Kering returns to organic sales growth, but Gucci still lags

Kering reported second-quarter sales up 2% on an organic basis, marking the group's first quarter of positive growth in three years after a prolonged slump driven largely by weakness at Gucci. The rebound was powered by jewellery and eyewear, with those categories posting growth in the high single digits and high teens respectively, giving the group's smaller houses a moment in the spotlight while its flagship brand continues to struggle.

Gucci, which accounts for the largest share of Kering's revenue and profit, remained in negative territory during the quarter. The brand has been in the midst of a lengthy repositioning under creative director Demna, who joined after a stint at Balenciaga, as the house tries to reset its aesthetic and reconnect with a customer base that drifted away during the final years of the previous creative regime. Kering's broader turnaround has leaned on cost discipline, leadership changes across its house portfolio, and a push to diversify revenue away from overreliance on a single brand.

The result offers Kering's leadership, including chief executive Luca de Meo, early evidence that the group's diversification strategy is gaining traction even before Gucci stabilises. Investors have been watching for exactly this kind of decoupling, proof that Kering's other houses can generate momentum independent of its largest and most troubled brand. The next test will be whether jewellery and eyewear's strength can be sustained through the second half, and whether Gucci's own turnaround begins to show comparable green shoots under Demna's direction.

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