Is Kering profitable in 2026?

Kering remains profitable but severely weakened: FY2025 net income collapsed to about €72 million from €1.13 billion in 2024, a roughly 94% drop, while recurring operating income fell 33% to €1.6 billion (11.1% margin), reported February 9-10, 2026.

Why is Gucci struggling so much?

Gucci, over 40% of Kering's revenue, fell 22% reported in FY2025 to about €6.0 billion, then dropped another 8-14% in Q1 2026 amid Middle East tourism weakness, despite new creative director Demna and CEO Luca de Meo's turnaround plan announced April 16, 2026.

Kering is publicly traded on Euronext Paris (ticker KER), but the Pinault family holding company Artemis owns 42.3% of shares as of December 31, 2025, giving founder-descendant Francois-Henri Pinault effective control as Chairman.

Is Kering a safe company to join right now?

Kering cut headcount 7% to 43,731 employees by end of 2025, closed 75 net stores, and is mid-turnaround under new CEO Luca de Meo (since September 2025) whose roadmap targets recovery only by 2028-2030, making near-term stability uncertain.

Could AI replace Gucci's creative work?

Unlikely soon: Gucci's February 2026 use of AI-generated campaign imagery for Milan Fashion Week triggered public 'AI slop' backlash, reinforcing that luxury consumers value human-driven creative direction like Demna's, even as Kering pursues AI hardware via a Google smart glasses partnership for 2027.

Who is Kering's biggest competitor?

LVMH remains the dominant global luxury leader, but Kering has slipped to roughly #5 among luxury conglomerates by 2025 revenue, behind LVMH, Richemont, Chanel, and Hermes, according to a June 24, 2026 industry ranking.

Consumer brands · France

Kering

kering.com ↗

French luxury group behind Gucci, Saint Laurent, and Bottega Veneta, now mid-turnaround.

Losing its protection

Assessed 20 July 2026 · Evidence as of 20 July 2026

The structural protection is eroding.

On the recordSince 20 July 2026 · Checkable from H2 2026 · Every call on the record Checkpoint: H1 2026 results and Gucci comparable sales trend versus de Meo's 'structural reset' deadline

The call

Kering's craft and family ownership keep it alive, but Gucci's slide and rivals pulling ahead make the next two years about whether de Meo's reset actually works.

Kering owns high-end fashion brands including Gucci, which makes up most of the company's profits but has been dropping in sales sharply over the past year. The real threat isn't a new technology or an upstart competitor, it's that richer customers are choosing other luxury brands like those from LVMH and Hermès instead. The one thing that could change everything is if Gucci stops shrinking and starts growing again over the next few months, which would mean the new CEO's turnaround plan is actually working rather than just talk.

Why

AI pressure: None apparent. Luxury buying still runs on brand heritage and craft, not AI recommendation engines, so AI shopping agents barely touch demand for now. Could AI do the core job? Unlikely.

Bigger players: LVMH, Richemont, Hermès, Chanel. Rivals kept growing while Kering's Gucci engine shrank, pushing Kering from the number two luxury group to roughly fifth by 2025 revenue. Could a giant copy it? No, they are blocked.

What protects it. Pinault family control (42.3% via Artemis), 50-year brand licenses, and craft-based products AI can't replicate protect the base business.

What would change this call

Gucci comparable sales trend in H1 2026 and Q3/Q4 2026 reports. Shows whether de Meo's 'structural reset' is stabilizing Gucci or decline continues.
Whether Kering needs another Valentino capital injection beyond the planned 2026 amount. Would signal deepening losses at Valentino beyond current plan.
Gucci Beauty license handover to L'Oréal completing on schedule by July 2027. Tests whether cash flow and licensing transition proceed as promised.

