On Tuesday, Kering reported first-quarter revenue of €3.57 billion, or roughly $3.9 billion, down 6% on a reported basis and flat on a comparable basis. The numbers point to stabilization at the group level, but the story remains unchanged. Gucci is still the problem, accounting for roughly 38% of Kering’s sales, and the turnaround is not landing fast enough.
The contrast with LVMH, which reported earnings on April 13, is sharp. The group reported €19.1 billion ($20.7 billion) in revenue for the same period, up 1% on an organic basis, with CFO Cécile Cabanis pointing to “improved trends across most businesses,” despite similar macro pressures.
Gucci sales fell 8% on a comparable basis, missing expectations and dragging the broader fashion and leather goods division down 3%. CFO Armelle Poulou framed the results as early progress rather than a setback on the call. “Stabilization represents an important first milestone and a further sequential improvement,” she said, noting the quarter was delivered “in a challenging and uncertain environment with low visibility and continued pressure on consumer confidence.”
The issue is where that progress is actually happening. In North America, Gucci is showing signs of life. Sales turned positive, up 9%, driven by new products and stronger execution. Poulou pointed to “strong newness and increasing AUR,” alongside improving conversion rates, adding that “all the effort that we are putting in the product and the retail experience in store is starting to bear fruit.” Growth is coming across categories, including handbags, ready-to-wear and shoes, with higher-end customers proving more resilient.
At LVMH, a similar strategy is already translating into results. The company pointed to “a good response to product innovation and creative renewal,” including early traction for new collections at Dior, suggesting a faster conversion from product reset to demand.
But that momentum is not global for Gucci. China remains deeply negative, and Europe is still weak. Poulou was direct about the gap. “We have been suffering in China from the fact that we have our own issues,” she said, pointing to problems with brand relevance, product alignment and distribution.
That divergence between the two conglomerates is most visible in China. While Gucci continues to decline in the region, LVMH reported 7% growth in Asia excluding Japan, “driven by growth across divisions in China and North Asia,” according to Cabanis, highlighting the uneven recovery across the sector.
Kering is trying to fix its issues in China with a mix of product resets and localized marketing. The company highlighted its “La Familia” campaign from March 2026, which was adapted with Chinese actors to drive local engagement, and a push toward region-specific assortments, including smaller bags like the Emblem line, typically priced between $1,100 and $2,200. At the same time, Gucci is tightening its footprint in the country, closing underperforming stores while investing in higher-quality locations.
Middle East disruption shaved roughly 0.5-1% off group retail, with regional sales down 11%, but that is marginal next to Gucci’s 8% decline, reinforcing that the brand’s weakness is largely internal.
There are early signs that the company’s strategies are working at a tactical level. Conversion is improving across regions, including China, even as traffic remains soft. “Traffic is still soft for Gucci in many regions, but what is encouraging is that conversion is going up,” Poulou said on the call. According to her, existing customers are responding better, but new demand is not yet coming through.
However, analysts are not so hopeful. Bernstein analyst Luca Solca called the quarter a “reality check,” writing in a post-earnings note that “it is easier and faster for the market to believe in a revival than it is for management to produce it.” The gap between narrative and performance is widening, especially as Kering continues to close stores, with more than 100 Gucci locations set to be cut this year. That creates an additional drag on sales just as the brand is trying to rebuild momentum.
Other parts of the business are performing well. While Gucci shrinks, Kering’s jewelry division — Boucheron, Pomellato, DoDo and Qeelin — grew 22%, highlighting where momentum in the portfolio is actually coming from. Eyewear, which spans Gucci, Saint Laurent, Balenciaga and licensed brands like Valentino, rose 7%, reinforcing its role as one of the group’s most consistent growth engines. But neither is large enough to offset Gucci’s decline, leaving the group reliant on a turnaround that remains uneven and regionally concentrated.
The focus now shifts to Kering’s capital markets day in Florence on April 16, where CEO Luca de Meo — who came into the brand from Renault in September — is expected to outline a new plan to revive growth, improve efficiency and strengthen the brand portfolio. According to the analysts on the call, that plan will need to prove that demand can return to scale, especially in China.
