--- title: "Revenue down 10%, profit down 40%! Gucci is deeply mired in winter, Kering hopes for a turnaround in 2026" description: "Kering Group is facing its most severe crisis in a decade, with flagship brand Gucci's revenue declining for ten consecutive quarters. Although the sales decline in the fourth quarter has narrowed and" type: "news" locale: "en" url: "https://longbridge.com/en/news/275412331.md" published_at: "2026-02-10T08:19:14.000Z" --- # Revenue down 10%, profit down 40%! Gucci is deeply mired in winter, Kering hopes for a turnaround in 2026 > Kering Group is facing its most severe crisis in a decade, with flagship brand Gucci's revenue declining for ten consecutive quarters. Although the sales decline in the fourth quarter has narrowed and the stock price has rebounded, the group's profit margin has been halved compared to three years ago, widening the gap with LVMH. Currently, the group is hoping to achieve a recovery by 2026 through store closures to reduce debt, personnel restructuring, and new product development French luxury goods giant Kering is experiencing its most severe profit crisis in a decade. Although the sales decline in the fourth quarter was slightly better than expected, the group's flagship brand Gucci has seen revenue decline for ten consecutive quarters, with annual operating profit plummeting by more than two-thirds compared to three years ago, and profit margins halved to 11%, widening the gap with competitor LVMH. Kering announced a fourth-quarter sales figure of €3.9 billion on Tuesday, a year-on-year decline of 3% after currency adjustments, better than the 5% decline anticipated by analysts. **Gucci's revenue fell by 10%, slightly better than the market expectation of a 12% drop, but this marks the tenth consecutive quarter of revenue decline for the brand.** CFO Armelle Poulou stated that Gucci showed signs of improvement in "almost all regions" at the end of last year, supported by new product and handbag sales. She emphasized that "2025 will not reflect Kering's true potential or the strength of our brands, but it lays the foundation for future recovery." This performance highlights the severe challenges facing Kering. Since the appointment of new CEO Luca de Meo in June last year, the group's stock price has risen by about 50%, but investors are still waiting for specific details on the recovery plan. ## Declining Performance Hard to Conceal Weakness Although Kering's fourth-quarter sales of €3.9 billion showed a narrowing decline, the downward trend continues. The Italian flagship brand Gucci, which accounts for most of the group's profits, saw a 10% revenue decline, continuing the brand's ongoing slump since 2022. CFO Poulou pointed out that **thanks to new product and handbag sales, Gucci saw some improvement in almost all regions at the end of last year.** However, these positive signals have yet to translate into a substantial performance turnaround. In the face of an uncertain business outlook, Kering further reduced its store network, **net closing 75 boutiques in the fourth quarter, with Poulou stating plans to close more stores.** The group's brands also include Balenciaga, Bottega Veneta, and Yves Saint Laurent. ## Gucci's Predicament Deepens Gucci's troubles began in 2022. After the fall from grace of former star designer Alessandro Michele's maximalist style, the brand's sales have continued to weaken, marking ten consecutive quarters of revenue decline. This situation has led Kering to face strict scrutiny from investors regarding its high debt and declining profitability. Kering's operating free cash flow last year fell by 35% to €2.3 billion after excluding one-time income from real estate sales. This figure reflects a significant deterioration in the group's cash generation ability. JP Morgan analyst Chiara Battistini stated, **"For Kering, the key is (to restore) broad appeal globally."** This points to the core issue facing the group—how to win back consumer favor ## Profitability Plummets Significantly Kering Group's profitability decline is alarming. The group's annual operating profit is €1.63 billion, less than one-third of the 2022 level. The overall operating profit margin of the group has plummeted from 28% three years ago to 11%, while the profit margin of the Gucci brand has dropped sharply from 36% to 16%. This performance stands in stark contrast to its competitors. **LVMH achieved a profit margin of 22% last year despite a slowdown in the overall luxury goods industry, with its leather goods and fashion division—home to Louis Vuitton and Dior—reaching a profit margin of 35%.** The gap between Kering Group and industry leaders continues to widen. These figures highlight the severe challenges facing Kering Group. Even after the appointment of new CEO de Meo, which has seen the stock price rise by about 50%, the group still needs to achieve fundamental improvements in operations to catch up with competitors. ## Hope for Recovery by 2026 Despite the current dire situation, Kering Group's management remains cautiously optimistic about future recovery. CFO Poulou emphasized that 2025 lays the foundation for the group's future recovery, suggesting that a real turnaround may not be evident until 2026. Since Luca de Meo was appointed CEO in June last year, market confidence in Kering Group has somewhat recovered, with the stock price rebounding by about 50%. **However, investors are still waiting for de Meo to announce specific details of the revival plan to assess whether the group can truly escape its current predicament.** The fourth-quarter performance slightly exceeded expectations, providing a glimmer of hope for the market, but this is far from sufficient to prove that the group has emerged from the trough. Whether Kering Group can achieve a true turnaround by 2026 will depend on its ability to successfully reshape brand appeal, improve operational efficiency, and re-establish its position in the fiercely competitive luxury goods market ### Related Stocks - [PPRUY.US - Kering](https://longbridge.com/en/quote/PPRUY.US.md) - [LVMUY.US - Louis Vuitton](https://longbridge.com/en/quote/LVMUY.US.md) - [KLXY.US - Kraneshares Global Luxury Index ETF](https://longbridge.com/en/quote/KLXY.US.md) - [LUX.US - Tema Luxury ETF](https://longbridge.com/en/quote/LUX.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 創意總監 Demna 首次展示 Gucci 秀，開雲集團推動轉型 | 創意總監 Demna 首次展示 Gucci 秀，開雲集團推動業務轉型 | [Link](https://longbridge.com/en/news/277233896.md) | | Gucci 的母公司開雲 (ADR) 聘請了一位汽車行業的高管來領導其製造業務的改革 | 開雲集團（Kering），古馳（Gucci）的擁有者，已任命來自 Forvia 的汽車高管 Stephane Noel 為首席工業官，負責領導一項旨在提高效率的製造改革。這一舉措是在新任首席執行官 Luca de Meo 的領導下進行的，他 | [Link](https://longbridge.com/en/news/277505308.md) | | Gucci 的 Demna 在意大利品牌的首次時裝秀上展示了 “Primavera” 系列 | 古馳的 Demna 在意大利品牌的首次時裝秀中推出 “Primavera” 系列 | [Link](https://longbridge.com/en/news/277221139.md) | | 關鍵事實：Bernard Arnault 將其在 LVMH 的持股比例提高至 50.01%；股票交易已被披露 | 伯納德·阿爾諾將其在 LVMH Moet Hennessy Louis Vuitton 的股份增至 50.01%，較去年 49.77% 有所上升，進一步鞏固了其家族對這家奢侈品巨頭的控制。2026 年 2 月 24 日，LVMH Moët | [Link](https://longbridge.com/en/news/276815242.md) | | 開雲集團在巴黎表現不佳，Demna 的首次 Gucci 秀反響冷淡 | 根據 Bernstein 分析師的説法，Kering 的 Gucci 品牌在時裝週推出的 “Primavera” 系列反響平平。該系列推出了 1,225 個新款，幾乎將產品目錄擴大了 50%。雖然配飾的定價保持穩定，但成衣部分的價格大幅下跌 | [Link](https://longbridge.com/en/news/277228906.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.