Kering hit by 15% Q2 revenue drop; Gucci down 25% as new CEO arrives
Bottom Line Impact
Without a disciplined pricing and brand-heat recovery plan, revenue will remain negative mid-teens with margin compression, ceding share to top-tier peers and eroding Gucci's equity; decisive pricing pilots, cost/working-capital moves, and accelerated newness can stabilize sales by Q4 and protect 100-150 bps of margin within 12 months.
Key Facts
5- Q2 revenue: EUR 3.7b, -15% comparable vs Visible Alpha consensus of -13%
- Gucci revenue: EUR 1.46b, -25% YoY; remains the largest profit contributor
- Broad-based weakness led by Japan and wider Asia Pacific; US also under strain
- CFO signaled further US price increases to counter tariffs in H2
- Kering shares -8% YTD; Luca de Meo appointed June, effective Sept 15 as group CEO
Time Horizons
Key Roles Affected
Executive Summary
Kering reported Q2 revenue of EUR 3.7b, down 15% comparable and below the -13% consensus, with Gucci sales down 25% to EUR 1.46b, underscoring continued share loss in core markets. Management flagged US price increases to offset tariffs while investors await Luca de Meo's Sept 15 start to clarify the turnaround path, debt priorities, and brand heat recovery.
Actionable Insights
Immediate Actions (Next 30-90 days)
Stage US price increases in 2 waves (3-5% on SKUs above USD 3k, then reassess elasticity) tied to VIC-exclusive value adds and service upgrades
Rationale: Mitigates tariff impact while protecting volume by anchoring increases to visible customer value; limits shock to entry-priced SKUs
Role affected:CEO
Urgency level:immediate
Launch EUR 300-500m cost and working-capital program (inventory weeks -2, supplier terms +15-20 days, capex deferral on non-flagship projects)
Rationale: Stabilizes FCF and supports reinvestment while revenue resets; targets 100-150 bps EBIT margin protection over 12 months
Role affected:CFO
Urgency level:immediate
Short-term Actions (6-12 months)
Reallocate 10-15% of media from upper-funnel to CRM, clienteling, and VIC activations in US and APAC; increase newness cadence to monthly drops for 3 hero families
Rationale: Drives conversion and repeat from top clients to offset traffic softness; sustained newness is critical to restore brand heat and sell-through
Role affected:CMO
Urgency level:short-term
Tighten DTC assortment by 20-30% SKUs, focus on top 50 hero SKUs, and ringfence private client pricing and previews to avoid public discounting
Rationale: Concentrates resources on proven winners, improves sell-through by 300-500 bps, and preserves brand equity during a pricing transition
Role affected:Chief Commercial Officer
Urgency level:short-term
Risks & Opportunities
Primary Risks
- Price elasticity misestimation leading to >8-10% unit declines in US leather goods
- Prolonged APAC softness and Japan normalization reducing tourist and domestic demand
- Brand heat erosion if newness and communications fail to re-energize Gucci within 2-3 quarters
Primary Opportunities
- Mix upgrade via VIC penetration and hero SKU focus can lift gross margin 100 bps
- Global price harmonization reduces grey market leakage and stabilizes sell-through
- Non-core asset rationalization to reduce net debt and fund Gucci brand investment