Kering Revenues Fell 14% in Q1 as Gucci Woes Continue

Kering reported revenues fell 14 percent to 3.88 billion euros in the first quarter of 2025, dragged down by low store traffic and weak wholesale numbers at Gucci, where sales dropped 25 percent on a comparable basis.

Barclays had forecast organic group sales to slump 12 percent, which would have been on par with Kering’s performance in the fourth quarter of 2024.

The numbers trailed the performance of Kering’s larger luxury rivals LVMH Moët Hennessy Louis Vuitton, which reported a 3 percent dip in first-quarter revenues to 20.31 billion euros, and Hermès International, which bucked the trend and delivered a 7.2 percent improvement to 4.13 billion euros.

Gucci had recorded a 24 percent drop in organic revenues in the fourth quarter. The brand accounted for 63 percent of Kering’s operating profit in 2024. 

Kering reported double-digit declines across all regions in the first quarter of the year, with Asia-Pacific down 25 percent, in line with the last three months of 2024, the company noted.

However, Western Europe and North America fell 13 percent, and Japan 11 percent, representing a sequential deceleration.

First-quarter sales at Bottega Veneta improved 4 percent, reflecting gains “across all product categories,” and Kering Eyewear logged a 3 percent increase at comparable exchange rates. Meanwhile, Saint Laurent sank 9 percent and “other houses,” which includes Balenciaga, McQueen, Pomellato and Brioni, declined 11 percent.

While “the performance of Balenciaga’s leather goods was very solid,” sales were down at McQueen, still finding its footing under designer Seán McGirr.

“As we had anticipated, Kering faced a difficult start to the year,” François-Henri Pinault, Kering chairman and chief executive officer, said in a statement issued Wednesday after the close of trading on the Paris bourse.

“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. “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.”

Kering is to host a conference call to discuss the results, where Barclays expects the focus to be on the Trump administration’s tariffs, the health of the Chinese consumer cohort and the appointment last month of Balenciaga’s star designer Demna as Gucci’s new creative director. He is tasked with jolting the Italian fashion house out of its doldrums with a gust of strong creativity.

Investment analysts initially looked dimly on the appointment, sensing aesthetic risks and fretting about the timing of his first collection, given that he is only finishing up his Balenciaga tenure in July with a couture collection.

Demna succeeds Italian designer Sabato De Sarno, who exited last February after a two-year collaboration that failed to ignite sales. De Sarno’s collections were met with mixed reviews and his timeless take on signature pieces did not gain enough traction at retail for a turnaround.

On Wednesday, Kering trumpeted a “promising launch” for Gucci’s new Softbit line as the brand “strengthens and updates its product range.”