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Kering Sa Unsponsored ADR (PPRUY)
OTHER OTC:PPRUY
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Kering
(OTC:PPRUY)
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Rating:53Neutral
Price Target:
$34.00
▼(-10.10% Downside)
Action:ReiteratedDate:02/18/26
The score is held back primarily by weakened financial performance (material revenue decline and profitability reset) and constrained flexibility from elevated leverage during an earnings downturn. Offsetting this, the earnings call outlined credible operational and balance-sheet actions with 2026 improvement guidance, while technicals appear neutral and valuation is a significant negative due to the very high P/E.
Positive Factors
Portfolio Diversification & Resilient Houses
Kering's diversified brand mix and strong segments (notably Bottega, Saint Laurent and Kering Eyewear) reduce reliance on any single house. Durable revenue and margin contributions from multiple maisons and eyewear create structural resilience and a platform to reallocate investment into higher-return areas.
Cost Savings and Retail Optimization
Material OpEx savings, targeted store closures and inventory/CapEx discipline materially shrink the cost base and working capital needs. These structural actions improve long-term margin sustainability, enable reinvestment in creativity, and raise returns on a smaller, higher-quality retail footprint.
Cash Generation and Deleveraging Path
Positive free cash flow and meaningful net debt reduction show the group's ability to self-fund repairs and distributions. The planned Beaute disposal and continued FCF provide a durable path to materially lower leverage, restoring financial flexibility and capacity for strategic investment over the medium term.
Negative Factors
Top-line Pressure and Regional Weakness
Sustained revenue declines, especially in key APAC markets, erode scale advantages and reduce pricing leverage. Prolonged top-line weakness can impair long-term brand investment and slow margin recovery, meaning restored growth may take multiple quarters and require continued restructuring to regain prior momentum.
Elevated Leverage and Debt Concentration
A balance sheet where debt exceeds equity constrains strategic optionality during a profit downturn. High leverage raises refinancing and interest risks, limits M&A or growth funding without further asset sales, and makes the group more sensitive to macro shocks until the targeted deleveraging is completed.
Profitability Deterioration and Weaker Cash Conversion
Sharp margin compression and lower operating cash flow indicate weaker operating leverage and poorer conversion of sales into cash. This structural earnings hit reduces reinvestment capacity and slows deleveraging, requiring sustained margin recovery initiatives to restore long-term earnings power and cash resilience.
Kering (PPRUY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$41.42B
Dividend Yield1.91%
Average Volume (3M)30.78K
Price to Earnings (P/E)506.8
Beta (1Y)0.98
Revenue Growth-14.09%
EPS Growth-64.67%
CountryUS
Employees44,627
SectorConsumer Cyclical
Sector Strength84
IndustryLuxury Goods
Share Statistics
EPS (TTM)0.15
Shares Outstanding1,234,207,800
10 Day Avg. Volume26,987
30 Day Avg. Volume30,779
Financial Highlights & Ratios
PEG Ratio-5.42
Price to Book (P/B)2.48
Price to Sales (P/S)2.59
P/FCF Ratio22.61
Enterprise Value/Market Cap1.31
Enterprise Value/Revenue3.72
Enterprise Value/Gross Profit5.12
Enterprise Value/Ebitda9.31
Forecast
1Y Price Target
$22.00Price Target Upside-41.83% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)0.88
Revenue Forecast (FY)$17.81B
Kering Business Overview & Revenue Model
Company DescriptionKering SA develops, designs, manufactures, markets, and sells apparel and accessories. The company offers shoes; leather goods, including handbags and wallets, purses, and other leather products; eyewear, textile accessories, etc.; and jewelry and watches, as well as ready-to-wear products for men and women. It also provides perfumes and cosmetics. The company provides Gucci, Saint Laurent, Bottega Veneta, Alexander McQueen, Balenciaga, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Girard-Perregaux, Ulysse Nardin, and Kering Eyewear branded products. It sells its products through stores and e-commerce sites. As of December 31, 2021, it operated 1,565 stores. Kering SA sells its products in the Asia-Pacific, Western Europe, North America, Japan, and internationally. The company was formerly known as PPR SA and changed its name to Kering SA in June 2013. Kering SA was founded in 1963 and is based in Paris, France.
