Written by Frode Skar, Finance Journalist.
Kering shares surge as new CEO outlines turnaround strategy
Kering shares jump after quarterly sales beat expectations
Kering shares surged sharply after the luxury group reported quarterly results that came in slightly better than analysts had expected and signaled a clear strategic reset under its new chief executive. The stock rose around 11 percent during the session and was at one point up close to 14 percent, marking its strongest single day performance in more than 17 years.
The rally came despite the fact that Kering is still reporting declining sales and weaker profitability compared with previous years. Investors instead focused on signs that the downturn may be bottoming out, combined with more decisive leadership and a stronger emphasis on execution. For the market, this raised hopes that Kering shares could be approaching a turning point.
Quarterly results offer temporary relief
Kering reported fourth quarter revenue of 3.9 billion euros, representing a 3 percent decline on a comparable basis. The figure nevertheless came in slightly above consensus expectations, easing fears of a deeper slowdown toward the end of the year and providing support for Kering shares.
Gucci, the group’s largest and most important brand, posted a 10 percent decline in comparable sales during the quarter. While still weak, the result was marginally better than feared. Other houses within the portfolio delivered flat or modest year on year growth, suggesting a degree of stabilization outside Gucci.
Kering shares weighed down by weak full year performance
Despite the positive market reaction, Kering’s full year figures highlight the scale of the challenge facing the group. For 2025, total revenue fell 10 percent to 14.7 billion euros. Recurring operating income declined by 33 percent compared with the previous year.
Operating margin dropped to 11.1 percent, reflecting lower volumes, high fixed costs and a luxury market where repeated price increases are no longer easily absorbed by consumers. These pressures have weighed heavily on Kering shares over the past year and eroded investor confidence.
New CEO acknowledges structural weaknesses
Chief executive Luca de Meo was unusually frank in his assessment of the year. He stated that 2025 was not the year Kering wanted and that the results did not reflect the group’s full potential. This direct tone was welcomed by investors who have been calling for clearer acknowledgment of the company’s internal challenges.
De Meo took over as CEO last year and is the first external appointment to lead Kering in its modern history. His background in the automotive sector, where he led a major turnaround at Renault earlier in the decade, has raised expectations of a more disciplined and operationally focused approach.
Gucci remains central to the outlook for Kering shares
Gucci remains the single most important driver of Kering shares. The brand has struggled for several years following aggressive price increases, strategic missteps and frequent creative changes. The result has been weaker demand and loss of momentum in an increasingly competitive global luxury market.
The appointment of Demna as creative director is intended to restore the brand’s desirability and relevance. His first collection was launched last year, but has not yet delivered a clear improvement in sales trends. As a result, investors are closely watching whether 2026 can mark a genuine recovery for Gucci and, by extension, Kering shares.
Structural shifts in the luxury market
The challenges facing Gucci and Kering also reflect broader structural changes within the luxury industry. Demand surged during and immediately after the pandemic, supported by excess savings and strong spending by high net worth consumers. This environment encouraged widespread price increases across the sector.
More recently, this strategy has begun to backfire. Slower economic growth, particularly in China, has dampened demand, while elevated price points have made some products less accessible to new customer segments. These dynamics have put disproportionate pressure on Kering shares compared with some peers.
Kering shares lift sentiment across the luxury sector
The strong performance of Kering shares spilled over into the wider luxury sector, with several major European peers trading higher following the results. The move suggests investors are increasingly sensitive to any signs that conditions in the sector may be stabilizing.
Luxury stocks have been under sustained pressure, driven by falling earnings expectations and uncertainty around future growth. As a result, even modestly positive signals can trigger sharp market reactions, despite ongoing structural challenges.
Analysts strike a cautious tone
Analysts have described the results as an early but still tentative improvement. While performance appears to be stabilizing across parts of the brand portfolio, the key test will be whether Gucci can return to growth in 2026.
Cost discipline, operational efficiency and tighter capital allocation are seen as critical levers to support a more durable recovery in profitability and to strengthen the investment case for Kering shares.
Capital discipline and new growth avenues for Kering shares
Under new leadership, Kering has placed greater emphasis on balance sheet strength. The sale of the group’s beauty business for around 4 billion euros was a clear signal of increased capital discipline, aimed at reducing debt and sharpening focus on core luxury activities.
At the same time, De Meo has indicated that the group is preparing to enter new areas such as wellness and longevity. These segments are viewed as long term growth opportunities that could complement traditional luxury fashion and provide additional drivers for Kering shares over time.
Investors await further details
Kering has announced that a more comprehensive strategic update will be presented at its capital markets day in April. Until then, much of the optimism surrounding Kering shares will be driven by expectations rather than confirmed results.
Management has been clear that the group remains far from its desired position and that the turnaround will take time to fully materialize.
The road ahead for Kering shares
For investors, the coming quarters will be critical in determining whether the recent rally in Kering shares can be sustained. Markets will be looking for tangible evidence of sales stabilization, particularly at Gucci, alongside gradual improvement in margins.
If the structural measures begin to deliver, Kering could re establish itself as a stronger player within the global luxury sector. Failure to do so, however, could see Kering shares come under renewed pressure in an already uncertain market environment.
