From a stabilized T1 to a growing S1: why sequencing changes the interpretation
Kering returned to growth in the first half of 2026. Behind this statement, the signal is more subtle than a simple return to profitability: the French luxury group went from a stable first quarter on a like-for-like basis to a 2% increase in the second quarter, before ending the first half with a 1% increase on a like-for-like basis. However, on a reported basis, first-half revenue was down 3%, to €7.22 billion, primarily due to changes in scope and exchange rates.
This sequencing is essential. Kering is not yet marking the spectacular return of a luxury giant to its historical pace. Rather, it is showing the first signs of operational normalization, after several years marked by the decline of Gucci, pressure on profitability, network rationalization, and a much more selective global market.
Under the leadership of Luca de Meo, Kering's CEO since September 2025, the group is now seeking to combine brand desirability, financial discipline, product focus, retail efficiency, inventory control, and organizational simplification. The first half of 2026 will be the key period for measuring the initial effects of this approach.
The real lesson from Kering's results for the first half of 2026 lies in the quarterly performance. In the first quarter of 2026, revenue reached €3.568 billion. It declined by a further 6% on a reported basis but remained stable on a like-for-like basis. The directly operated network, including e-commerce, declined by 2%, while wholesale grew by 6%.
Three months later, the picture has changed. Second-quarter revenue reached €3.652 billion, a 2% increase on a like-for-like basis. Most importantly, directly operated retail sales rebounded to 2%, a four-point improvement compared to Q1. Wholesale and other revenues grew by 3%. This sequential growth is probably more telling at this stage of the recovery than the single 1% increase for the first half of the year.
In the luxury sector, a rebound becomes truly significant when it gradually spreads across the product, traffic, conversion rate, in-store availability, and relationships with key customers. A single quarter might benefit from a favorable sales calendar or a comparison base. However, sustained improvement from one quarter to the next strongly suggests that a more substantial effort is beginning to pay off.
The parallel with 2025 is revealing. In the first half of 2025, Kering was still showing a 15% contraction on a like-for-like basis. Moving from this decline to 1% like-for-like growth a year later doesn't mean all the problems are solved. But it clearly changes the direction of the trend.
Kering in H1 2026: a normalization rather than a return to hypergrowth
The word "normalization" probably describes the situation better than "rebound." The global luxury market is no longer operating in the exceptional environment of the post-pandemic era. Consumers are more selective in their spending, aspirational customers are more sensitive to price increases, and the wealthiest clients seek products that can justify their price point through craftsmanship , exclusivity, materials, and experience. It is precisely in this context that the concept of desirability is regaining strategic importance.
During the presentation of ReconKering in Florence, the group indicated its intention to place "True Luxury" at the heart of its model: creativity, craftsmanship, cultural relevance, and product excellence. The strategy also includes efforts focused on product and pricing architecture, distribution, customer insights, technological systems, and industrial efficiency.
This approach aligns with a broader transformation of luxury analyzed on Luxe Daily: value is no longer solely based on the logo or the automatic increase in prices. It is built on the coherence between image, genuine quality, rarity, and experience—a logic also visible in the evolution of the luxury handbag in 2026.
For Kering, the question is no longer simply: "Is revenue increasing?". It becomes: what kind of growth is the group capable of rebuilding?
Gucci remains the true linchpin of Kering's recovery
It's impossible to analyze Kering's growth in the first half of 2026 without focusing on Gucci. The Italian fashion house generated €2.757 billion in revenue in the first half, still down 9% as reported and 5% on a comparable basis. Retail declined by 6%, while wholesale and other revenues grew by 3%. At first glance, Gucci has therefore not yet "returned to growth."
But the momentum between the two quarters is significantly better. In Q1, Gucci posted an 8% decline in comparable sales and a 9% decline in its own stores. In Q2, its comparable sales fell by only 2%, and retail sales also declined by 2%. In other words, Gucci stores improved their performance by seven points in three months. This is probably one of the most significant figures of the first half of the year.
