Kering (KER) Q2 2025 earnings summary

Executive summary

• Revenue declined 16% year-over-year to €7.6 billion in H1 2025, with recurring operating income down 39% to €969 million and a 12.8% margin, reflecting a challenging luxury market and ongoing cost optimization.

• Net income attributable to the Group fell 46% to €474 million, with recurring EBITDA down 23% to €2,011 million.

• Major strategic actions included asset sales, a real estate partnership, and significant leadership changes at Gucci, Balenciaga, and the Group CEO.

• Cost discipline measures included 41 net store closures and an 11% reduction in group OPEX.

• The Group maintained a strong financial position, with €4.2 billion in cash and a BBB+ credit rating.

Financial highlights

• Recurring operating margin dropped 470 basis points to 12.8%; recurring EBITDA margin fell 2.3 points to 26.5%.

• Free cash flow from operations reached €2.4 billion, including €1.3 billion from real estate transactions.

• Net debt reduced to €9.5 billion from €10.5 billion at year-end 2024; net debt/EBITDA at 2.3x (pre-IFRS 16: 3.4x).

• CapEx was €431 million, down 20% year-on-year (excluding real estate), with CapEx to sales at 5.2%.

• Basic and diluted EPS for H1 2025 were €3.86, down from €7.16 in H1 2024.

Outlook and guidance

• H2 EBIT margin expected to decline year-on-year, but less than in H1; gross margin for H2 anticipated to be similar to H1.

• OPEX for the full year projected to decrease mid to high single digits on a reported basis.

• Store network rationalization to continue, with net closures exceeding 80 units in 2025 and further adjustments planned for 2026–2027.

• Focus remains on profitable long-term growth, with vigilance on cost control, selective investments, and balance sheet management.

• Proactive refinancing strategy with strong cash position (€4.2 billion) and €3.8 billion in undrawn credit lines.