Gucci's future is looking brighter, and the fashion world is buzzing with anticipation. With Demna's highly anticipated debut runway show for the iconic Italian brand just around the corner, there's a renewed sense of optimism surrounding Kering's flagship luxury label.
TD Cowen, a leading financial institution, has increased its forecasts for Gucci, predicting a 2% growth in the first half of 2026 and a robust 6% in the latter half. Oliver Chen, in his insightful research note, attributes this growth to the exciting new products and collections that will be unveiled throughout the year.
"Gucci is back on the radar," Chen asserts. "The brand's sequential improvement and its resilience in North America are certainly encouraging signs."
Kering's recent financial report for the fourth quarter of 2025 shows a decline in revenues, but it still managed to beat consensus estimates. Gucci, too, demonstrated a positive sequential trend, with organic revenue decline slightly better than analysts' forecasts.
TD Cowen is placing its bets on Demna's rapid rollout of new Gucci products and the expansion of broader collections in the latter half of the year.
"We appreciate Kering's agility in brand and product innovation," Chen wrote. "The company consistently infuses its fashion heritage into each luxury house. However, we must acknowledge that traffic in Gucci stores remains weak, and the brand's newness is still in its early stages. While the management overhaul and creative reset are positive steps, the execution risk is high given the scale of the operation."
Despite the positive outlook, TD Cowen maintains a hold rating on Kering's stock.
Meanwhile, Barclays is bullish on Gucci's prospects for a mega fragrance franchise in collaboration with its new beauty licensee, L'Oréal. Given L'Oréal's impressive track record in multiplying the revenues of Yves Saint Laurent and CeraVe tenfold since acquiring them, Barclays estimates that a 5 billion euro Gucci fragrance business is within the realm of possibility.
"L'Oréal has consistently proven its ability to successfully integrate acquisitions and scale brands into global powerhouses," the Barclays report stated. "With over 70 acquisitions completed in the past 20 years, L'Oréal's expertise in this area is undeniable."
The bank estimates that Gucci's fragrance sales currently stand at around 500 million euros under the current licensee, Coty.
Barclays further highlights L'Oréal's ability to nurture brands for the long term, citing its successful scaling of Prada Fragrances, which grew fivefold in just four years of ownership, reaching over 500 million in revenues by the end of 2024.
"L'Oréal's track record speaks for itself," Warren Ackerman, the lead analyst on the report, wrote. "Their ability to accelerate growth, avoid pitfalls, and minimize risks is impressive. While it doesn't guarantee success for Gucci, it certainly boosts our confidence in L'Oréal's ability to bring about a significant improvement in the brand's performance."
L'Oréal is set to report its fourth-quarter revenues on Thursday, providing further insights into the potential of this exciting partnership.
Bernstein, however, maintains an underperform rating on the stock, with analyst Luca Solca describing Demna's fall 2026 runway as a "first acid test."
"A positive reaction to the show from industry buyers and influencers could be a catalyst for a more optimistic stance on the stock," Solca wrote. "Management has expressed their intention to swiftly translate runway hype into tangible in-store conversations and sales."
Bernstein has lowered Gucci's 2026 organic growth forecast to 4.4% from 5%, anticipating a decline in wholesale growth.
As the fashion industry eagerly awaits Demna's debut, the question remains: Will Gucci's comeback be a success? Only time will tell, but the signs are certainly promising. The future of this iconic brand is an exciting journey, and we invite you to join the conversation and share your thoughts on this potential fashion renaissance.
