With Demna‘s first runway present for Gucci only some weeks away, sentiment appears to be brightening round prospects for Kering‘s linchpin luxurious property, which accounts for 39 % of group gross sales.
TD Cowen bumped up its forecasts for the Italian model – it expects 2 % progress within the first half of 2026, and 6 % within the second half – “as newness builds all year long,” Oliver Chen wrote in a analysis be aware Wednesday.
“We consider Gucci is again on the radar,” he stated. “Our take is that Gucci’s sequential enchancment and flat North America are encouraging.”
On Tuesday, Kering reported fourth-quarter revenues fell 9 % at reported trade charges to three.91 billion euros, representing a decline of three % in comparable phrases, beating consensus estimates.
Gucci additionally confirmed a sequential enchancment, with natural income declining 10 %, barely higher than the 11 % lower forecast by analysts, as reported.
TD Cowen is banking on a “speedy rollout cadence” for new Gucci merchandise by Demna, and “broader collections constructing” by way of the underside half of the 12 months.
A Gucci Flora perfume.
“We like (Kering’s) agility on model and product innovation, which constantly instills the corporate’s vogue heritage amongst every luxurious home,” Chen wrote, whereas cautioning that site visitors in Gucci shops “stays weak and newness remains to be early. Administration overhaul and inventive reset are optimistic, however execution danger is excessive given scale.”
TD Cowen maintains a maintain score on the Kering inventory, which was down 2.5 % in midmorning buying and selling on Wednesday after closing up 11 % on Tuesday.
Barclays, in the meantime, is bullish on Gucci’s prospects for a mega perfume franchise with its new magnificence licensee L’Oréal, which ought to get its arms on the model by 2028 on the newest.
Given L’Oréal’s monitor document in multiplying the revenues of Yves Saint Laurent and CeraVe tenfold since taking them over, Barclays estimates {that a} Gucci perfume enterprise of 5 billion euros “isn’t exterior the realm of the potential.”
The financial institution estimates Gucci perfume gross sales at present hover round 500 million euros underneath present licensee Coty.
“L’Oréal has constantly demonstrated its capacity to combine acquisitions efficiently and scale manufacturers into world powerhouses, having accomplished greater than 70 acquisitions over the previous 20 years,” stated the report, which listed analyst Warren Ackerman because the lead creator.
Barclays estimates that after solely 4 years of possession, L’Oréal has already multiplied Prada Fragrances by 5 occasions to greater than 500 million in revenues on the finish of 2024.
“L’Oréal’s capacity to scale and nurture manufacturers for the long run is firmly established,” Ackerman wrote. “That stated, if we take a look at what is occurring with Prada, L’Oréal is scaling it a lot quicker than YSL at the start, maybe as a result of it has realized what works and is ready to speed up progress over a shorter timeframe, keep away from pitfalls and reduce dangers.
“This doesn’t imply Gucci can be a certain factor however it provides us a excessive diploma of confidence that L’Oréal can ship a step change in Gucci’s efficiency when it will get the ‘keys’ to the model,” he added.
L’Oréal is scheduled to report its fourth-quarter revenues on Thursday after the shut of buying and selling on the Paris Bourse.
Bernstein maintains an underperform score on the inventory and analyst Luca Solca adopted a wait-and-see posture in a brand new report Wednesday, characterizing Demna’s fall 2026 runway as a “first acid check.
“We’d think about a optimistic response to the present by business consumers and influencers as a catalyst for a extra optimistic stance on the inventory,” he wrote. “Administration has indicated that they intend to shortly translate runway hype into in-store conversations and gross sales density.”
Bernstein lowered Gucci’s 2026 natural progress forecast to 4.4 % from 5 %, anticipating declines in wholesale progress.
