Kering shares surge on Gucci revival: is a turnaround finally in sight?

Shares in Gucci-owner Kering surged on Thursday after the French luxury group reported better-than-expected sales at its flagship brand, lifting optimism that a long-awaited turnaround may be taking hold.

The Paris-listed stock jumped as much as 9.2% to 346.75 euros in early trading before paring gains slightly to trade up 8.3% at 11:02 a.m.

The rally extends a strong year-to-date performance, with Kering’s shares up more than 45% in 2025.

The latest boost comes as investors continue to back CEO Luca de Meo’s restructuring plan for the group.

Since Kering’s chairman and controlling shareholder, François-Henri Pinault, announced in June that De Meo would take over as CEO, shares have nearly doubled in value.

Source: Reuters

Gucci leads an encouraging quarter for the group

Kering reported revenue of 3.42 billion euros ($3.97 billion) for the quarter ended September, ahead of the 3.32 billion euros expected by analysts polled by Visible Alpha.

Gucci, the group’s biggest and most closely watched brand, brought in 1.34 billion euros—slightly above forecasts of 1.33 billion euros.

While overall sales were still down 10% year-on-year, the pace of decline was shallower than in previous quarters, signalling that the group may be stabilising after a turbulent period.

“There is a lot to like in the Kering story and in these results,” Deutsche Bank analysts said, highlighting “positive signals” from Gucci, including the strong performance of new handbag lines.

De Meo’s rapid restructuring wins investor confidence

Luca de Meo, formerly CEO of Renault and an auto industry veteran, took the helm at Kering earlier this year despite having no previous experience in luxury fashion.

His appointment came as Gucci’s growth faltered and investor confidence wavered.

Since then, De Meo has moved quickly to refresh the company’s leadership and creative direction.

He has installed a new CEO at Gucci and appointed Denma Gvasalia as artistic director—a creative move that has been well received by the fashion industry.

“We are working relentlessly on our turnaround, as shown by our recent decisions,” De Meo told investors after the earnings release.

Analysts at RBC Capital Markets described the quarter as “an encouraging first step toward revenue stabilization, more importantly for the Gucci brand.”

Analysts see early signs of recovery but urge caution

Citi analysts noted a “noticeable lack of earnings downgrades for the first time in over three years,” suggesting that sentiment may be turning.

However, they cautioned that they “would not chase” what they called a “FOMO rally” until Kering unveils its full-year results and new strategic plan, expected early next year.

AlphaValue analyst Jie Zhang said the third-quarter results indicate that Kering “is regaining strength” and provides “better visibility” for 2026.

“Although the road to full recovery remains long, the quarter suggests the group has reached a point of stabilisation and entered an early phase of recovery,” Zhang said.

UBS analysts echoed the sentiment, noting that Kering’s performance “surprised positively with a beat across all brands,” though they maintained a neutral rating on the stock.

They cautioned that it remains unclear whether the group’s improvement reflects a broader luxury rebound or internal restructuring momentum.

Adding to the positive sentiment, Kering recently struck a $4.7 billion deal to sell its cosmetics and fragrance brands to L’Oréal.

The divestment marks another step in De Meo’s strategy to streamline operations and focus on core fashion and leather goods.

Earlier this year, Kering’s shares had languished as investors grew wary of Gucci’s slowdown, even as labels like Bottega Veneta performed steadily.

The latest quarterly results and portfolio moves have begun to shift that narrative.

Citi’s Thomas Chauvet said investors are “leaning into hopes of profound organisational and strategic changes” under De Meo.

“The hope trade will likely continue,” he wrote, suggesting that investor enthusiasm may persist ahead of Kering’s strategic update next year.