​focus,” the analyst added.