On July 29, French luxury group Kering announced that its net profit for the first half of 2025 fell by 46% year-over-year to €474 million. The decline was largely driven by the continued weak performance of Gucci, the group’s flagship brand, which accounts for nearly half of Kering’s total revenue.
Group revenue for the first half totaled €7.587 billion, down 16% on a reported basis and 15% on a comparable basis. In the second quarter alone, revenue fell 18% to €3.7 billion, falling short of the market forecast of €3.75 billion. Recurring operating income came to €969 million, down 39% from the previous year, while the operating margin dropped significantly to 12.8% from 17.5%.
Gucci’s sales in the second quarter declined by 25% on a comparable basis. Sales from directly operated stores were down 23%, although slight improvements were seen in North America and Asia-Pacific. Among new products, the “Giglio” bag, introduced as part of the Cruise 2026 collection, showed strong momentum and is expected to play a key role in future growth. Meanwhile, wholesale revenue plunged 50%.
Gucci posted recurring operating income of €486 million, with an operating margin of 16.0%. Although cost-cutting efforts helped to offset some of the impact, the margin still declined sharply—by 8.7 percentage points compared to the same period last year.
Across the group, Yves Saint Laurent’s second-quarter sales dropped by 10% year-over-year on a comparable basis. The “Other Houses” division, which includes Balenciaga and Alexander McQueen, also saw a 16% decline, reflecting broad-based weakness. In contrast, Bottega Veneta managed a 1% increase in sales, while Kering Eyewear posted a 3% gain.
François-Henri Pinault, Chairman and CEO of Kering, commented in an official statement: “The first half of 2025 has been a period of momentous decisions for Kering. On the governance front, I recommended to the Board of Directors, which has agreed, that we entrust the role of Kering CEO to Luca de Meo, while I will retain the chairmanship. On the creative front, reinforced teams, headed by new designers at three of our largest houses, are hard at work, with passion and determination, intensifying the desirability and drawing on the heritage of all our brands. On the operational and financial fronts, in a particularly tough market environment, we continued to streamline our distribution and cost base, and, executing on our roadmap, we took decisive steps to strengthen our financial structure.”
Luca de Meo, who will officially succeed Pinault as CEO on September 15, 2025, is known as a turnaround specialist with a track record of driving corporate reform at companies such as Renault. His appointment raises expectations for Gucci’s recovery and overall profitability improvement across the group.
Additionally, the company acquired a 30% stake in Valentino from Qatari investment fund Mayhoola in 2023 for €1.7 billion and holds an option to acquire 100% of the brand by 2028, drawing attention to its future capital strategy and potential strategic partnerships.
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