Kering (KER) Q4 2024 earnings summary

Executive summary

• 2024 revenue declined 12% year-over-year to €17.2 billion, with recurring operating income down 46% to €2.6 billion and net income group share at €1.1 billion, reflecting challenging luxury market conditions and adverse channel mix.

• Brand elevation and quality improvements were prioritized, especially at Gucci, with a focus on balancing heritage and fashionability.

• Major organizational changes included new CEOs and artistic directors at key houses, and intensified operational efficiency.

• Free cash flow from operations was €1.4 billion, or €3.6 billion excluding real estate, supported by disciplined capex and strong working capital management.

• The group is targeting stabilization in 2025, with a gradual return to profitable growth expected thereafter.

Financial highlights

• Full-year revenue was €17.2 billion, down 12% year-over-year in both reported and comparable terms.

• Recurring operating income was €2.6 billion, down 46% year-over-year, with a margin of 14.9%.

• EBITDA dropped 29% to €4.7 billion; recurring operating margin contracted to 14.9% from 24.3% in FY23.

• Free cash flow from operations was €1.4 billion; excluding real estate, it rose 7% to €3.6 billion.

• Net financial debt at year-end was €10.5 billion, or 2.3x EBITDA.

Outlook and guidance

• 2025 is expected to be a year of stabilization, with modest or flat top-line growth and EBIT stabilization.

• Sequential improvement is anticipated in H2 2025, driven by new product launches and operational efficiencies.

• Focus remains on organic growth, market share gains, and continued investment in brand equity, supply chain, and selective M&A.

• Ambition to regain gross margin basis points in FY25, excluding FX/hedging.