Kering Q3 revenue flat at €3.35 billion as Gucci sales slip 6%

Kering's revenue for the three months to 30 September held flat at reported exchange rates, totalling €3.35 billion. In comparable terms the French group recorded a 1 percent decline, which still landed ahead of the consensus forecast for a 1.3 percent organic sales drop.

Gucci, the group's flagship and its main profit engine, missed expectations. Sales at the Florence-founded house fell 6 percent at constant exchange rates, worse than the 5.4 percent decline analysts had pencilled in. That followed a smaller 2 percent drop in the second quarter.

The second quarter had marked a milestone for the Italian brand: its first comparable sales increase in three years. Chief executive Luca de Meo cautioned at the time that the recovery would not follow a straight line, flagging that the third quarter could come in flat on tougher comparisons with 2025.

Kering, based in France, owns Saint Laurent, Balenciaga, Boucheron and Bottega Veneta alongside Gucci, spanning fashion, leather goods, jewellery and watches. The group no longer breaks out individual results for its other fashion houses, reporting the division as one line.

"Third-quarter revenue reflects the phasing we anticipated, in a softer macroeconomic environment," de Meo said in a statement released after Thursday's market close. "The recovery of Gucci remains our defining priority." He pointed to steady strengthening of desirability and product development progressing at pace.

"The transformation of Kering is a multiseason undertaking, but the improvements we are seeing across the group, notably in desirability and key operating indicators, reinforce our confidence in the direction we have set and the determination of our teams to deliver it," de Meo added.

What drove the miss

Kering said Gucci's quarter showed a weaker lift from newness than the second quarter, when creative director Demna's first designs reached more stores. The lift from those collections was strong then and weaker now.

"While traffic remained the main constraint, conversion, average price and average ticket improved further, supported by the progressive rollout of new collections," the company said. The shape of the turnaround is fewer shoppers coming in, with those who do spending more.

Across the group, fashion and leather goods sales fell 3 percent in comparable terms. By comparison, organic sales at LVMH's fashion and leather goods unit fell 5 percent year over year, dragged down by a sharp slowdown in demand in China, while Kering's corporate and other division fell 5 percent.

Elsewhere in the portfolio the picture brightened. Kering's jewellery division grew 11 percent in comparable terms, the strongest line in the results, while eyewear rose 4 percent.

The figures followed Hermès, which reported third-quarter sales up 4.3 percent at constant exchange rates earlier on Thursday, its weakest quarterly growth rate in six years. Both sets of numbers point to a sector wrestling with softer demand in China.

Creative changes compound the turnaround

The financial headwinds arrive during a reshuffle of creative leadership. After bolstering the management of its fashion business, Kering has seen Anthony Vaccarello depart Saint Laurent and Seán McGirr leave Alexander McQueen, and it has yet to name replacements for either role.

We reported on Vaccarello's exit after a decade reshaping Saint Laurent, with Chloé's Chemena Kamali tipped to succeed him. Kering's turnaround now has two fronts to manage at once: the Gucci recovery and two creative chairs without occupants.

Kering confirmed its objective of improving its recurring operating margin in 2026, supported by efficiency measures already under way, while maintaining strong investment in the desirability of its houses. Full-year guidance was maintained despite the softer quarter and what it called a more challenging macroeconomic environment.

Kering took a different route on leadership from its rivals: François-Henri Pinault handed daily management to an outside chief executive, leaving the family to provide financial stewardship through Artemis. De Meo is that outsider, and the quarter is his to explain.

Gucci was among retailers' top picks from Milan's spring 2027 shows, when we covered buyers' favourites alongside Prada. That reception has yet to turn into store traffic, which the group identified as the binding constraint.

What comes next rests on two tracks. The group has kept its annual margin guidance intact, and the vacant creative director posts at Saint Laurent and Alexander McQueen still await appointments, with no names announced by the company.

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Images: Kering