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Kering Sees Early but Fragile Turnaround as Gucci Sales Fall Less Than Expected

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Kering reported a smaller-than-expected decline in fourth-quarter sales, offering early signs of stabilisation under new CEO Luca de Meo, even as the luxury group cautioned that recovery remains fragile. Group revenue fell 3% year-on-year to 3.9 billion euros, beating forecasts for a steeper drop, helped by improving trends toward the end of the year. De Meo, who took charge after leading Renault, said momentum was “early, fragile, but real,” as he works to rebuild margins and confidence in the Gucci owner.

Gucci, which generates the bulk of Kering’s profits, posted a 10% revenue decline in the quarter—its 10th consecutive fall—but still outperformed expectations. Management said newly launched products and stronger handbag sales supported results, with some improvement seen across most regions. Despite these signs, profitability remains under pressure, with group operating margins sliding to 11% and Gucci’s to 16%, far below levels seen three years ago and trailing rivals such as LVMH.

The results underline the scale of the turnaround facing de Meo, as Kering grapples with high debt, restructuring costs, and years of weakening demand following shifts in fashion trends. The company has closed dozens of stores, cut operating costs, and sold its beauty business to shore up the balance sheet, bringing net debt to about 8 billion euros. While investors have welcomed balance-sheet repairs, analysts say a sustained recovery will ultimately depend on Kering’s ability to reignite sales growth at Gucci.

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Apple Hits Record iPhone Sales as Macs and Wearables Slip

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Apple reported its strongest-ever iPhone sales in the final quarter of last year, driven by high demand for the new iPhone 17 lineup. Overall revenue jumped 16% year-on-year to $144bn, marking the company’s fastest growth since 2021. Sales surged across key markets including China, Europe, the Americas, Japan, and India, where Apple posted a record quarter. CEO Tim Cook said demand was so strong that Apple is currently constrained by supply.

Not all parts of the business shared in the success. Sales of wearables and accessories, such as Apple Watch and AirPods, fell by around 3%, while Mac computer sales dropped just over 7%. Analysts say Apple’s dominance in smartphones is facing growing uncertainty, particularly as competition intensifies and consumer expectations evolve.

Investors are closely watching Apple’s next steps in artificial intelligence, especially following its newly announced partnership with Google’s Gemini AI for future Siri upgrades. While Apple plans to spend $16bn on infrastructure and retail expansion next year, its AI investment remains modest compared to rivals like Microsoft. That cautious approach comes as Microsoft’s heavy AI spending has recently rattled investors, sending its shares sharply lower.

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STMicro Sees Clearer 2026 Outlook as Restructuring Costs Persist

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STMicroelectronics forecast first-quarter revenue slightly above market expectations, citing improving visibility and signs of recovery in its key end markets, but warned that restructuring costs will continue to weigh on results through 2026. The Franco-Italian chipmaker said it expects revenue of about $3.04 billion in the first quarter, ahead of analysts’ average estimate of $2.99 billion, lifting its shares in early trade.

The company reported fourth-quarter net income of $125 million, well below both analysts’ expectations and last year’s result, after booking a $141 million impairment linked to restructuring. Excluding the charge, profit would have been $266 million. STMicro said demand in its core automotive, industrial and consumer electronics markets has begun to stabilise as inventory corrections ease after a prolonged post-pandemic slowdown.

However, the group cautioned that the impact of its European manufacturing overhaul will be felt across every quarter of 2026. The restructuring involves shifting production away from older facilities in France and Italy toward newer sites, with finance chief Lorenzo Grandi saying costs will remain elevated even as operational charges gradually decline, supporting margin improvement over time.

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