Kering (EU:KER) shares fell more than 8% after its flagship brand Gucci reported weaker-than-expected first-quarter sales, weighing on overall group performance. Gucci’s comparable revenue declined 8%, missing analyst expectations for a 6% drop.
Group revenue for the quarter came in at €3.57 billion, slightly below the €3.59 billion consensus, with comparable growth flat overall. This follows declines in the previous two quarters, underscoring ongoing pressure in the luxury sector. Gucci generated €1.35 billion in revenue, falling short of the €1.39 billion expected and dragging the Fashion and Leather Goods division to a 3% comparable decline, compared with forecasts for a smaller drop.
Analysts at Jefferies, which rates the stock “hold” with a €280 price target, said “evidence of a clear turn in Gucci’s brand heat remains patchy,” adding that the upcoming capital markets day was “unlikely to provide a ready-made toolbox of KPIs.”
Regional performance was mixed. North America showed improvement, while Europe also strengthened but remained in negative territory. China continued to decline, and Japan remained challenging. The Middle East reduced group retail comparables by around 70 basis points; excluding this impact, March comparable growth would have been approximately 3% rather than flat.
Other divisions provided some support. Kering Jewellery delivered strong comparable growth of 22%, well above expectations, driven by price increases at Boucheron and new product launches. Kering Eyewear grew 7%, while the Corporate and Other segment posted 10% growth, both exceeding consensus forecasts.
By region, comparable retail sales rose 9% in North America but declined 3% in Japan, 4% in Asia-Pacific excluding Japan, 7% in Western Europe, and 8% in the rest of the world.
Management reiterated its full-year outlook, maintaining expectations for a flat gross margin and indicating a “probable slight improvement” in operating expenses compared with prior guidance. The group continues to target growth across its portfolio in 2026, excluding Alexander McQueen.
Jefferies forecasts full-year 2026 adjusted EBIT of €1.85 billion, below the €1.94 billion consensus, with earnings per share estimated at €6.67 versus consensus of €6.16.
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