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Investing.com -- Kering on Wednesday posted a milder-than-expected revenue decline for the third quarter, and saw signs of a sequential recovery across its luxury brands. The French luxury group is reducing debt and sharpening its focus on its core fashion brands.
Though the U.S.-listed shares of Kering jumped nearly 10%.
Group revenue in the third quarter of 2025 was €3.42 billion, down 10% as reported and 5% on a comparable basis, better than the 9.6% drop that analysts expected, according to Visible Alpha data. The drop included a 5% negative currency impact.
Kering said the result marked a sharp improvement from a 15% comparable decline in the second quarter. Sales from the directly operated retail network fell 6%, while wholesale and other revenue was down 2%.
“Kering’s third-quarter performance, while representing a clear sequential improvement, remains far below that of the market,” said CEO Luca de Meo
The company is also selling its beauty biz to Loreal for 4 billion euros ($4.7 billion), the first major gambit by new CEO Luca de Meo as he stamps his mark on the luxury group and cuts back its debt pile.
Gucci, Kering’s largest brand, generated €1.3 billion in revenue, down 18% as reported and 14% on a comparable basis. Retail sales fell 13%, but improved from the previous quarter thanks to stronger momentum in North America and Western Europe and demand for new leather goods.
Wholesale revenue dropped 25%. The brand presented its La Famiglia collection late in the quarter.
Yves Saint Laurent recorded €620 million in revenue, down 7% as reported and 4% on a comparable basis. Retail sales declined 2%, with growth in North America and a minor dip in Western Europe. Ready-to-Wear and Shoes saw double-digit growth, while wholesale fell 16% in line with rationalization plans.
Bottega Veneta posted €393 million, down 1% as reported but up 3% on a comparable basis. Retail sales rose 5%, led by North America and growth in Ready-to-Wear and Shoes. Wholesale revenue declined 9%.
Commenting on the report, broker Kepler Cheuvreux said Kering’s "turnaround [is] well underway."
"The turnaround remains at an early stage, with significant upside potential if Kering returns to normative margin levels," analyst Charles-Louis Scotti said.
Other Houses contributed €652 million, down 5% as reported but up 1% on a comparable basis. Retail sales were stable and wholesale rose 5%, supported by Balenciaga, McQueen, Brioni, and Jewelry Houses including Boucheron, Pomellato, and Qeelin.
Kering Eyewear and Corporate revenue reached €448 million, up 2% as reported and 6% on a comparable basis. Eyewear grew 7% and benefitted from key regional demand and a new Valentino partnership. Kering Beauté increased 3%, driven by Balenciaga and Creed launches.
Morgan Stanley analysts said this was "an encouraging Q3 results from Kering this evening and management sounded more upbeat than it had for relatively long time."
"The stock remains our Top Pick in the European Luxury Goods space."
(Pratyush Thakur contributed to this report.)