After a bruising year, Gucci remains at the center of Kering’s recovery strategy. The French luxury group reported 2025 revenue of €14.7 billion, down 13% as reported, with recurring operating income falling 33% to €1.6 billion. Yet investors responded positively to signs of stabilization in the fourth quarter and to CEO Luca de Meo’s pledge to return to growth and improve margins in 2026.
Gucci, which accounts for roughly two-fifths of group sales, saw revenue drop 19% on a comparable basis to €6 billion in 2025. Retail sales were down 18%, while wholesale fell sharply as the brand tightened distribution to restore exclusivity. In the fourth quarter, however, comparable sales declined 10%—an improvement over previous quarters. The launch of the “La Famiglia” collection under new creative direction has begun to rekindle interest, supported by a steady injection of newness across categories.
Gucci’s recurring operating margin fell to 16.1%, reflecting negative operating leverage, though cost controls helped soften the blow. De Meo, recruited for his turnaround track record, has moved quickly to streamline the organization, cut costs and deleverage the balance sheet. Net debt fell to €8 billion by year-end, aided by the planned sale of Kering Beauté to L’Oréal, which will fund an exceptional dividend.
Elsewhere in the portfolio, Yves Saint Laurent proved resilient, holding margins at 20% as fourth-quarter sales stabilized. Bottega Veneta delivered 3% comparable growth for the year, with strong traction in North America and the Middle East. The “Other Houses,” including Balenciaga and Alexander McQueen, remained mixed amid restructuring.
With a Capital Markets Day set for April, Kering promises a clearer roadmap to reignite desirability “house by house.” For now, all eyes remain on Gucci: its ability to convert creative momentum into sustained growth will define whether 2026 marks the true beginning of a new cycle.
(ps)
