Gucci’s sales decline is strengthening doubts about the pace of recovery at Kering’s (Euronext Paris: KER) key brand, according to Freedom Broker analyst Vladimir Chernov. In his view, weak demand in Asia and additional risks for European retail could keep pressure on the group’s shares in the short term.
Kering is a French group that brings together luxury brands Gucci, Saint Laurent, Bottega Veneta, Balenciaga and others. The company produces apparel, leather goods, jewelry and eyewear. Reviving Gucci remains one of management’s top priorities.
Gucci sales fell more than expected
According to Kering’s Q3 2026 report, Gucci revenue amounted to €1.29bn. It declined by 4% on a reported basis and by 6% on a comparable basis, excluding the impact of exchange rates and changes in the business perimeter.
Sales through the brand’s own retail network fell by 9% on a comparable basis. The company attributes the weakness primarily to store traffic: pressure persisted in the Asia-Pacific region, especially in mainland China, as well as in Japan.
After the results were published, Kering shares lost more than 10%, Oninvest reports. Chernov notes a drop of about 12% and views the market reaction as disappointment with the pace of Gucci’s recovery.
Other segments partially offset the brand’s weakness
Kering’s overall revenue totaled €3.35bn: the figure was virtually unchanged on a reported basis and fell by 1% on a comparable basis.
At the same time, results within the group differed. Comparable retail sales in the fashion and leather goods segment excluding Gucci rose by 2%. Support came from Saint Laurent, Bottega Veneta and Brioni.
Management maintained its goal of increasing operating margin from recurring operations in 2026. To achieve this, the group continues to cut costs and optimize its store network while investing in the appeal of its brands.
European retail faces additional risks
Chernov also points to unrest in France and Italy as an additional risk factor for luxury companies. In his assessment, damage and temporary store closures could lead to direct losses, while a deterioration in safety perceptions could reduce the appeal of Paris and Milan for shoppers.
At the same time, the comment provided does not include a quantitative assessment of the impact of these events on Kering’s results. The main confirmed factor weighing on Gucci remains weak store traffic momentum.
Weak Chinese demand affects the entire sector
Earlier, Freedom Broker assessed the decline in sales at LVMH’s fashion division as a risk signal for the luxury industry. Natalia Milchakova linked the deterioration in performance primarily to a slowdown in demand in China.
Gucci’s new results heighten investors’ focus on this factor. In Chernov’s view, sustainable recovery in Kering shares will require confirmation of improved sales at the flagship brand.
This is not an individual investment recommendation.