Gucci-owner Kering's Shares Down 5% after Q1 Sales Disappoint

A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo
A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo
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Gucci-owner Kering's Shares Down 5% after Q1 Sales Disappoint

A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo
A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo

Shares of Kering traded down 5% in European morning trade on Thursday, after the group reported a first-quarter sales drop that was worse than analysts' expectations.

Kering after the market close on Wednesday posted a 14% decline in sales, with a 25% drop at flagship label Gucci, the latest signal the luxury sector faces another tough year.

The sales report confirmed "a weakening backdrop" since February, said analysts at Jefferies, noting "the uncertainties around reigniting Gucci's desirability remain plentiful".

The brand, which accounts for around two-thirds of group profits, is betting on in-house talent Demna to revive sales, but new designs will only arrive gradually at the end of the year, Reuters reported.

The French luxury group flagged worsening sales in North America and Western Europe and said it expected sales to continue to fall in double digits, percentage-wise, in the second quarter, before starting to improve.

This leaves the "heavy lifting" for the second half, which will likely depend on a recovery in Chinese demand, noted analysts at Bernstein.

Prospects for the luxury industry, which had pinned hopes on growth from the United States to help pull it out of a slump as the Chinese market remains weak, have been darkened by recession fears prompted by US President Donald Trump's tariff announcements.

As trade tensions have risen, Bellwether LVMH has fallen 23% and Burberry and Kering have both lost 30% since the start of the year. Hermes and Cartier-owner Richemont, viewed by analysts as better insulated from economic downturns because of their wealthier clientele, are up 1% and 3%, respectively.

First-quarter reports from Kering's larger rivals last week also reflected the sector's slowdown and disappointed investors, with sales at LVMH's fashion and leather goods division down 5% while Hermes, which routinely outpaces expectations with double-digit growth, posted a 7% rise.

Analysts at Deutsche Bank on Thursday lowered their 2025 earnings per share estimate for Kering this year by 13% to 8.65 euros ($9.84), citing the company's cautious outlook for the first half, and noting the slowdown in all regions except Asia was slightly worse than peers.

TD Cowen lowered sales forecasts for Gucci this year by 15% to a 20% decline.

The analysts added that Gucci, as well as another Kering label Yves Saint Laurent, were expected to be slower to raise prices to offset tariffs than peers. The Kering labels have a broader base of less-wealthy clients who are more reluctant to splash out in a choppy economic environment.

LVMH, meanwhile, has raised prices of some Louis Vuitton handbags and leather goods by around 4% according to Bernstein and Barclays, while Hermes said it will pass on the full effect of tariffs to shoppers in the United States on May 1.

US tariffs could include a 20% charge on European fashion and leather goods and 31% for Swiss-produced watches if fully applied, but Trump earlier this month paused most of his tariffs for 90 days, setting a general 10% duty rate instead.

The price hikes from Vuitton are "more than enough" to offset even 20% tariffs, said Bernstein.



At Hermes, Woven Leather and Quiet Confidence Set the Tone for Paris Menswear

 A model wears a creation as part of the men's Hermes Spring-Summer 2026 collection, that was presented in Paris Saturday, June 28, 2025. (AP)
A model wears a creation as part of the men's Hermes Spring-Summer 2026 collection, that was presented in Paris Saturday, June 28, 2025. (AP)
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At Hermes, Woven Leather and Quiet Confidence Set the Tone for Paris Menswear

 A model wears a creation as part of the men's Hermes Spring-Summer 2026 collection, that was presented in Paris Saturday, June 28, 2025. (AP)
A model wears a creation as part of the men's Hermes Spring-Summer 2026 collection, that was presented in Paris Saturday, June 28, 2025. (AP)

While much of Paris Fashion Week chased spectacle, Hermes chose a different path.

On Saturday, artistic director Véronique Nichanian unveiled a Summer 2026 men’s collection that spoke in a language of quiet strength, deep craft and calm luxury.

Models walked beneath soaring mirrors in sharply cut jackets, high-waisted woven leather trousers, and sleeveless tops — pieces that fused house tradition with a modern, easy sensuality.

Nichanian’s colors were cool and exact: coffee, slate, taupe and beige, each one a lesson in subtlety. There was no shouting here, only precision.

What made the collection powerful was its restraint. Where others go wide, Hermes goes narrow, offering tailored silhouettes and a sense of order when the rest of fashion is busy making noise. Fine leather, featherlight silks, and bandanas with a whisper of fringe reminded the crowd that true luxury is about touch, not flash.

Nichanian’s playful touches — zigzag motifs, the wink of an unbuttoned shirt, a glint of silver hardware — kept things human, not stiff. It was a masterclass in how to make classic codes feel new, even radical, simply by refusing to chase trends.

In a season marked by designer shake-ups and economic jitters, Hermes stood alone: confident, focused, and unwilling to compromise. As Nichanian took her bow to cheers, she sent a clear message — at Hermes, luxury is about the pleasure of the wearer, not the applause of the crowd.