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 margin at 12.8%; net income attributable to the Group was €474 million.

• Free cash flow from operations reached €2.4 billion, including €1.3 billion from real estate transactions; net financial debt reduced by €1 billion to €9.5 billion since year-end 2024.

• Significant cost optimization led to group OPEX down 11% reported, with over €550 million in savings and 41 net store closures; store network rationalization target raised to 80 units for the year.

• Major governance and creative leadership changes included the appointment of Luca de Meo as CEO and new creative directors at Gucci and Balenciaga.

• Strategic asset sales, real estate partnerships, and ongoing operational restructuring supported financial flexibility.

Financial highlights

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

• Free cash flow from operations surged to €2.4 billion, mainly due to real estate disposals; CapEx was €431 million, down 20% year-over-year.

• Net income, group share, was €474 million, down from €878 million in H1 2024; EPS dropped to €3.86 from €7.16.

• Net financial debt at €9.5 billion; net debt-to-EBITDA ratio of 2.3x (excluding leases).

• Dividend payout in H1 2025 was €736 million, a substantial decrease year-over-year.

Outlook and guidance

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

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

• OPEX for the full year anticipated to be down mid to high single digits on a reported basis; FY25 CapEx guidance around €1 billion.

• Wholesale revenue decline to moderate in H2; store closures to continue into 2026 and 2027.

• Continued investment in brand desirability, exclusivity, and creative innovation.