Kering Shares Surge As Gucci Sales Beat Fears, Turnaround Takes Hold

Kering Shares Jump After Fourth-Quarter Sales Decline Narrows

Kering shares jumped as much as 13% in Paris on February 10, 2026 after the group reported Kering fourth-quarter sales that fell less than expected. The early Surge in the stock mattered for markets because luxury sector stocks Europe often trade as a basket, and Kering’s turnaround progress can shift sentiment on consumer demand and pricing power.

Revenue declined 3% on a comparable basis in the fourth quarter to €3.91 billion, improving from a 5% decline in the prior quarter. For 2025, revenue totaled €14.675 billion, down 10% on a comparable basis, while recurring operating income fell 33% to €1.631 billion and the recurring margin slipped to 11.1%. The board proposed a €3.00 ordinary dividend and a €1.00 exceptional dividend per share for the May 28, 2026 annual meeting.

Gucci Revenue Decline Eases, And Sales Beat Consensus

Gucci sales fell 10% on a comparable basis in the fourth quarter, its tenth straight quarterly decline, but the result beat consensus expectations that were closer to a low-teens drop. Gucci generated about €1.62 billion of revenue in the quarter and finished 2025 at about €6.0 billion, down 19% on a comparable basis. New handbag launches and a stepped-up product rollout that began in early January supported demand in key categories.

That narrowing drop reduced Fears of a heavier promotional push into spring 2026, a risk that would have pressured gross margin and brand positioning.

Debt Progress Matters As Rates Stay Restrictive

Kering net debt €8 billion at December 31, 2025 was down €2.5 billion from a year earlier, supporting investor appetite for the name as funding costs remain elevated. Free cash flow from operations was €4.4 billion, or €2.3 billion excluding real estate deals in Paris, New York and Tokyo, a 35% decline from 2024 on that adjusted basis. Net financial expense totaled €594 million in 2025.

Luca De Meo Turnaround Plan Tightens The Model

Luca de Meo, who became chief executive in September 2025, is pressing cost reductions and sharper distribution. The group closed 75 stores and agreed to sell its beauty business to L’Oréal for €4.0 billion, a step intended to strengthen cash generation and reduce complexity. Execution Takes time, and Kering has pointed to 2026 as a year to rebuild margins and operating discipline.

Kering has also said it is open to discussions about bringing the Gucci beauty license back in-house before the current 2028 contract end date, which would increase brand control but could raise investment needs.

Other Houses Stabilize, While Smaller Brands Still Lose Money

Yves Saint Laurent was stable on a comparable basis in the fourth quarter and ended 2025 at €2.6 billion of revenue, down 6% on a comparable basis, with recurring operating income of €529 million. Bottega Veneta rose 3% on a comparable basis in 2025 to about €1.7 billion, while Kering Eyewear grew 3% to about €1.6 billion.

Other houses produced €2.9 billion of revenue in 2025, down 6% on a comparable basis, and recorded recurring operating income of -€112 million as restructuring weighed on profitability.

What This Means For Equities, Credit Spreads, And Foreign Exchange

If the improvement holds, European luxury equities can outperform in 2026 as investors rotate toward names with restructuring leverage. If it stalls, valuation multiples can compress quickly, especially for companies with higher exposure to China demand and tourist spending.

Credit spreads are the practical channel, especially as investors track the €8 billion net-debt trajectory. Tighter spreads for Kering’s debt improve flexibility for dividends and reinvestment, while a widening raises the hurdle for shareholder returns. Foreign exchange sensitivity is mostly second-order, but large luxury moves can influence euro-area equity inflows at the margin. A Hold in product pricing through the spring season would be a supportive signal for both margins and sentiment.

Base Case, Upside, Downside With Clear Triggers

Base case: Gucci comparable sales trends narrow further in the first half of 2026 and net debt stays near €8.0 billion as savings offset soft demand. Triggers include stable leather-goods pricing and sequential improvement in Asia Pacific traffic after the March shows.

Upside scenario: Gucci returns to flat comparable growth by the second quarter of 2026 and group margin rebuild begins toward 12%–13% as volumes recover. Triggers include stronger handbag sell-through in North America and improved tourist flows in Western Europe.

Downside scenario: demand remains weak in China and the United States, forcing more markdown activity, with Gucci back in double-digit declines and credit spreads widening. Triggers include rising inventory levels into summer 2026 and weaker wholesale reorders.