Kering, the French luxury group behind Gucci, saw its shares tumble by around 12% on October 23, 2026, as investors reacted to another decline in sales at its flagship fashion brand. The sell-off followed the company’s third-quarter results, which showed that Gucci’s recovery remains difficult despite new product launches, changes to its pricing strategy and an ongoing restructuring of its retail operations.
The results also highlight the challenges facing the broader luxury industry. Weak demand in China and Japan, cautious consumer spending and a more demanding comparison with the previous year have weighed on sales. Although Kering’s jewelry, eyewear and several other fashion brands delivered growth, Gucci remains central to the group’s turnaround. Investors are now watching whether its restructuring can restore customer traffic, strengthen brand appeal and improve profitability.
Key Takeaways
- Shares fall: Kering shares dropped around 12% on October 23 following its latest quarterly results.
- Gucci remains under pressure: The brand generated €1.291 billion in third-quarter revenue, down 6% on a comparable basis.
- Group revenue weakens: Kering recorded €3.345 billion in revenue, flat as reported but down 1% on a comparable basis.
- China and Japan weigh on sales: Lower store traffic in these markets affected Gucci’s performance.
- Restructuring continues: Kering completed 105 net store closures during the first nine months of 2026 and plans at least 125 net closures for the full year.
- Some businesses are growing: Kering Jewelry, Kering Eyewear, Saint Laurent and Bottega Veneta provided positive contributions.
Why Did Kering Shares Fall 12%?
The immediate trigger was Gucci’s continued sales decline. Investors had been looking for evidence that new collections and management changes would produce a stronger recovery at the brand, which is one of Kering’s most important businesses.
Instead, Gucci’s comparable revenue fell 6% in the third quarter. This was weaker than the 2.8% decline analysts had forecast, according to the Financial Times. Kering’s overall comparable sales also declined, reinforcing concerns that its turnaround could take longer than anticipated.
The share-price reaction reflects expectations about future earnings as well as the latest sales figures. Luxury companies depend on pricing power, brand desirability and healthy demand from affluent customers. When sales weaken for an extended period, investors may become less confident about the pace of recovery and the company’s ability to restore margins.
The stock’s decline does not mean every Kering brand is struggling equally. Rather, investors are focusing on whether growth elsewhere in the portfolio can compensate for Gucci’s difficulties.
Gucci Sales Fall as Store Traffic Remains Weak
Gucci generated €1.291 billion in revenue during the third quarter of 2026. That represented a 4% decline on a reported basis and a 6% decline on a comparable basis.
The company’s directly operated retail network performed particularly weakly. Retail sales fell 9% on a comparable basis, with lower traffic in Asia Pacific—especially mainland China—and Japan weighing on results.
| Gucci performance metric | Q3 2026 result |
|---|---|
| Revenue | €1.291 billion |
| Reported revenue change | -4% |
| Comparable revenue change | -6% |
| Directly operated retail sales | -9% comparable |
| Wholesale revenue | €120 million |
| Wholesale comparable growth | +45% |
Source: Kering’s third-quarter 2026 results.
Kering said conversion rates, average prices and average transaction values improved further as new collections reached stores. However, the company identified store traffic as its main constraint.
Wholesale revenue increased sharply, partly because of a low comparison base and the timing of orders for new collections. That improvement offers some support, but it has not yet translated into a sustained recovery in the brand’s directly operated retail network.
Kering’s Overall Revenue Shows a Mixed Picture
The pressure on Gucci did not translate into a comparable decline across every Kering business. The group reported third-quarter revenue of €3.345 billion, approximately unchanged from the previous year on a reported basis.
On a comparable basis—which adjusts for currency movements and changes in the business perimeter—revenue fell 1%.
| Business segment | Q3 2026 revenue | Comparable change |
|---|---|---|
| Kering Fashion & Leather Goods | €2.743 billion | -3% |
| Of which Gucci | €1.291 billion | -6% |
| Kering Jewelry | €239 million | +11% |
| Kering Eyewear | €373 million | +4% |
| Corporate & Other | €27 million | -5% |
| Kering total | €3.345 billion | -1% |
Source: Kering’s official results. Figures may not sum exactly because of eliminations and rounding.
Jewelry delivered one of the strongest performances, supported by brands including Boucheron and Pomellato. Eyewear also recorded growth across regions.
Within fashion and leather goods, retail sales excluding Gucci increased 2%, supported by Saint Laurent, Bottega Veneta and Brioni. These results demonstrate that Kering’s portfolio has areas of resilience, even while its flagship brand remains under pressure.
