- Strategic Reorganization: Kering implemented key decisions in 2025, including a partnership with L’Oreal and acquisition of Raselli Franco, to strengthen beauty and jewelry sectors.
- Operational Efficiency: Achieved 75 store closures, 8% inventory reduction, and EUR 925M cost savings, reflecting disciplined cost management.
- Sustainability Leadership: Maintained CDP Triple A rating for three consecutive years, aligning with its 10-year sustainability strategy.
- Financial Restructuring: Free cash flow reached EUR 4.4B, and net debt fell by EUR 2.5B to EUR 8B, improving financial resilience.
- Brand Performance Contrasts: Bottega Veneta grew 3% (revenue EUR 1.7B), Gucci declined 19% (revenue EUR 6B), and jewelry division (Boucheron, Pomellato) saw mid-teens to mid-20s growth.
Brand Performance
Gucci's revenue declined 19% on a comparable basis to EUR 6 billion, while Saint Laurent's revenue was down 6% to EUR 2.6 billion. In contrast, Bottega Veneta's revenue grew 3% to EUR 1.7 billion, driven by strong leather goods sales and expansion into other categories. The jewelry division, particularly Boucheron, saw robust trends in Q4, with revenue up in the mid-20s on a comparable basis.
Operational Efficiency
Kering has been focusing on operational discipline, reducing its store count by 75 units, and achieving EUR 925 million in cost savings. The company plans to continue streamlining its organization, with a goal of reducing the store footprint by 20% by 2028. Jean-Marc Duplaix noted that the company will prioritize store closures in the Asian market, particularly in Korea, Japan, and China.
Outlook and Valuation
For 2026, Kering expects growth and improved margins across all brands. Analysts estimate revenue growth of 6.8% next year. With a current P/E Ratio of 465.96 and EV/EBITDA of 8.09, the market appears to be pricing in significant growth expectations. The company's ROE stands at 0.49%, and ROIC at 1.2%, indicating room for improvement in profitability. As Kering continues to execute its turnaround plan, the company's focus on operational efficiency, brand desirability, and cost discipline will be crucial in driving future growth.
Financial Health
Kering's net debt stood at EUR 8 billion at year-end, down EUR 2.5 billion versus last year. The company's leverage ratio is expected to be between 1 and 1.5, putting it in a good territory concerning its strong investment-grade rating. With the L'Oreal deal and cash flow generation, Kering expects net debt to decrease substantially.