PARIS — Kering’s growth engine stalled in the third quarter as its star brand Gucci struggled to maintain its speed amid a sector-wide slump in demand in China.
The French group, which also owns Saint Laurent, Balenciaga, Boucheron and others, said revenues for the three months ended Sept. 30 remained flat at reported exchange rates, totaling 3.35 billion euros.
This represented a decrease of 1 percent in comparable terms, above a consensus forecast for a 1.3 percent organic sales drop.
But Gucci, the group’s star brand and main profit engine, missed expectations, posting a 6 percent decrease in sales at constant exchange rates, worse than the 5.4 percent fall expected by analysts.
This followed a comparatively smaller 2 percent decline for Gucci in the second quarter, when the group showed progress in its ongoing turnaround journey by posting its first comparable sales increase in three years.
Kering chief executive officer Luca de Meo warned at the time that the recovery would not be linear, noting the third quarter could be flat due to more unfavorable comparisons with 2025.
“Third-quarter revenue reflects the phasing we anticipated, in a softer macroeconomic environment,” de Meo said in a statement released after the market close Thursday.
“The recovery of Gucci remains our defining priority. We are steadily strengthening desirability and advancing our product development at pace,” he said.
“The transformation of Kering is a multiseason undertaking, but the improvements we are seeing across the group, notably in desirability and key operating indicators, reinforce our confidence in the direction we have set and the determination of our teams to deliver it,” de Meo added.
The group maintained its full-year guidance.
“While short-term revenue trends reflect a more challenging macroeconomic environment, Kering confirms its objective of improving its recurring operating margin in 2026, supported by the efficiency measures underway, while maintaining strong investment in the desirability of its houses,” it said.
While Kering no longer breaks out the performance of its other fashion houses, third-quarter sales in its fashion and leather goods division were down 3 percent in comparable terms.
By comparison, organic sales at LVMH Moët Hennessy Louis Vuitton’s fashion and leather goods unit fell 5 percent year-over-year, dragged down by a sharp slowdown in demand in China.
Kering said Gucci’s performance reflected the less pronounced impact of newness than in the second quarter, when creative director Demna’s first designs became more widely available in stores.
“While traffic remained the main constraint, conversion, average price and average ticket improved further, supported by the progressive rollout of new collections,” the company said.
Revenues in the Kering jewelry division were up 11 percent in comparable terms, with eyewear rising 4 percent and the corporate and other division down 5 percent.
After bolstering the management of its fashion business, Kering is shaking up its creative director ranks, with the departure of Anthony Vaccarello at Saint Laurent and Seán McGirr at Alexander McQueen. It has yet to name their replacements.
The Kering figures come on the heels of a disappointing read from Hermès International, which earlier on Thursday reported third-quarter sales rose 4.3 percent at constant exchange rates, its weakest quarterly growth rate in six years.