How the Company Makes MoneyKering generates revenue primarily through the sale of high-end fashion and luxury goods, which includes ready-to-wear apparel, leather goods, and accessories. The company's revenue model is based on direct sales through its own retail network, e-commerce platforms, and wholesale distribution to select retailers. Key revenue streams include flagship store sales, online sales, and partnerships with high-end department stores. Additionally, Kering benefits from its strong brand equity and the growing global demand for luxury products, which allows for premium pricing. Strategic collaborations and limited-edition releases also contribute to its earnings, along with a focus on expanding its presence in emerging markets where luxury consumption is on the rise.
Kering Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Neutral
The call balanced clear evidence of a difficult 2025 — double-digit top-line declines for the group and significant EBIT compression — with decisive strategic actions and tangible operational improvements. Management highlighted successful cost-savings (EUR 925m), inventory reduction (‑8%), meaningful deleveraging (EUR 2.5bn net debt reduction to EUR 8bn), and early sequential sales momentum (Q4 at -3% comps, AUR up). Select houses (Bottega, Saint Laurent, Kering Eyewear) and the jewelry division showed resilience and growth. However, material challenges remain (notably Gucci’s large revenue decline, wholesale contraction, losses at some brands, and sizeable nonrecurring charges). Overall, the narrative is constructive about the turnaround path but the near-term financials remain challenged.Q4-2025 Updates
Positive Updates
Cost Savings and OpEx Reduction
Delivered EUR 925 million in cost savings in 2025, reducing OpEx base by 9% versus 2024 and >EUR 1 billion OpEx savings over two years, enabling reinvestment in creativity and brand initiatives.
Retail Footprint Optimization
Net closure of 75 stores in 2025 (1,719 stores year-end) to sharpen retail quality; plan for at least 100 net store closures in 2026 and targeted further rationalization (targeting ~-20% units vs 2025 mid term).
Inventory and CapEx Discipline
Year-end inventories reduced by 8% (2025) with further reductions expected in 2026; CapEx excluding real estate was EUR 0.8 billion, down almost 30% (CapEx/sales ratio 5.4%).
Cash Generation and Deleveraging
Free cash flow including real estate transactions EUR 4.4 billion; free cash flow excluding real estate EUR 2.3 billion (down vs prior year but positive). Net financial debt reduced by EUR 2.5 billion to EUR 8.0 billion; expected further significant reduction after Kering Beauté sale (EUR 4.0 billion inflow) with leverage moving toward ~1.0–1.5x.
Sequential Sales Momentum and Q4 Improvement
Sequential improvement across the year with full-year revenue (ex Kering Beauté) EUR 14.7 billion, down 10% comparable; Q4 showed marked improvement to -3% comparable with AUR (average unit retail) up high-single-digits and improved conversion rates.
Strong Performance in Select Houses and Divisions
Bottega Veneta: full-year revenue EUR 1.7 billion, +3% comparable and recurring operating income EUR 267 million (+5% y/y, 15.6% margin). Saint Laurent: EUR 2.6 billion revenue, -6% comparable, with a robust 20% recurring margin (EUR 529 million). Kering Eyewear: comparable revenue +3% to ~EUR 1.6 billion and operating income EUR 252 million (15.8% margin).
Jewelry Momentum and Strategic Verticalization
Jewelry houses strong in Q4 (e.g., Boucheron +mid-20s% comparable; Qeelin mid-teens). Progressive acquisition of Raselli Franco to strengthen industrial capabilities and scale in jewelry, signaling strategic focus on a high-growth, resilient category.
