Gucci's Sales Slide Deepens as China Slump Tests Kering's Turnaround

Gucci's sales decline showed no sign of easing in the third quarter, with revenue falling 6% to €1.29 billion ($1.44 billion), in line with analyst expectations but a fresh blow to parent company Kering's attempt to turn the Italian fashion house around. The brand has now posted falling sales for more than three straight years.

China traffic still the core problem

Weak store traffic in China remains the biggest drag on Gucci's results, with revenue from the brand's own stores down 9% even as wholesale and licensing revenue ticked up. Kering's group-wide revenue, which also includes brands such as Saint Laurent and Bottega Veneta, fell 1% on a currency-adjusted basis for the quarter.

The soft results come as peers including LVMH and Hermes also reported lower-than-expected quarterly sales, with signs of cooling demand even in the U.S. adding to investor unease about the broader luxury sector. Kering has been cutting back Gucci's physical footprint as part of the turnaround plan, closing 105 stores so far and targeting 125 closures by year-end, a retrenchment aimed at steadying the brand before trying to grow it again.