Gucci revenue falls 6% in third quarter as recovery faces renewed pressure

Key Facts

Gucci revenue fell 6% on a comparable basis in the third quarter of 2026, according to results released by Kering, as the contraction accelerated after easing in the previous quarter. The brand's revenue totalled 1,291 million euros, compared with 1,343 million euros in the third quarter of 2025, down 4% as reported. The comparable decline reflects revenue performance at constant consolidation scope and exchange rates. Kering's quarterly revenue totalled 3,345 million euros, compared with 3,331 million euros a year earlier, with a reported change of 0%. On a comparable basis, group revenue fell 1%, while Gucci continued to post a sharper contraction than the group as a whole.

The decline was steeper in Gucci's directly operated retail network, where sales fell 9% on a comparable basis in the third quarter, according to Kering's statement. The group attributed pressure on the brand to lower customer traffic in Asia-Pacific, highlighting mainland China in particular. Weak customer traffic extended to Japan, with pressure affecting more than one Asian market over the same period. North America, meanwhile, remained Gucci's most resilient market, according to the group's assessment of regional performance. Kering also pointed to a challenging comparison base for the brand during the quarter. It added that the impact of new products had diminished from the previous quarter, alongside pressure from lower store traffic.

The results follow a second quarter in which Gucci's contraction slowed, with revenue then totalling 1,410 million euros, according to Kering's first-half results. The brand posted declines of 3% as reported and 2% on a comparable basis in that quarter, before the downturn widened again in the third quarter. The weakness had begun earlier; in April, Reuters reported that Gucci sales fell 8% in the first quarter of 2026. The news agency described that result as the brand's "eleventh consecutive quarterly decline". Better-than-expected second-quarter results subsequently boosted hopes for Kering's turnaround efforts, according to Reuters. Those hopes were reflected in a 16.9% jump in the group's shares during the July 29 session, after Gucci's performance improved relative to expectations.

In the broader luxury sector, LVMH's fashion and leather goods business posted a 5% organic contraction in the third quarter of 2026, according to the rival group's results. That coincided with Gucci's continued revenue decline, following a relative improvement in the pace of its performance in the previous quarter. In China, which Kering singled out when describing weak customer traffic, retail sales grew 1.1% year on year in September. Total Chinese retail sales of consumer goods reached 4,243.3 billion yuan during the month, according to the National Bureau of Statistics. The reading covers spending on consumer goods in the Chinese market during September, within the quarter reported by the two luxury groups.

On its financial position, Kering had reduced net debt to 3.3 billion euros by the end of June 2026, according to Reuters' report on its first-half results. That compares with net debt of 8 billion euros at the end of 2025, before the reduction during the first half. In its third-quarter results announcement, the group reaffirmed its target to improve its recurring operating margin in 2026. It said efficiency measures supported that goal, alongside continued investment in the appeal of its brands. Kering thus maintained its aim to improve operating profitability for the year, despite the continued decline in comparable revenue in the latest quarter.

As part of its planned measures for 2026, Kering plans net closures of at least 125 stores, according to the group's statement. The reduction in its store network accompanies efficiency measures and continued spending on brand appeal outlined in its guidance for the year. Subsequently, the beauty licensing agreement between Gucci and L'Oréal is expected to take effect in mid-2027, according to Kering's announcement alongside its first-half results. Further out, the group's rebuilding plan sets the end of 2028 as the target for entering a phase of renewed, sustainable growth. Presenting the plan, Kering said it aimed to be "in a phase of renewed, sustainable growth" by that point, as part of its strategic rebuilding objectives.