Strategic Partnership and ESG Credentials
Announced partnership with L'Oréal to accelerate beauty development and entry into wellness/longevity; Kering retained CDP Triple A rating for the third consecutive year, reinforcing sustainability as a competitive advantage.
Negative Updates
Top-Line Pressure and Full-Year Revenue Decline
Full-year revenue (ex Kering Beauté) EUR 14.7 billion, down 10% on a comparable basis and down 13% reported; geographic weakness notably Asia Pacific (-16% retail full-year) and Japan (-16% retail full-year).
Profitability Hit — Recurring EBIT Decline
Recurring operating income fell to EUR 1.6 billion, down 33% year-on-year, with EBIT margin diluted by 340 basis points to 11.1% (second-half margin dilution more contained at 120 bps).
Gucci Significant Decline
Gucci full-year revenue EUR 6.0 billion, down 19% comparable (22% reported). Retail -18% comparable for the year; wholesale -34% comparable. Q4 retail -10% comparable though showing sequential improvement. Gucci recurring operating income EUR 966 million (16.1% margin) but brand remains the primary drag on group sales.
Wholesale and E‑commerce Weakness
Wholesale for luxury houses declined 19% comparable in 2025 (as part of strategic rationalization). E‑commerce down 12% comparable (represented 11% of retail).
Losses and Restructuring at Some Houses
Other Houses recurring operating income was a loss of EUR 112 million in 2025, with Alexander McQueen generating important losses and undergoing deep restructuring (including 21 store closures). Balenciaga challenged though showing Q4 signs of improvement.
Nonrecurring Charges and One-Off Items
Nonrecurring result negative EUR 584 million (capital losses on some real estate deals, impairments, restructuring charges, EU Commission fine, reclassifications tied to assets held for sale).
Free Cash Flow and Operating Cash Pressure (Ex-Real Estate)
Net cash flow from operating activities EUR 3.1 billion, down 34% vs prior year; free cash flow excluding real estate EUR 2.3 billion, down 35% compared to 2024, reflecting earnings pressure and more limited working capital improvement.
High Effective Tax Rate and Remaining Headwinds
Tax rate on recurring income at 36% (above normative), driven by losses in the UK and one-offs; gross margin pressured by raw material costs (notably gold for jewelry) and unfavorable geographic mix—APAC decline was a drag on group gross margin.
Company Guidance
Management reiterated that 2026 should be a year of returning to growth and step‑by‑step margin improvement, built on the 2025 reset: FY25 revenue excl. Kering Beauté €14.7bn (‑10% comparable; Q4 ‑3% comp), recurring operating income €1.6bn (11.1% EBIT margin), free cash flow €4.4bn including real‑estate (€2.3bn excl.), net debt €8.0bn (‑€2.5bn YoY) and €925m of OpEx savings (‑9%). Near‑term actions guided include further inventory reductions (inventories ‑8% in 2025), a minimum of 100 net store closures in 2026 (75 net closed in 2025; mid‑term footprint target ~‑20%), prioritized CapEx (€0.8bn in 2025; 5.4% of sales), and balance‑sheet strengthening via the L’Oréal Beaute proceeds (expected to drive leverage to ~1.0–1.5x), with a 2026 tax rate ~33% normalizing to ~27–28% in 2–3 years. The Board also proposed a €3/share dividend plus a €1/share exceptional distribution tied to the Beaute disposal; brand metrics cited included Gucci €6.0bn revenue (‑19% comp; 16.1% EBIT margin), Saint Laurent €2.6bn (‑6% comp; 20% margin), Bottega €1.7bn (+3% comp; 15.6% margin) and Kering Eyewear ~€1.6bn revenue (15.8% margin).Kering Financial Statement Overview
Summary
