Published by Global Banking & Finance Review®
Posted on April 16, 2026
2 min readLast updated: April 16, 2026
Add as preferred source on GoogleKering, Gucci’s owner, plans to double its recurring operating profit margin from 11.1% in 2025 to align with industry leaders, and aims to restore its fundamentals by end‑2028 under a new strategy by CEO Luca de Meo.
By Tassilo Hummel
FLORENCE, April 16 (Reuters) - Kering CEO Luca de Meo pledged to more than double operating profit margin at the Gucci-owner as he unveiled his turnaround strategy on Thursday aimed at restoring financial health and brand appeal.
Doubling recurrent operating returns, which last year stood at 11%, would bring Kering closer in line with industry peers.
The French group at its peak in 2022 saw an operating margin of 27.5%, mainly driven by a boom at Italian flagship brand Gucci, which subsequently stalled.
Gucci, which accounted for around 60% of Kering's profit last year, would improve its product quality and sharpen its regional sales strategy, Kering said in a press statement, without giving financial targets for the brand.
De Meo will present the full details of his plan to investors later on Thursday.
The French conglomerate said it would keep its current policies on capital expenditures and annual dividends while significantly bringing down inventories.
Kering also said it would seek to bundle key tasks like production oversight and technology in "hubs" and fully restore its fundamentals and brand desirability by the end of 2028.
The French conglomerate said it would take a "highly selective" approach on acquisitions, aiming to secure product quality and supply chains.
Seven months into the job, de Meo needs to reassure investors that his ambitious turnaround won't be derailed by the Middle East conflict's fallout on luxury spending.
Kering, as well as its rivals LVMH and Hermes, all said this week that the conflict shaved off a large part of sales in the Gulf region while also impacting their business indirectly through reduced travel activity.
"A turnaround story is easier to execute when the macro environment is booming," said Soliane Varlet, equity portfolio manager at Mirova.
Quarterly sales at Gucci continued their slide going into the year, Kering said on Tuesday.
The outcome disappointed investors looking for tangible - and so far hard to find - signs that the brand's revamp under a new designer and management structure is bearing fruit.
(Reporting by Tassilo Hummel; Editing by Makini Brice and Elaine Hardcastle)
Kering pledged to double its recurring operating profit margin from 11.1% over the medium-term.
Kering aims to fully restore the group's fundamentals by the end of 2028.
The plan aims to revive growth and desirability after years of underperformance.
Quarterly sales at Gucci have continued their slide going into this year.
At its 2022 peak, Kering's operating margin was 27.5%, mainly driven by Gucci.
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