Why the Luxury Industry Faces a Difficult Winter
Kering’s results arrive during a challenging period for luxury companies. Demand in China has been an important concern, while uncertainty about the global economy has made consumers more cautious about discretionary purchases.
Luxury brands also face a delicate balance between broadening their customer base and maintaining exclusivity. Raising prices can support revenue per transaction, but it may discourage aspirational shoppers. Expanding access too aggressively can also risk weakening a brand’s premium positioning.
Gucci has been working to refine its product offering and pricing architecture while introducing new collections under creative director Demna. These changes are intended to strengthen the brand’s appeal, but fashion repositioning typically takes several seasons to influence customer behavior and financial results.
The wider industry is also experiencing uneven performance. Results from other major luxury groups have pointed to softer demand in some markets, adding to investor concerns about the pace of recovery.
However, the difficulties are not uniform across every brand or product category. Kering’s jewelry and eyewear growth shows that demand can remain resilient where brands have strong customer engagement and compelling product offerings.
Kering Closes Stores as Part of Its Turnaround
Chief executive Luca de Meo is leading a restructuring intended to improve Kering’s operating performance and restore Gucci’s momentum. One component is a reduction in the group’s retail footprint.
Kering completed 105 net store closures during the first nine months of 2026, exceeding its earlier full-year objective of 100 net closures. It now plans at least 125 net closures for the year.
The strategy is intended to streamline distribution and improve the quality of the group’s retail network. Closing underperforming stores can reduce operating costs, but it also requires careful decisions about locations, customer access and brand visibility.
Kering is also working to improve product development, strengthen execution and use its group-wide platform more effectively. The company has emphasized that the transformation will take multiple seasons rather than delivering an immediate turnaround.
Management continues to prioritize an improvement in recurring operating margin in 2026, even as short-term revenue trends reflect a more challenging economic environment.
What Investors Will Watch Next
The key question is whether Gucci’s new collections can attract more customers to stores and translate into sustained revenue improvement. Better conversion rates and higher average transaction values are encouraging indicators, but weak footfall remains a significant obstacle.
Investors will also monitor the performance of Saint Laurent, Bottega Veneta, jewelry and eyewear. Continued growth in these businesses could help reduce Kering’s dependence on Gucci, although the flagship brand remains a major factor in the group’s overall performance.
The next set of results should provide more evidence about the effectiveness of store closures, product changes and management’s turnaround plans. Until then, the share-price decline signals that investors remain concerned about the time and investment required to restore growth.
The Bigger Picture
Kering’s latest results illustrate the difficulty of turning around a major luxury brand when customer demand is weakening and the brand’s appeal needs rebuilding. New collections and operational restructuring can improve the foundations of a business, but the financial benefits depend on whether customers return and make purchases.
The group’s other brands provide some support, yet Gucci’s continued decline makes the recovery more complicated. For the luxury sector, the coming quarters will test whether companies can protect their pricing power and customer loyalty while navigating softer demand and greater economic uncertainty.
FAQs
1. Why did Kering shares fall around 12%?
Kering shares fell sharply on October 23, 2026, after Gucci reported a 6% comparable revenue decline for the third quarter. Investors were concerned that the brand’s recovery was taking longer than expected.
2. How much revenue did Gucci generate in Q3 2026?
Gucci reported €1.291 billion in third-quarter revenue, down 4% on a reported basis and 6% on a comparable basis.
3. Is Kering’s entire business declining?
No. While group comparable revenue fell 1%, Kering Jewelry grew 11% and Kering Eyewear increased 4%. Retail sales excluding Gucci also rose 2% within the fashion and leather goods business.
4. Why is Gucci struggling in China?
Kering identified lower store traffic in mainland China and Japan as a major factor affecting Gucci’s directly operated retail performance. The company has not attributed the entire decline to a single cause.
5. What is Kering doing to revive Gucci?
The company is refining its product and pricing strategy, introducing new collections, improving product development and streamlining its retail network. It plans at least 125 net store closures in 2026.
Looking Ahead
Kering’s next challenge is to demonstrate that its restructuring can produce a sustained improvement in Gucci’s sales. Investors will be looking for stronger store traffic, better performance from new collections and evidence that the company’s cost measures are improving profitability without undermining the brand’s long-term appeal.
The broader luxury market will also matter. If demand remains soft in China and other important markets, even well-known brands may find growth difficult to achieve. Kering’s jewelry and eyewear businesses provide some diversification, but the performance of Gucci is likely to remain a central factor in how the market assesses the group’s recovery.
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