Kering released its third-quarter 2025 financial results on Thursday, showing it reduced the slump it had seen in the previous quarter.
The French luxury goods house, which owns brands like Balenciaga, Gucci, and Yves Saint Laurent, reported 3.42 billion euros ($3.97 billion) in group revenue, down 5% year-over-year (YOY) compared to a 15% drop in quarter-two.
It also beat Wall Street’s estimate of a 9.6% decline, according to consensus estimates cited by Reuters. Kering attributed the reduced revenue YOY, in part, to a negative currency effect of 5%.
Luxury is in a lull
As a whole, luxury brands have struggled in recent years, with blame boomeranging between factors like changing desires among young consumers, a domino effect from the COVID-19 pandemic, and a downturn in China—one of luxury’s biggest markets.
At Kering, Gucci, specifically, was still in a lull, though it saw an improvement over quarter two’s 25% drop. The brand just beat its predicted revenue of 1.32 billion euros ($1.53 billion), with 1.34 billion euros ($1.56 billion) and a 14% decline YOY, according to consensus estimates cited by CNBC.
Fashion designer Demna took over as Gucci’s artistic director in July after a decade in the same role at Balenciaga.
Yves Saint Laurent had a 4% decrease in revenue YOY, while other parts of the business saw an uptick in YOY revenue: Bottega Veneta is up 3% and Kering Eyewear is up 7%.
The new boss is not especially happy with the results
“Kering’s third-quarter performance, while representing a clear sequential improvement, remains far below that of the market,” Kering CEO Luca de Meo said in a statement. “This reinforces my determination to work on all dimensions of the business to return our Houses and the Group to the prominence they deserve. We are working relentlessly on our turnaround, as shown by our recent decisions.”
De Meo, previously the chief executive of automotive giant Renault, took the helm at Kering on September 15, most of the way through quarter three. Former CEO François-Henri Pinault stayed on as chairman of the board of directors.
Kering’s shares (EPA: KER) were up 8.7% at close on Thursday—a high for 2025—before falling over 4% during trading on Friday.
The earnings report comes only a few days after Kering announced the all-cash sale of its beauty division to L’Oreal for 4 billion euros ($4.6 billion).
That deal is expected to close in the first half of 2026 and gives L’Oreal ownership over the House of Creed high-end fragrance company and licenses for brands including Balenciaga, Bottega Veneta, and Gucci. Kering will receive royalty payments from L’Oreal.
The latter has owned the beauty license for Kering’s Yves Saint Laurent, since 2008.