Kering Surges on Gucci Turnaround Hopes While Hermès Slides

French luxury stocks diverged sharply on Wednesday as investors reacted to contrasting quarterly reports from Kering and Hermès. Kering's shares soared on optimism that its flagship Gucci brand is on the path to recovery, while Hermès' stock slid amid concerns over its relative growth momentum.

Kering Rallies on Gucci Improvement

Shares in Kering (PRTP) jumped by more than 12% after the company reported quarterly sales and recurring operating profit that surpassed analyst expectations. The positive reaction was largely driven by an improved performance at its main brand, Gucci.

Gucci's second-quarter revenue saw an organic decline of 2%, marking its 12th consecutive quarterly fall. However, this result was better than analysts had feared and showed a significant improvement from the previous quarter, fueling hopes that CEO Luca de Meo's turnaround strategy is taking hold. Following the report, analysts at HSBC upgraded Kering's stock to Buy from Hold, stating the company is "moving in the right direction."

Hermès Falters on Growth Concerns

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In contrast, shares of Hermès (HRMS) tumbled nearly 9% after its financial update left investors questioning the company's growth outlook. The luxury goods maker reported a 6.7% rise in second-quarter sales in currency-adjusted terms to €4.1 billion, which was in line with market expectations.

Despite the solid result, analysts noted that the pace of growth was a concern. JPMorgan highlighted that Hermès' growth is accelerating less sharply than its peers, which "continue to drive question marks" among investors about its short- and long-term trajectory.

Broader Sector Context

The mixed results on Wednesday follow a muted report from industry bellwether LVMH earlier in the week. The broader sector saw varied performance, with LVMH shares edging up around 1% and Moncler rising 2.7%, while Richemont fell 1%, underscoring the divergent investor sentiment across the luxury goods market.