Key numbers

Gucci revenue fell 22% to about 6.0B euros (2026-02-09)
Net income collapsed to 72M euros from 1.13B (2026-02-10)
Q1 2026 Gucci sales fell another 8-14% (2026-07-13)

Named risks

Gucci, over 40% of revenue, still declining double-digits into Q1 2026 with no confirmed stabilization. Severity: high
Valentino losses requiring repeated capital injections could force earlier Kering ownership decisions before 2028-2029. Severity: medium
New CEO de Meo's turnaround roadmap targets recovery only by 2028-2030, a long window for investor patience. Severity: medium
AI-generated marketing content triggered consumer backlash, risking brand equity if repeated. Severity: low
Continued headcount and store closures (75 net closures in 2025) signal ongoing contraction. Severity: medium

Rivals, as read in July 2026

Rival	Direction	Evidence
LVMH	losing to	Kering slipped from #2 to roughly #5 by 2025 revenue rank as of June 24, 2026
Richemont	losing to	Richemont posted +20% Q1 FY2027 sales growth, overtaking Kering per July 15, 2026 report
Hermes	losing to	Hermes runs ~41% operating margin and now outranks Kering by revenue as of mid 2026
Chanel	losing to	Private rival Chanel gained rank ahead of Kering in 2025 luxury conglomerate ranking
EssilorLuxottica/Meta	contesting	Gucci-Google smart glasses (announced April 16, 2026) aim to challenge Meta Ray-Ban AI eyewear by 2027

Questions people ask

Is Kering profitable in 2026?: Kering remains profitable but severely weakened: FY2025 net income collapsed to about €72 million from €1.13 billion in 2024, a roughly 94% drop, while recurring operating income fell 33% to €1.6 billion (11.1% margin), reported February 9-10, 2026.
Why is Gucci struggling so much?: Gucci, over 40% of Kering's revenue, fell 22% reported in FY2025 to about €6.0 billion, then dropped another 8-14% in Q1 2026 amid Middle East tourism weakness, despite new creative director Demna and CEO Luca de Meo's turnaround plan announced April 16, 2026.
Who owns Kering?: Kering is publicly traded on Euronext Paris (ticker KER), but the Pinault family holding company Artemis owns 42.3% of shares as of December 31, 2025, giving founder-descendant Francois-Henri Pinault effective control as Chairman.
Is Kering a safe company to join right now?: Kering cut headcount 7% to 43,731 employees by end of 2025, closed 75 net stores, and is mid-turnaround under new CEO Luca de Meo (since September 2025) whose roadmap targets recovery only by 2028-2030, making near-term stability uncertain.
Could AI replace Gucci's creative work?: Unlikely soon: Gucci's February 2026 use of AI-generated campaign imagery for Milan Fashion Week triggered public 'AI slop' backlash, reinforcing that luxury consumers value human-driven creative direction like Demna's, even as Kering pursues AI hardware via a Google smart glasses partnership for 2027.
Who is Kering's biggest competitor?: LVMH remains the dominant global luxury leader, but Kering has slipped to roughly #5 among luxury conglomerates by 2025 revenue, behind LVMH, Richemont, Chanel, and Hermes, according to a June 24, 2026 industry ranking.

Timeline

2026-07-15Romain Spitzer named Bottega Veneta CEO effective September 1, 2026, replacing Bartolomeo Rongone
2026-07-07Gucci and L'Oreal sign 50-year beauty license, Gucci transfer accelerated to July 2027
2026-04-16Capital Markets Day: de Meo unveils turnaround roadmap; Gucci-Google AI glasses deal announced
2026-03-31L'Oreal completes €4 billion acquisition of Kering Beaute
2026-03Kering creates new Jewelry division led by Jean-Marc Duplaix
2026-02-25Gucci AI-generated campaign imagery draws public 'AI slop' backlash
2026-02-09FY2025 results: revenue €14.7B down 13%, net income collapses to ~€72M
2025-09-10Valentino shareholders agreement amended, deferring ownership options to 2028-2029
2025-09Luca de Meo, former Renault CEO, becomes Kering CEO

Revision history

20 July 2026

First assessed. Losing its protection. The text above is fixed as of this date and is not edited afterwards.

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