Kering unveils plan to double margins after years of Gucci slowdown
Synopsis
Kering profit margin target is focusing attention on US and China demand trends as the company works to double operating margins. With Gucci showing early stabilisation and global luxury growth slowing, the group is relying on cost control and pricing discipline to improve profitability.
Kering profit margin target reflects efforts to double margins as Gucci stabilises. Slower US demand and uneven China recovery continue to shape the company’s financial outlook.
Key Highlights
- Kering profit margin target aims to double margins from current mid-teens levels
- US luxury demand softens while China recovery remains uneven, affecting global outlook
- Bain report shows global luxury growth slowing to low single digits in 2025
- Gucci stabilisation is critical to Kering’s revenue and margin recovery strategy
Kering profit margin target is drawing attention as the luxury group aims to double its operating margin from current mid-teen levels, signalling a push to restore profitability after recent declines.
The update comes as Kering reports early signs of stabilisation in sales, particularly at Gucci, which has been central to weaker group performance over the past year.
Margins fall below sector leaders
Kering’s operating margin has dropped to the mid-teens in recent financial results, down from above 25% in earlier periods.
The decline reflects softer demand and weaker sales at Gucci, which remains the group’s largest contributor.
The Kering profit margin target is aimed at closing the gap with peers such as LVMH and Hermès, which continue to report higher margins.
The company plans to rely on cost control, pricing adjustments, and tighter distribution to improve profitability.
Luxury slowdown reshapes demand trends
The Kering profit margin target comes at a time when global luxury demand is moderating.
According to the Bain & Company Luxury Goods Worldwide Market Study 2025, industry growth has slowed to low single digits after a post-pandemic surge.
Spending trends have softened in key regions. China’s luxury demand has slowed due to economic pressures, while the United States has seen more cautious discretionary spending. Europe has remained relatively stable, supported by tourism flows.
Recent earnings updates across the sector, including from major luxury groups, have also pointed to uneven demand and increased focus on margins over expansion.
Gucci recovery remains critical
The Kering profit margin target depends heavily on Gucci’s turnaround. The brand has reported declining sales in recent quarters, though the pace of decline has started to ease based on the latest updates.
Kering said improving sales trends support confidence in its strategy reset.
The Kering profit margin target will rely on sustained recovery at Gucci alongside performance improvements across other brands.
FAQs
Q1. What is Kering’s profit margin target?
Kering aims to double its operating margin from current mid-teen levels over time.
Q2. Why is Gucci important to Kering’s recovery?
Gucci is Kering’s largest brand and a major driver of revenue and profitability.
Q3. What is affecting Kering’s recent performance?
Slower global luxury demand and weaker Gucci sales have impacted revenue and margins.
Q4. How is the luxury market performing currently?
Growth has slowed to low single digits, with weaker demand in China and cautious spending in the United States.
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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