Dive Brief:
- Kering posted first quarter 2025 revenue of 3.9 billion euros, or about $4.4 billion, a year-over-year drop of 14%, according to a Wednesday earnings release.
- Directly operated retail sales fell 16% on a comparable basis for the period, with sales declines reported in every region. In addition, Kering closed 25 stores in the first quarter, in line with a Q4 decision to review its retail footprint and close underperforming stores.
- At Gucci, the company’s largest brand, revenue for the period was down 24% year over year to 1.6 billion euros. Retail sales revenue fell 25% and wholesale revenue was down 33%, with both figures reported on a comparable basis. The company attributed Gucci’s retail decline to low store traffic.
Dive Insight:
Continuing losses at Gucci have plagued Kering since the third quarter of 2023, although the brand became sluggish before that.
While the March appointment of artistic director Demna, formerly creative director of Kering-owned Balenciaga, could bring consumer interest back, Yanmei Tang, an analyst at investment research firm Third Bridge, said Gucci’s performance is expected to be weak throughout 2025.
“Sales and profitability are likely to come under further pressure, as the brand struggles with creative direction and product newness,” Tang said in emailed comments. She also noted that Gucci’s leather goods “remain underwhelming” and said the brand lacked “standout products to attract consumers back into stores.”
Tang added that Demna’s streetwear-inspired aesthetic represents a shift from Gucci’s heritage-driven identity. She said his appointment raises questions about how the new designs will mesh with current styles and what it means for Gucci’s brand identity.
“Demna could reinvigorate Gucci’s ready-to-wear line, especially for younger customers,” Tang said. “His strength in streetwear and casualwear might help attract aspirational shoppers, particularly in Asia. However, this shift risks alienating long-time clients who were drawn to Gucci for its more classic or eclectic appeal.”
Gucci isn’t the only struggling brand in Kering’s stable.
Kering quarterly revenue since Q1 2023
Yves Saint Laurent, which appointed a new CEO in November, posted first-quarter revenue of 679 million euros, a decline of 8% year over year. Combined revenue from Kering’s smaller houses, including Alexander McQueen and Balenciaga, was 733 million euros for the period, down 11%. Wholesale in that division was down 17% on a comparable basis.
By contrast, Q1 revenue at Bottega Veneta was 405 million euros for Q1, up 4% year over year. The brand, which recently appointed Louise Trotter as creative director, posted a 7% retail sales increase, which Kering said was driven by double-digit sales increases in Western Europe, North America and the Middle East. Wholesale revenue, however, declined 13%. Both retail and wholesale figures from Bottega Veneta were reported on a comparable basis.
Kering Eyewear was also up slightly, with revenue of 476 million euros, up 2% for the first quarter. Kering Beauté, which includes the Creed brand, posted revenue of 71 million euros for the period, up 6%. Both figures were reported on a comparable basis.
By region, Kering retail sales in Asia-Pacific dropped 25%, while Western Europe and North America each saw 11% declines. Japan sales dropped 11%. In wholesale, revenue from Kering’s combined houses fell 23% on a comparable basis, which the company attributed to the ongoing strengthening of its distribution exclusivity.
Kering Chairman and CEO François-Henri Pinault said the company was facing an anticipated but difficult start to the year.
“In this environment, we are fully focused on executing on our action plans to reach our strategic and financial objectives and strengthen the positioning of our Houses on all our markets,” Pinault said in the release. “We are increasing our vigilance to weather the macroeconomic headwinds our industry faces, and I am convinced that we will come out stronger from the present situation.”
