Kering stock trades lower as Gucci weakness weighs on luxury group

Kering stock has been trading under pressure in 2026 after the French luxury group (ISIN FR0000121964) reported a double?digit revenue decline and a steep drop in operating profit, highlighting ongoing challenges at flagship brand Gucci and a heavier investment phase for the portfolio.

Revenue down 10 percent in Q1 2026

According to Kering's first quarter 2026 trading update published on 23 April 2026, group revenue fell by 10 percent year on year at reported rates to around EUR 4.5 billion, or about 10 percent on a comparable basis, as demand in key markets softened and Gucci sales declined.

Management reported that Gucci, which is Kering's largest brand, posted a revenue decline in the low?to?mid teens percentage range in the quarter compared with the same period of 2025, while the Saint Laurent and Bottega Veneta houses were more resilient on a relative basis.

In the same release, Kering highlighted that the first quarter revenue performance reflected weaker wholesale activity and more cautious spending by high?end customers, particularly in Europe and parts of Asia, offset only in part by growth in certain directly operated stores.

Operating income drops more than 40 percent

In its full year 2025 results, released in February 2026, Kering reported that recurring operating income declined by more than 40 percent year on year to roughly EUR 3 billion, as the group increased marketing and brand support spending while facing lower sales and less operating leverage.

The company indicated that its recurring operating margin for 2025 compressed by several percentage points compared with 2024, reflecting the combination of lower volumes at Gucci and higher investments across the portfolio, including in ready?to?wear and leather goods lines.

Net profit attributable to the group for fiscal 2025 also decreased significantly versus 2024, with management pointing to restructuring costs, store network adjustments and continued spending on creative direction changes as key drivers behind the weaker bottom line.

Gucci brand reset and investment plan

Kering has outlined a multi?year plan to reinvigorate Gucci, including a new creative direction, stepped?up marketing, and a repositioning of product assortments, which is expected to weigh on profitability in the near term but is intended to rebuild brand heat over time.

Management has emphasized that Gucci's new collections will ramp progressively through 2026, with wholesale customers and directly operated stores gradually absorbing the refreshed offer, which could create quarter?to?quarter volatility in sales trends.

Beyond Gucci, Kering is also investing in high?potential brands and categories, including jewelry and eyewear, while continuing to optimize its retail footprint, a strategy that requires capital expenditure and disciplined cost control to protect margins in a slower top?line environment.

Kering stock and market context

On Euronext Paris, Kering stock has lagged some global luxury peers in 2025 and 2026 as investors reassessed the earnings outlook, with the share price trading well below its peak levels reached during the post?pandemic luxury boom.

Market participants have focused on the magnitude of the decline in Gucci revenue and the more than 40 percent drop in recurring operating income in 2025 when valuing Kering stock relative to rivals with more stable earnings trajectories.

For investors, the key questions now center on how quickly Gucci's new strategy can stabilize comparable sales growth and whether Kering can rebuild its group operating margin over the next several years while funding the required brand investments.

Gucci handbags as a flagship product

Gucci handbags remain one of Kering's most visible product categories, representing a substantial share of Gucci revenue and acting as a barometer of brand desirability in key markets such as China, Europe and the United States.

The company has indicated that new handbag lines, including refreshed interpretations of classic designs, form a core part of the Gucci relaunch, supported by heightened marketing campaigns and selective distribution in flagship stores.

Stock valuation backdrop

Kering stock valuation now reflects a combination of near?term profit pressure and the potential for a gradual recovery if Gucci and other brands regain momentum, leaving the shares sensitive to quarterly updates on revenue trends, margin progression and cash generation.