Gucci Sales Beat Market Expectations, Sending Kering Shares Up 16.9% as Turnaround Hopes Grow

On July 28, French luxury group Kering announced its financial results for the first half of 2026. Second-quarter revenue at its flagship brand Gucci exceeded market expectations, while the Group returned to positive growth on a comparable basis.

The day after the results were released, Kering shares closed 16.9% higher at €292.85 on July 29. It marked the stock’s largest one-day gain in nearly 24 years, reflecting growing market confidence that Gucci’s turnaround strategy is beginning to deliver results.

Gucci generated €1.41 billion in second-quarter revenue, representing a 3% decline on a reported basis and a 2% decrease on a comparable basis, which excludes the effects of currency movements and changes in the Group’s scope. Although sales remained below the previous year’s level, the result surpassed the market forecast of approximately €1.37 billion and showed a clear improvement from the first quarter.

Summary

Investors Focus on the Pace of Gucci’s Improvement

The key takeaway from the results was not that Gucci had already returned to growth, but that the pace of its sales decline had slowed significantly.

Second-quarter sales from Gucci’s directly operated retail network totaled €1.28 billion, down 2% on a comparable basis. However, this represented a 7-percentage-point improvement from the first quarter and the House’s strongest sequential acceleration in several quarters.

North America remained the primary growth driver. Western Europe and the Asia-Pacific region also showed early signs of recovery. Mainland China remained challenging, although sales trends improved throughout the quarter.

On the product side, new lines including the Borsetto and Paparazzo helped support performance. The Gucci Core show in New York also attracted significant attention, reinforcing the House’s visibility and renewed client engagement.

Jewelry and Eyewear Support Group Growth

Kering generated €3.65 billion in second-quarter revenue, up 1% year over year on a reported basis and 2% on a comparable basis.

Sales from the directly operated retail network increased by 2% on a comparable basis, improving by 4 percentage points from the first quarter. Wholesale and other revenue also rose by 3%, indicating progress across multiple distribution channels.

Beyond Gucci, second-quarter revenue at Kering Jewelry increased by 18% on a comparable basis, while Kering Eyewear posted growth of 8%. Saint Laurent, Bottega Veneta and Brioni also improved their performances from the first quarter.

For the first half of 2026, Group revenue totaled €7.22 billion. Revenue declined by 3% on a reported basis but increased by 1% on a comparable basis. Recurring operating income reached €921 million, while the recurring operating margin improved by 0.4 percentage points to 12.8%.

Luca de Meo Sees Early Results From the Turnaround

Luca de Meo, who became Chief Executive Officer of Kering in September 2025, commented on the results:

“Kering delivered improved performance in the second quarter, with revenue returning to growth. Across the Group, we are seeing early signs of progress in brand desirability, commercial momentum and operating performance. The quarter also showed sequential acceleration, including at Gucci, driven by the actions taken over recent months.

These first-half results demonstrate the positive impact of the decisive measures we have taken to reinforce the distinctiveness of our brands, simplify our organization and increase effectiveness across the Group. We are also advancing the rollout of our Group platforms, leveraging technology to enhance efficiency, strengthen client engagement and support stronger execution across our Houses. While the market environment remains demanding, we are focused on delivering our roadmap with discipline and consistency, creating the foundations for sustainable growth and long-term value creation.”

Net Debt Reduced by €4.7 Billion

Alongside its efforts to revitalize its brands, Kering has continued to strengthen its financial position and streamline its business structure.

Net debt stood at €3.3 billion at the end of June 2026, down €4.7 billion from €8 billion at the end of 2025. The sale of Kering Beauté to L’Oréal, completed on March 31, generated €4 billion in proceeds.

The Group also continued to optimize its retail network. Following 75 net store closures in 2025, Kering completed a further 84 net closures during the first half of 2026. This places the Group ahead of schedule against its full-year target of 100 net closures.

Gucci’s quarterly revenue has nevertheless declined for 12 consecutive quarters, while uncertainty remains in markets including Mainland China. The latest results therefore, do not signal the completion of the House’s turnaround.

However, with improvements emerging across revenue, margins, debt, and the retail network, investor attention is beginning to shift from whether Gucci can recover to how quickly that recovery can take shape.

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