On Tuesday, Kering reported flat revenue growth at €3.57 billion, on a comparable basis, for the first quarter of 2026.
The conglomerate’s fashion and leather goods sales were down 3% to €2.85 billion, below consensus expectations of a 2% decline. As for its biggest house Gucci, which accounted for €1.35 billion, sales were down 8%, also below consensus expectations of -6%. But this marked a slight improvement for the Italian house, which was down 10% last quarter.
“Gucci remains our top priority,” Kering CEO Luca de Meo said in a statement. “A comprehensive turnaround is underway, with decisive actions across client, distribution, and, above all, the [product] offer. We have reset the product architecture and strengthened category focus, with new collections rolling out progressively in stores throughout the year.”
Demna’s designs for the house arrived in stores gradually throughout the quarter, starting with La Famiglia. CFO Armelle Poulou noted a positive reaction to La Famiglia, which represented over 7%-8% of the SKUs and sales in Q1, and to Primavera, which is available in limited quantities following the see-now-buy-now model. “[The good traction] will be confirmed with a full Primavera collection in the summer,” she told investors. Poulou also highlighted the performance of the Marmont handbag. “We are very happy with the success of the reintroduction of the new Marmont. This product has been reproduced with a better quality and slightly improved design.”
Gucci reported 8% year-on-year growth in North American retail sales, however this wasn’t enough to compensate for a declining performance in Asia and Europe, Kering said. On Gucci’s underperformance in China, Poulou added: “We have a dedicated plan for China. We are rebuilding the cultural relevance element, with sharper storytelling, stronger ambassadors, and region-specific activations, while working to improve and upgrade our store network.”
As a group, retail sales in Western Europe were down 7%, North America was up 9%, Japan was down 3%, Asia-Pacific was down 4%, and the rest of the world, including the Middle East, was down 8%. The Middle East currently accounts for around 5% of Kering retail sales, with regional revenue declining 11% in Q1.
Bottega Veneta, Saint Laurent, Balenciaga, and Brioni all delivered growth, according to the group. Poulou said Bottega Veneta saw the strongest growth in Q1, while Balenciaga saw the highest sequential improvement. (Kering changed its segment reporting as of this quarter, and no longer breaks down revenues of individual houses except Gucci.)
Investors asked about the new product creation under Pierpaolo Piccioli at Balenciaga. “It is going to help us to strengthen the identity without compromising its edge,” Poulou said. “If you’ve been into the store, you can already see his impact, especially with a stronger women’s ready-to-wear proposition. Balenciaga was very much skewed toward men in ready-to-wear. Apart from the new creativity, we are also happy to see the handbag category developing very well. The Rodeo and the City bags are very successful in all regions.”
Kering’s jewelry division, which consists of Boucheron, Pomellato, Dodo, and Qeelin, was up 22% to €269 million. Kering Eyewear was up 7% to €489 million.
The earnings update confirms how difficult a turnaround may be for Kering, according to Bernstein luxury goods analyst Luca Solca. “It is easier and faster for the market to believe in a revival, than it is to produce it,” he said, referring to the rise in Kering shares since de Meo’s appointment in June 2025. Kering will host its Capital Markets Day on April 16 in Florence, with de Meo expected to present his strategy for the group.
“Our mission is to return all brands, excluding McQueen, to full-year growth,” Poulou said. McQueen is in the midst of a restructuring that involves job cuts. “That doesn’t mean we don’t believe in McQueen,” de Meo told reporters in February. “It means the structure was too heavy for its potential.”
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