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Operating Profit Halved to €1,6 Billion as Brand Faces Weak Western Demand and Transitional Pressures
Financials
30 May, 2025
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In 2024, Gucci recorded one of its steepest annual declines in recent history, with revenue falling by 23% and recurring operating income cut by more than half. The brand closed the year with total revenue over €7 billion, returning to levels last seen during the height of the COVID-19 crisis in 2020. Despite a backdrop of moderate global growth in the personal luxury goods market—estimated at +4%—Gucci underperformed sharply, weighed down by shifting creative direction, slower consumer momentum in the West, and strategic distribution changes.
These results, released by Kering Group on 8 February 2025, reflect a challenging year for the group’s flagship brand. While the long-term repositioning initiated under new Creative Director Sabato De Sarno remains in early stages, the short-term financial impact has been significant. Gucci’s contribution to Kering Group’s consolidated revenue and operating income has diminished materially, at a time when peers such as Dior, Louis Vuitton, and Chanel have preserved growth through product consistency and focused brand execution.
| Indicator (€ million) | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Revenue | 7.650 (–23 %) | 9.873 (–6 %) | 10.487 (+8 %) | 9.731 (+38,8 %) | 7.440 (–16,5 %) |
| Recurring Operating Income | 1.605 (–51 %) | 3.264 (–13 %) | 3.732 (+0,5 %) | 3.715 (+10,3 %) | 3.367 (–33,2 %) |
Gucci ended 2024 with revenue of €7.650 million, marking a steep decline of -23% year-on-year. This represents the brand’s weakest top-line performance since 2020, significantly underperforming the global luxury market, which grew by approximately 4% in the same period. The contraction reflects multiple factors: softer consumer demand in key Western markets, continued wholesale streamlining, and the transitional impact of Gucci’s ongoing creative reset.
Recurring operating income halved to €1.605 million, down -51% from the previous year. This sharp drop in profitability also led to a compression in operating margin, now well below the 2022–2023 average. The pressure on earnings stemmed not only from lower volumes but also from sustained investments in marketing, store refurbishments, and organisational restructuring following leadership changes in late 2023.
Over a five-year view, Gucci’s revenue trajectory has been volatile: a strong rebound in 2021 (+38,8%) after the pandemic-induced decline in 2020, followed by a moderate growth of 8% in 2022. While 2022 marked a continuation of recovery, the growth rate was significantly lower compared to Gucci’s pre-pandemic performance between 2016 and 2019, when the brand regularly posted double-digit year-on-year gains. This was followed by two consecutive years of contraction, -6% in 2023 and a sharp -23% in 2024. Profitability followed a similar arc, peaking in 2022 at €3,7 billion, before falling by nearly 60% over the subsequent two years as the brand entered a period of creative and commercial repositioning.
While Gucci still retains one of the strongest brand equities in the sector, it now trails key competitors in both growth and margin. Dior, Louis Vuitton, and Chanel all recorded either flat or modest growth in 2024 and maintained operating margins above 35%. Gucci’s margin, by contrast, has fallen to just above 21%, indicating structural pressure that Kering Group must address in 2025 and beyond.
With the 2024 revenue back at 2020 levels and operating income nearly halved from its 2022 peak, Gucci’s 2024 performance shows the urgency of converting its creative transition into tangible commercial success. The brand’s leadership must now re-establish consistency, sharpen product positioning, and rebuild momentum in core markets—particularly North America and Europe—while sustaining its relative strength in Asia.
While Kering Group does not publish Gucci’s full regional breakdown, the FY2024 report noted a “slight sequential improvement in North America and Asia-Pacific” during the fourth quarter. This suggests some stabilisation in those markets following earlier softness. However, the brand’s overall full-year sales declined significantly, particularly through its directly operated retail network, which fell 21% on a comparable basis. The report does not disclose specific trends in Mainland China, South Korea, or Japan, but given the historical importance of Asia-Pacific to Gucci’s growth, this region likely remained a relative area of focus.
At the same time, the group acknowledged a “lower appeal of the brand’s collections” and “difficult market conditions in Europe and the United States,” pointing to macro-level challenges across mature markets. While Gucci has traditionally attracted a younger and more aspirational demographic, Kering Group did not explicitly reference this consumer group in its 2024 report.