Gucci: making the product the House's primary media outlet once again
Luca de Meo identified Gucci as the group's top priority very early on. In Q1, Kering explained that it had undertaken a complete overhaul of its product architecture, with a clarification of categories and the gradual rollout of new collections.
ReconKering goes further: Gucci must rediscover a clear creative direction, strengthen its leather goods, make its ready-to-wear, footwear, and jewelry offerings more coherent, and raise its quality standards. This commitment is important because a brand's desirability cannot be rebuilt solely through marketing campaigns.
In the luxury sector, communication captures attention; the product transforms that attention into revenue. In the second quarter, Kering cited the Borsetto and Paparazzo as key launches that boosted sales momentum, along with the Gucci Core show in New York. The priority now is to transform these initial signals into sufficiently strong icons to create continuity between seasons.
Gucci's profitability provides another interesting signal
However, Gucci's recovery should not be viewed solely through the lens of its sales. In the first half of the year, the company generated current operating income of €468 million and a current operating margin of 17% , an improvement of one percentage point compared to the first half of 2025.
Seeing profitability improve while revenue continues to contract is a valuable indicator of operational discipline. This doesn't guarantee that the turnaround is complete, but it suggests that Kering is trying to avoid a common pitfall: buying growth by making numerous commercial concessions.
The challenge now will be to simultaneously restore full-price sales volume, product mix, and Gucci's cultural power. This battle for desirability comes at a time when Gucci's symbolic value has been much discussed in recent years. Luxe Daily already analyzed this issue in the spring in its report on the brand's decline in valuation rankings.
North America, Europe, Asia: Gucci's recovery remains geographically uneven
The geography of the recovery is particularly instructive. In the first quarter, North America already shows +8% for Gucci, while Asia-Pacific and Western Europe remain in decline.
In the second quarter, Kering reports that all regions are improving. North America remains the main driver of growth, while Western Europe and Asia-Pacific are showing their first signs of recovery.
China , however, remains challenging, even though trends are improving over the course of the quarter. This distinction is crucial.
For many years, the perception of luxury was almost automatically conflated with that of Chinese consumption. Kering's Q1 2026 report, on the contrary, reveals a much more fragmented market: North America can act as the driving force, Europe can regain momentum, and parts of Asia can progress, even as mainland China remains under pressure.
Kering is simultaneously working on its presence in the Chinese ecosystem. Its investment in ICICLE, announced in April 2026, is part of this strategy, already analyzed in our article dedicated to Kering's bet on Chinese quiet luxury with ICICLE.
Saint Laurent returns to growth
Gucci naturally attracts the most attention, but the group's improvement also relies on its other brands. Saint Laurent returned to growth in the first half of 2026, with an acceleration in the second quarter in all regions except Asia-Pacific. Kering particularly highlighted the performance of North America and Western Europe.
The new collections are gaining traction, and improved product availability and in-store execution are supporting demand from VICs(Very Important Clients) as well as from core customers. This last point deserves attention.
The luxury sector has focused heavily on its best clients in recent years. This makes sense: they offer greater resilience during downturns. But a major brand cannot become solely an exclusive club reserved for a select few.
It must maintain a sufficiently broad core customer base, capable of buying a bag, shoes, ready-to-wear or an accessory without belonging to the absolute top of the wealth pyramid.
Saint Laurent's strategy aims precisely to deepen this architecture: daytime wardrobe, strengthened men's offering, higher-end leather goods and development in Asia.
This retail dimension is also linked to the expansion of experiential concepts such as Saint Laurent Rive Droite in China, where the store becomes as much a cultural space as a point of sale.
Bottega Veneta confirms the power of "deep luxury"
Bottega Veneta stands out with a different approach.
The House benefited in the second quarter from an acceleration in all regions, particularly thanks to leather goods.
ReconKering defines Bottega as one of the preferred vehicles of " deep luxury " based on discretion, craftsmanship, sustainability, and cultural depth. Its Intrecciato remains, of course, at the heart of this strategy.
This positioning is particularly well suited to the current context.
As consumers become more selective, products that are instantly recognizable without relying on a giant logo gain relevance. Leather, feel, weaving, cut, and construction once again become the primary selling points.
