Business
Hermes and Kering Shares Slide as Sales Disappoint
Shares in French luxury groups Kering and Hermès tumbled on Wednesday, April 15, after both companies reported weaker-than-expected sales, partly due to the impact of the Middle East war on a key regional market.
By around 10 a.m. on the Paris stock exchange, Kering had dropped 10.1% to €251.80, while Hermès fell 10.5% to €1,601.
Kering’s Gucci Drags Despite Improvement
Kering’s first-quarter revenues fell 3% at constant currency, weighed down once again by its flagship brand Gucci, where sales declined 8%. Although that marked an improvement from the 10% drop in the final quarter of 2025, analysts had forecast a smaller decline of just 6–7%.
The results heighten pressure on Kering’s new CEO, Luca de Meo, who was appointed last year to revive Gucci in collaboration with Georgian creative director Demna. De Meo is set to host a closely watched strategy presentation in Florence, Italy, on Thursday, dubbed “ReconKering.”
“While the group’s trajectory is clearly moving in the right direction under the new CEO, the recovery at Gucci is not yet visible in the numbers, and the timing remains uncertain,” said Jean Danjou, an analyst at Oddo BHF, in a research note.
Kering also warned that revenues in the Middle East had been hit by the war triggered by US-Israeli strikes on Iran in late February. Retail revenue in the region fell 11% in the first quarter, despite growth in the first two months of the year.
‘Everything Stopped’: War Hits Hermès Too
Weaker Middle Eastern sales, combined with the loss of high-spending tourists from the region to Europe due to travel disruptions, also affected Hermès. The brand’s sales fell 1.4% to €4.1 billion ($4.8 billion), which the company attributed in part to a “significant” currency impact of €290 million, as a strong euro made its coveted handbags and other products more expensive.
Excluding currency effects, revenues rose 5.6% in the quarter—still below market expectations.
Growth for leather goods, by far Hermès’s biggest profit driver, stood at 9.4% at constant rates, while analysts at Bernstein had expected over 10%. Ready-to-wear sales rose just 0.4%, well below Bernstein’s estimate of nearly 5%.
The Middle East war cost Hermès “nearly 1.5 percentage points of growth,” Chief Financial Officer Eric du Halgouet told journalists on a conference call. “We had very good double-digit growth in January and February, but everything stopped in March, with our business down 40%,” he said, adding that sales in Britain, Italy, and Switzerland had also suffered from the absence of Middle Eastern clients.
