S&P Downgrades Kering Outlook to Negative on Weak Gucci Sales

S&P Global Ratings revised its credit outlook for French luxury goods group Kering to negative from stable, citing weaker sales of its Gucci brand and other products in the first half of 2025.

The report highlighted a slowdown in consumer demand for Kering’s luxury apparel across key markets, with a 22% year-on-year revenue decline in the Asia-Pacific region, including China. Sales of the company’s flagship Gucci brand, which accounted for more than half of Kering’s core earnings in 2024, fell 25% during the period.

S&P noted that Kering has underperformed peers such as LVMH, Dior, and Hermès so far this year. The agency maintained the group’s long-term issuer credit rating at BBB+, near the lower end of the high-grade spectrum.

“The negative outlook reflects Kering’s reduced rating headroom amid ongoing pressures on operating performance and execution risks associated with the company’s turnaround initiatives in a subdued industry environment,” S&P analysts wrote.

In June, Kering named Luca de Meo, former CEO of Renault Group, as its new chief executive. He is set to take office in mid-September.