Bottega Veneta thus illustrates a form of silent but very materialized luxury, where the value is read in the object itself.
Balenciaga and McQueen remain more focused on reconstruction
Not all of Kering's brands are progressing at the same pace. Balenciaga is experiencing a more challenging second quarter as the House continues its creative transition and rebalancing. However, Kering maintains that leather goods remain a key strength.
For McQueen, the logic is even more clearly that of a reset. The group wants to refocus the brand on its British sartorial identity, particularly tailoring, women's ready-to-wear and evening wear, while resizing its collections and its network of stores.
Gianfranco D'Attis was appointed CEO of McQueen on June 1, 2026.Here, success should not necessarily be measured in the short term by a dramatic increase in volume. A brand undergoing repositioning must first rediscover a clear proposition and a coherent distribution network before seeking to increase its reach.
Kering Jewelry becomes one of the most powerful drivers of the portfolio
Perhaps the most impressive figure of the first half of the year didn't come from fashion. Kering Jewelry reached €521 million in revenue in the first half of 2026, a 20% increase on a like-for-like basis. Retail jumped 28%, while wholesale and other revenues grew by 4%.
In the second quarter, business grew by a further 18% on a like-for-like basis. Boucheron achieved new records, particularly in Japan and Asia-Pacific. Pomellato maintained strong momentum in Japan and North America. Qeelin continued to grow, especially in Asia.
These performances reinforce the relevance of the creation, on March 16, 2026, of an integrated Kering Jewelry platform bringing together Boucheron, Pomellato, DoDo and Qeelin under the responsibility of Jean-Marc Duplaix.
We detailed the industrial and commercial stakes of this organization in our analysis: why Kering Jewelry is becoming a strategic pillar of the group.
This growth driver also allows the group to gradually reduce its economic dependence on fashion alone.
Jewelry has different timescales: a piece can become heritage, purchases are less directly linked to the calendar of collections and the perceived value relies heavily on the stones, precious metals, setting and know-how.
Kering Eyewear continues its much more consistent growth
Another, often less publicized, activity is Kering Eyewear. Its revenue reached €965 million in the first half of the year, up 8% on a like-for-like basis. Its current operating margin increased by 2.9 points to reach 23%.
The second quarter benefited in particular from Lindberg's anniversary collection, the relaunch of Maui Jim's eyewear line, and the launch of Valentino eyewear. This activity fulfills an interesting strategic function: it combines licensing, industrial capacity, distribution, and the expansion of the brand universe.
ReconKering also attributes to it an ambition in luxury connected glasses, notably thanks to the partnership with Google.
Kering's performance is thus becoming progressively more diversified: fashion, leather goods, jewelry, eyewear and new territories.
Retail, wholesale and e-commerce: fewer stores, but greater productivity sought
The return to growth comes even as Kering reduces its number of stores.
After 75 net closures in 2025, the group is making 84 more in the first half of 2026, representing a 5% reduction in the number of stores owned directly compared to the end of 2025. The annual target is around 100 net closures.
This figure is crucial for understanding the transformation. In the luxury sector, simply opening more and more stores is no longer necessarily the best strategy. Overly dense distribution increases fixed costs, weakens productivity per store, and can reduce the feeling of exclusivity.
Kering's logic is therefore to obtain more performance with a more selective network.
At the Group level, like-for-like sales from the company-owned network remained stable in the first half of the year, while wholesale and other revenues increased by 5%. However, a simplistic interpretation that pits retail against wholesale should be avoided.
The real challenge is control.
Owning a store provides control over image, merchandising, clienteling, and data. Wholesale, on the other hand, can offer geographic coverage and local expertise, provided that prices and product selection are maintained.
As for luxury e-commerce, it is now inextricably linked to physical retail. Customers can discover a product on Instagram, check its availability online, try it on in Paris, and then order it from London or New York. Therefore, the consistency of stock and pricing has become as strategic as the store's decor.
Luca de Meo applies a much more structured execution logic to Kering
The transformation now has a name: ReconKering.