Income statement is the key drag (sharp revenue decline and significant net income compression versus 2021–2023), while cash flow remains positive and provides some cushion despite weaker operating cash flow versus 2024. The balance sheet is workable but meaningfully levered (debt exceeding equity), which reduces flexibility during the downturn.Income Statement
Profitability has deteriorated sharply: revenue fell materially in 2025 (vs. 2024) and margins compressed meaningfully, with net income dropping to a very low level versus prior years. While gross margin remains positive, the multi-year trajectory shows weakening operating leverage and a significant step-down from the strong 2021–2023 profitability profile, raising concerns about near-term earnings stability.46
Neutral
Balance Sheet
The balance sheet is moderately levered, with debt consistently exceeding equity (debt-to-equity above 1 in 2023–2025). Total debt increased versus 2022 and remains elevated, reducing flexibility if the profit downturn persists. Offsetting this, equity is still sizable and assets have been broadly stable, suggesting adequate scale—but leverage is a clear constraint relative to the company’s recent earnings volatility.55
Neutral
Cash Flow
Cash generation remains a relative support: operating cash flow and free cash flow stayed positive in 2025 and free cash flow grew versus 2024. However, operating cash flow fell sharply versus 2024 and the conversion of earnings into cash looks weaker than in earlier years, indicating less consistent cash-producing strength through the downturn.57
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 14.10B | 17.19B | 19.57B | 20.35B | 17.65B |
| Gross Profit | 7.57B | 12.68B | 14.93B | 15.20B | 13.07B |
| EBITDA | 3.53B | 4.67B | 6.57B | 6.98B | 6.47B |
| Net Income | 72.00M | 1.13B | 2.98B | 3.61B | 3.18B |
Balance Sheet | |||||
| Total Assets | 41.18B | 43.35B | 41.37B | 33.94B | 31.07B |
| Cash, Cash Equivalents and Short-Term Investments | 4.42B | 3.56B | 3.92B | 4.34B | 5.25B |
| Total Debt | 18.56B | 20.14B | 17.16B | 11.19B | 9.59B |
| Total Liabilities | 25.67B | 27.62B | 25.36B | 19.16B | 17.33B |
| Stockholders Equity | 14.71B | 14.90B | 15.21B | 14.00B | 13.35B |
Cash Flow | |||||
| Free Cash Flow | 1.62B | 1.40B | 1.85B | 3.21B | 3.94B |
| Operating Cash Flow | 2.41B | 4.71B | 4.46B | 4.28B | 4.88B |
| Investing Cash Flow | 1.12B | -3.19B | -7.30B | -2.77B | -451.50M |
| Financing Cash Flow | -2.65B | -1.90B | 2.38B | -2.14B | -2.93B |
Kering Technical Analysis
Positive
37.82
Price Trends
33.87
Negative
34.70
Negative
29.63
Positive
Market Momentum
0.14
Negative
54.01
Neutral
94.34
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PPRUY, the sentiment is Positive. The current price of 37.82 is above the 20-day moving average (MA) of 32.47, above the 50-day MA of 33.87, and above the 200-day MA of 29.63, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 54.01 is Neutral, neither overbought nor oversold. The STOCH value of 94.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PPRUY.
Kering Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $31.48B | 64.44 | 55.34% | 1.16% | 8.14% | -65.04% | |
64 Neutral | $3.91B | 28.75 | 8.24% | 1.46% | -0.40% | -68.99% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | $41.42B | 506.85 | -0.42% | 1.91% | -14.09% | -64.67% | |
51 Neutral | $2.44B | -4.42 | -96.50% | ― | -17.66% | -223.06% | |
50 Neutral | $1.46B | -11.18 | ― | ― | 14.30% | 23.73% | |
42 Neutral | $202.31M | -0.87 | -2353.49% | ― | -23.54% | -49.41% |
* Consumer Cyclical Sector Average
PPRUY
Kering
33.76
6.03
21.75%
TPR
Tapestry
155.47
72.72
87.87%
CPRI
Capri Holdings
20.51
-2.32
-10.16%
SIG
Signet Jewelers
96.19
48.23
100.58%
REAL
RealReal
12.26
6.03
96.79%
LANV
Lanvin Group Holdings
1.73
-0.18
-9.42%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.