Kering shares fall 16% after Gucci revenue drops 6% on a comparable basis
Key Facts
Kering shares fell 16% on Oct. 23, heading for their worst daily performance on record, after Gucci reported a decline in third-quarter 2026 revenue. The brand posted revenue of 1.291 billion euros, down 4% on a reported basis and 6% on a comparable basis for currency and scope, the company said. Reuters described the decline as in line with market expectations, but the investor reaction extended to other companies in the sector. Hermes shares fell 4% to a four-year low, while LVMH shares dropped 1.5%. The moves showed varying degrees of pressure on companies, with Kering leading the sector’s sell-off that day.
Kering said Gucci’s performance reflected a tougher comparison base and a smaller contribution from new products than in the second quarter. It added that store traffic remained the main constraint, despite improvements in conversion rates, average price and average transaction value. Sales at Gucci’s directly operated retail network fell 9% on a comparable basis during the quarter. The company said weaker traffic affected Asia-Pacific, particularly mainland China, as well as Japan. By contrast, the brand’s wholesale and other revenue rose 35% on a comparable basis, highlighting the difference in performance across sales channels.
Kering Chief Executive Luca de Meo said third-quarter revenue reflected "the trajectory we expected, in a weaker economic environment." That explanation places Gucci’s result in the context of a broader economic slowdown, but does not remove the brand-specific factors identified by the company, including store traffic and the comparison base. Gucci sales declined for more than three consecutive years through the third quarter, Reuters reported, while the brand accounts for about half of the group’s profits, according to the report. JPMorgan analyst Chiara Battistini said progress in improving the brand’s appeal "is still at a very early stage." Gucci’s weight in Kering’s profits makes its performance a central factor for investors assessing the group’s results.
Chinese data show a mixed picture for domestic demand: retail sales reached 4,243.3 billion yuan in September, up 1.1% year over year. Growth accelerated by 0.7 percentage points from August, according to China’s National Bureau of Statistics. But the modest improvement in retail sales coincided with a 7.2% year-over-year decline in fixed-asset investment, excluding rural households, from January to September. Sales at exclusive-brand stores also fell 10.3% over the same period, compared with declines of 2.2% at specialty stores and 2.9% at department stores. These indicators provide context for consumption and trade in China, while weak traffic at Gucci stores in mainland China remains a factor Kering directly cited in explaining the brand’s performance.
China’s manufacturing purchasing managers’ index stood at 50.1% in September, up 0.3 percentage points from the previous month and entering expansion territory, according to the National Bureau of Statistics. In the stock market, Kering’s U.S. depositary receipts closed at 19.94 dollars on Oct. 23, according to L7 data. Those closing prices add to the European share decline and the reactions in luxury-goods stocks following Gucci’s results announcement.
Kering continues to shrink its retail network, closing a net 105 stores in the first nine months of 2026, after a net 75 store closures in 2025. The group said it aims to close at least 125 stores net during 2026. Chief Financial Officer Armelle Poulou said the company "continues to execute its plan with the utmost discipline," and deferred the question of a return to overall growth to the full-year results. The closure plan is part of the group’s measures as pressure on Gucci’s performance continues. The full-year results, alongside delivery on the store-closure target, are the next milestones management cited in assessing the group’s trajectory.