Officially presented on April 16, 2026 in Florence, this strategy is based on a three-step sequence: Reset, Rebuild, Reclaim.
- Reset, by the end of 2026 : restructure, restore financial discipline and clarify the strategies of the Houses.
- Rebuild, by the end of 2028 : to regain sustainable growth and structurally improve profitability.
- Reclaim, by the end of 2030 : re-establish Kering among the leaders capable of defining the next generation of luxury.
To delve deeper into this architecture, see our analysis of the Capital Markets Day and Kering's new direction.
Five platforms to industrialize what can be industrialized without industrializing creativity
One of ReconKering's most interesting ideas lies in pooling resources. The group has defined five areas of expertise: Industry, Customer, Technology, Sustainable Development, and Support Functions. The goal is not to have a single team create Gucci, Bottega Veneta, or Saint Laurent.
The goal is to pool resources that do not culturally differentiate a House: logistics, purchasing, IT systems, data, certain industrial capabilities, quality control, or administrative functions. This distinction can become a major advantage. In the luxury sector, creativity must remain decentralized; efficiency does not necessarily need to be.
Kering thus wants to give more creative autonomy to the Houses while reducing the invisible frictions that slow down the product, distribution or customer relationship.
Customer intelligence powered by data and AI
ReconKering also plans to create a much more integrated customer infrastructure.
The group aims to combine proprietary and external data in a unified database, powered byartificial intelligence, in order to improve creative, sales forecasting, media, clienteling and commercial activation.
The topic may seem highly technical, but its impact is profoundly commercial. In a luxury boutique, a sales associate who knows a customer's preferred categories, size, previous purchases, and interests can transform a visit into a genuine relationship. On a large scale, data also allows for better forecasting of sales volumes.
But forecasting sales correctly means avoiding excess stock.
And avoiding excess stock in the luxury sector means simultaneously preserving profit margin, scarcity, and image.
The quality of the rebound is also reflected in the margin and cash flow
Revenue is only part of the story. The group's current operating income reached €921 million in the first half of 2026, with a margin of 12.8%, an improvement of 40 basis points. In other words, like-for-like growth returned as the margin recovered slightly.
This is exactly the type of combination to watch out for in a turnaround.
cash flow reached €2.6 billion, or €1.8 billion excluding real estate transactions and the contribution related to Gucci Beauty.
Even more spectacular: net financial debt falls to 3.3 billion euros on June 30, 2026, compared to 8 billion at the end of December 2025. The reduction therefore reaches 4.7 billion euros in just six months.
This decline is mainly due to the arbitrage carried out on the group's assets, including the sale of Kering Beauté to L'Oréal and certain real estate transactions.
Above all, it gives Kering more flexibility to invest in products, strategic stores, workshops, marketing and technology.
Gucci Beauty: a partnership that goes far beyond perfume
On July 7, 2026, Gucci and L'Oréal signed their exclusive 50-year beauty licensing agreement a year ahead of schedule, which is due to take effect in mid-2027.
This decision does not only concern perfumes or makeup.
Beauty is often the most accessible entry point into the world of a major fashion house. A Gucci fragrance reaches a much wider clientele than a handbag or a runway jacket.
A good beauty strategy can thus increase the visibility, international penetration and overall desirability of the brand, without requiring Gucci to manage all the associated industrial infrastructure itself.
Kering then conserves its energy and capital for the businesses where creative differentiation is most critical.
Materials, workshops and expertise: growth begins before the shop
ReconKering is also giving more weight to industry. Purchasing, suppliers, R&D, quality, manufacturing, and logistics need to be better coordinated at the group level. This is a crucial issue in the luxury sector.
A bag doesn't become desirable simply because a campaign claims it's exceptional. It truly must be: the quality of the leather, its grain, feel, the consistency of the dye, the cut, the stitching, the construction, the finish of the metals, the comfort, and its durability. The same logic applies to jewelry: gemology, setting, polishing, traceability, and mastery of precious metals all contribute directly to perceived value.
Kering is therefore pursuing a strategy of integrating certain expertise, notably with Raselli Franco in jewelry. This approach complements the reflections already developed on Luxe Daily regarding the heritage and expertise of Kering's brands.
