Kering (EU:KER) reported a smaller-than-expected drop in third-quarter revenue on Wednesday, with signs that its luxury fashion portfolio is stabilizing. The French luxury group is moving aggressively to reduce debt and strengthen its focus on its core labels.
Shares of Kering listed in the U.S. jumped nearly 10% after the earnings release.
Group revenue for Q3 2025 came in at €3.42 billion, representing a 10% decline on a reported basis and a 5% drop on a comparable basis. That result outperformed analysts’ projections of a 9.6% decline, according to Visible Alpha, despite a 5% negative currency effect. The performance was a notable rebound from the 15% comparable drop recorded in the second quarter.
Sales through the directly operated retail network slipped 6%, while wholesale and other channels were down 2%.
“Kering’s third-quarter performance, while representing a clear sequential improvement, remains far below that of the market,” said CEO Luca de Meo.
As part of its streamlining strategy, the company also announced plans to sell its beauty business to L’Oréal S.A. for €4 billion ($4.7 billion) — a major early move by de Meo as he works to reshape the group and lower its debt.
Gucci weighs, but shows improvement
Gucci, the group’s biggest brand, posted revenue of €1.3 billion, down 18% on a reported basis and 14% on a comparable basis. Retail sales fell 13% but showed sequential improvement thanks to stronger demand in North America and Western Europe and new momentum in leather goods.
Wholesale revenue for Gucci fell 25%, while its La Famiglia collection was unveiled toward the end of the quarter.
Yves Saint Laurent sees mixed performance
Yves Saint Laurent generated €620 million in revenue, down 7% reported and 4% comparable. Retail declined 2%, with growth in North America offsetting a slight dip in Western Europe. Ready-to-Wear and Shoes segments recorded double-digit gains, while wholesale fell 16% as part of ongoing distribution rationalization.
Bottega Veneta edges higher on comparable basis
Bottega Veneta reported revenue of €393 million, down 1% reported but up 3% on a comparable basis. Retail sales grew 5%, supported by North American demand and strength in Ready-to-Wear and Shoes. Wholesale revenue slipped 9%.
Commenting on the update, broker Kepler Cheuvreux said Kering’s “turnaround [is] well underway.”
“The turnaround remains at an early stage, with significant upside potential if Kering returns to normative margin levels,” analyst Charles-Louis Scotti added.
Other Houses and Eyewear drive growth
The “Other Houses” segment brought in €652 million, down 5% reported but up 1% comparable. Retail was stable while wholesale rose 5%, helped by solid performance from Balenciaga, Alexander McQueen, Brioni, and jewelry houses such as Boucheron, Pomellato, and Qeelin.
Kering Eyewear and Corporate revenue rose to €448 million, up 2% reported and 6% on a comparable basis. Eyewear climbed 7%, supported by strong regional demand and a new partnership with Valentino. Kering Beauté grew 3% thanks to launches from Balenciaga and Creed.
Morgan Stanley analysts said this was “an encouraging Q3 results from Kering this evening and management sounded more upbeat than it had for relatively long time.”
“The stock remains our Top Pick in the European Luxury Goods space.”
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