Luca de Meo’s short tenure in Kering’s C-suite — he’s only been chief executive officer since Sept. 15 — has already brought the ailing luxury giant something it’s needed in the stock market.
Momentum.
Shares of Kering rose 8.7 percent to 344.95 euros in Paris on Thursday as investors took what were seen as glimmers of hope in third-quarter results and ran.
The run-up left Kering with market capital of more than 42 billion euros. It was the best stock performance among the 98 global fashion, luxury and retail stocks tracked by WWD.
Oliver Chen, a stock analyst at TD Securities, is fingers-crossed that the “encouraging glimmers continue.”
Kering’s largest brand, Gucci, saw sales fall 14 percent in the third quarter — which was better than the 15 to 16 percent drop analysts forecast and much better than the 25 percent decline in the second quarter.
“Kering’s prudent focus is innovating with newness at Gucci at core and new product; leveraging Demna’s talent and good traction thus far as both need to drive less negative and hopefully positive traffic in 2026,” Chen said, referring to the brand’s new creative lead. “We also believe Kering is setting itself up for better performance and focus with a speedier and more disciplined supply chain, which is a good concept for all companies.”
He has a “hold” rating on the stock as “the Gucci brand — approximately 39 percent of Kering’s sales — remains in a transition period with the new creative director.”
De Meo plans to lay out his broader vision for Kering next year, but he has already been extremely busy and has clearly been given a free hand to sharply change the company’s strategies.
Already he pushed back the timeline on a potential takeover of all of Valentino and on Sunday inked a deal to sell the beauty business to L’Oréal for 4 billion euros.
Chen said the beauty deal would help the company shore up its balance sheet, which according to S&P Capital IQ is carrying total debt of 19.9 million euros, including more than 6 billion euros in leases.
The stock market result has been a tour de force. Shares of Kering are up 52.9 percent since de Meo took the helm.
Of course, investors are prone to make quick moves and are often erratic over the short term, jumping in on the stock of a company that has good brands, but is in transition as soon as there’s some movement.
Longer term, much will depend on how de Meo plans on following up his whirlwind first five weeks with a long-term strategic vision.
On Thursday at least, Kering was leading the way higher. Among the other fashion gainers for the day were: Gap Inc., up 6.2 percent to $23.03; LuxExperience, 5.6 percent to $9.22; Victoria’s Secret & Co., 5.3 percent to $32.74; American Eagle Outfitters, 5.3 percent to $16.56, and VF Corp., 3.9 percent to $15.89.