Kering's Sales Lose Steam in Struggling Luxury Market — Update

By Andrea Figueras

Kering said sales were hit by a challenging luxury market in the most recent quarter, as the Parisian group seeks to reignite momentum of its brands.

The owner of Gucci, Bottega Veneta and other high-end labels booked a 1% decrease in revenue on a comparable scope and exchange rate basis for the third quarter. Revenue was 3.345 billion euros ($3.76 billion), broadly in line with consensus estimates.

Sales at the group's main fashion and leather goods business declined 3%, with those at the flagship Gucci brand plunging 6%. The company said Gucci's recovery is gradually taking shape, but analysts at Bernstein argued that the brand's sales fall was worse than expected, with a negative performance in directly operated stores.

Kering has been one of the worst affected companies by the sharp drop in demand for luxury goods, which has been particularly severe among so-called aspirational shoppers as well as Chinese buyers. The French company is heavily exposed to these consumer segments, which have been affected by economic woes and have reduced their spending on pricey goods.

On top of the industry's struggles, Kering also is working to reinvigorate its brands by revamping the management and creative teams of some of its houses like Gucci and Alexander McQueen.

Unlocking the group's full potential requires, among other factors, restoring momentum at Gucci and delivering the action plan in China, Chief Executive Luca de Meo said.

"We know we have a lot of work to do in China," finance chief Armelle Poulou said during an earnings call, noting that the performance in the country was one of the main hurdles during the quarter.

Kering's results come after other luxury names warned of a sluggish sales in the key Chinese market. The industry had hoped that an improvement in China would bolster the sector's recovery following a prolonged period of lackluster demand for luxury goods. However, Chinese consumers continue to spend less due to the country's troubled economic climate.

The performance of the third quarter doesn't reflect where the company wants to be, Poulou said, adding that the impact of the transformation the company is undergoing isn't yet reflected in the revenue figures. Poulou noted that October trends were in line with those seen in the third quarter in most regions.

Looking ahead, Kering maintained its goal of improving its recurring operating margin this year. However, it didn't comment on its intention to return to growth this year, as it had previously indicated.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

October 22, 2026 13:33 ET (17:33 GMT)