Desirability is becoming a KPI almost as strategic as revenue
Another significant shift deserves attention: Kering now aims to measure the desirability of its brands. ReconKering plans a methodology based primarily on brand awareness, attractiveness, and image strength to compare each brand with its competitors and identify the key levers to activate. This approach perfectly illustrates the evolution of contemporary luxury.
A brand's performance begins well before the point of sale.
It is built when the press wants to photograph a collection, when a celebrity spontaneously wears a product, when a bag becomes recognizable from five meters away, when a store becomes a destination, and when a customer agrees to wait rather than buy a substitute.
This desirability premium also protects prices. And in a market where consumers are increasingly questioning the relationship between price and quality, it is probably one of the most valuable assets.
The risks haven't disappeared: Gucci, China, geopolitics, and execution
The semester is encouraging. However, it does not allow for any triumphalist conclusions.
Gucci remains in decline
The first risk remains obvious: Gucci is down another 5% compared to the first half of the year. The acceleration is strong, but it now needs to break through the zero line and become sustainable.
Mainland China remains fragile
China is showing signs of improvement at Gucci but remains a difficult market according to Kering in the second quarter.
A stronger recovery in this customer base could accelerate the turnaround. The opposite could slow it down.
The geopolitical context directly impacts sales
In the second quarter, Kering estimates that the crisis in the Middle East reduced the group's growth by about one percentage point . This region usually represents nearly 5% of retail sales.
This is a reminder of how dependent international luxury remains on tourist flows, air travel, currencies and geopolitical stability.
The main risk becomes that of execution
Kering now has a relatively clear strategy. It remains to be seen whether it will be executed.
Luxury brands do not tolerate constant changes of direction well: altering collections, prices, directors, boutiques, or communication too frequently can make a brand incomprehensible. The group must therefore find a balance between rapid transformation and cultural stability.
What can the second half of 2026 reveal?
The second half of 2026 will be a much more demanding test. The first, favorable scenario would be one of continued acceleration for Gucci until a return to comparable growth, accompanied by Saint Laurent, Bottega Veneta, Kering Jewelry and Eyewear remaining in the black.
In this case, S1 would retrospectively appear as the true inflection point.
A second scenario would see Gucci continue to improve without a sustained return to growth. The group would then progress further thanks to the diversification of its portfolio, particularly in jewelry and eyewear. This would represent a normalization, but not yet a complete recovery.
Finally, a slowdown in the US or a further deterioration in demand in China could make the trajectory more erratic.
Management itself remains cautious: Kering continues to refer to an uncertain macroeconomic and geopolitical environment and maintains its objectives of returning to growth and improving profitability.
Kering in H1 2026: the start of a new cycle rather than a victory already secured
The first half of 2026 does not yet mark Kering's return to the hypergrowth years. It tells a more interesting story: a group that is beginning to rebuild its fundamentals.
Comparable sales returned to positive territory. Retail accelerated. Gucci significantly reduced its decline. Saint Laurent returned to growth. Bottega Veneta progressed. Jewelry jumped 20%. Eyewear advanced 8%. The group's margin improved and net debt decreased sharply.
Above all, the figures are starting to align with the decisions taken since Luca de Meo's arrival: simplification, network rationalization, work on the offer, priority given to the customer, operational pooling and the return of the product to the center.
The word "growth" must therefore be used with precision. Kering has indeed returned to comparable growth in the first half of 2026, but Gucci, its main fashion asset, is not yet fully there.
This is precisely what makes the coming quarters interesting.
If Gucci transforms its sequential improvement into real growth while preserving its margin and desirability, the first half of 2026 can be considered the moment when the turnaround ceased to be a promise and became a trajectory.
For now, Kering has not completed its turnaround.
But for the first time in a long time, the direction of the indicators is starting to tell the same story as the strategy.
Official French sources
- Kering – 2026 Half-Year Results
- Kering – ReconKering, True Luxury. Next Luxury
- Kering – First Quarter 2026 Revenue
