Kering earnings call: Analysts focused on Gucci outlook after FY results

Kering (EPA:PRTP), the parent company of the luxury brand Gucci, conducted a conference call today to discuss its full-year financial results and provide insights into its future strategies.

At 11:58 GMT, shares were down 0.3% in Paris.

The company outlined its expectation for 2025 to be a year of stabilization with a goal to maintain flat operational expenditure growth. This target is planned to be achieved through a combination of a consistent advertising and promotion budget and an approximate 5% reduction in costs, attributed to improved efficiency.

The first half of the year is anticipated to show modest profitability, with a stronger performance expected in the second half. Kering’s management did not provide specific guidance on revenue or margins for Gucci, which was a major point of interest during the call.

They suggested that the arrival of new designer Sabato De Sarno concludes Gucci’s transitional phase, setting the stage for the brand to enhance its appeal and fashion sense. Despite this, Kering acknowledged that the year 2025 will still face challenges due to a planned 30% reduction in wholesale activities and the closure of directly operated stores and outlets.

The management’s vision includes achieving a mid to high single-digit like-for-like growth in full-price stores, with an anticipated gradual increase over the year.

Nevertheless, analysts at Barclays (LON:BARC) have expressed reservations about the company’s outlook. They highlighted concerns over the clarity of Gucci’s growth and margin prospects for 2025, labeling the targets as optimistic, especially in light of the uncertainties brought about by the designer change.

Additionally, current trends indicate that Gucci’s sales are still declining in the mid-20s percentage range, which is below Barclays’ estimate of a 13% decrease. This raises questions about the feasibility of reaching a stable EBIT for the brand.

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