Kering’s Rollercoaster Ride: Can the Fashion Giant Recover?

Kering SA, the behemoth of the fashion world, has been on a wild ride lately. Despite a dismal second quarter, with Gucci’s sales plummeting by double digits, the company’s stock price has shown signs of life. But don’t be fooled – the numbers don’t lie. Revenue is down, and analysts are sounding the alarm.

• 11 out of 14 analysts are advising a “hold” on the stock, while three are urging investors to sell.
• The average target price of analysts is lower than the current market price, a clear indication that the stock is due for a correction.

So, what’s behind the recent uptick in the stock price? Investors are pinning their hopes on a turnaround, and the appointment of new CEO Luca de Meo has been touted as a positive development. But let’s not forget the elephant in the room – the company’s weak earnings and Gucci’s sales disaster.

• Gucci’s sales drop is a major concern, and it’s not just a minor blip on the radar. The brand’s struggles are a symptom of a larger issue – a lack of innovation and a failure to adapt to changing consumer tastes.

The appointment of de Meo has been hailed as a game-changer, but let’s not get ahead of ourselves. The company is set to award him a significant welcome bonus, a move that’s sure to raise eyebrows. Is this a smart move, or just a desperate attempt to prop up the stock price?

The truth is, Kering’s future is far from certain. While the company’s stock price may be recovering, the underlying issues remain. Until the company addresses these concerns and shows a clear plan for growth, investors would do well to remain cautious. The writing is on the wall – Kering’s rollercoaster ride is far from over.