Wholesale revenue continued to decline, in line with Kering Group’s long-term strategy to streamline third-party distribution and increase exclusivity. Gucci’s directly operated store network (including e-commerce) remained the primary revenue engine, though it also saw softening traffic in key cities, especially in the US and parts of Europe. The reopening of landmark stores and retail renovations in Milan and Paris are part of an effort to refresh the physical experience and drive higher-value customer engagement.
Gucci’s performance must be viewed in the context of its multi-year repositioning strategy. 2024 marked an acceleration of efforts to refocus the brand's identity around Italian craftsmanship and timeless elegance, in contrast to the bold, eccentric styling of previous years. This includes refining the product assortment, adjusting price architecture, and introducing immersive retail experiences such as its reopened Milan store and exclusive capsule drops.
The brand’s wholesale rationalisation—down 5% in 2024—is part of a deliberate move to enhance exclusivity, ensure better control of inventory and pricing, and reduce promotional pressure. Meanwhile, Gucci’s share of Kering Group’s total operating income dropped slightly, from 66,8% in 2022 to 68,8% in 2023, with other divisions such as Kering Group Eyewear gaining share.
2024 was the first full commercial year of Gucci under the creative direction of Sabato De Sarno, whose appointment had been announced in January 2023. His debut collection, Gucci Ancora, hit stores globally starting February 2024, following its runway premiere during Milan Fashion Week in September 2023.
Designed to mark a stylistic reset, the collection adopted a minimalist, timeless approach—a significant shift from the bold maximalism associated with former Creative Director Alessandro Michele.
While the collection received positive reviews from fashion media, the commercial response fell short. According to Kering’s earnings commentary, consumer engagement was lower than expected, especially in North America and Europe, two historically strong markets for Gucci.
By early February 2025, De Sarno exited the company—less than 18 months after his appointment—just days before his next collection was scheduled to be shown. This abrupt departure reflected the urgency of the brand’s need to regain traction after a disappointing retail year.
In line with the new creative vision, Gucci launched the “Gucci Ancora” global campaign in January 2024, spotlighting everyday luxury through simplified silhouettes and focused branding. The campaign spanned store windows, e-commerce, editorial placements, and digital platforms but struggled to reverse declining sales, particularly in mature markets.
For the holiday season, Gucci launched the “Gucci Gift 2024” campaign in November 2024, featuring curated gift sets and short videos across social media and email marketing. While visually impactful, these efforts couldn’t offset broader traffic declines in European flagships or North American luxury malls.
In retail, Gucci prioritised enhancing store experience and reopened its renovated Via Monte Napoleone flagship in Milan in Q4 2024, aligning the physical store identity with the Ancora collection’s subdued aesthetic. The relaunch was a highlight in an otherwise quiet year of in-store activations.
Gucci leaned on established brand ambassadors rather than launching new partnerships in 2024. Notable campaigns included:
Jin (BTS), officially named global ambassador in August 2024, who brought strong traction in Asia and among Gen Z audiences globally.
Hanni (NewJeans) continued to front global campaigns across sneakers and leather goods, reinforcing Gucci’s visibility among younger consumers.
Alia Bhatt, Indian actress, was spotlighted in Gucci’s Q2 2024 eyewear campaign, targeting growth across South Asia.
Davika Hoorne, Thai actress, promoted Gucci accessories and lifestyle campaigns throughout 2024.
While these ambassadors contributed to digital reach, they did not materially shift sales in underperforming regions like Western Europe and the US.
To address the underperformance, Kering Group implemented major leadership shifts in late 2024:
On 8 October 2024, Stefano Cantino was named CEO of Gucci, effective 1 January 2025, bringing leadership experience from Prada and Louis Vuitton.
On 8 February 2025, Demna, current Artistic Director at Balenciaga, was appointed Creative Director of Gucci, with his first collection expected to launch in late 2025.
These moves underscore Kering Group’s intent to revitalise Gucci by injecting creative edge and commercial discipline.
Gucci’s financial year 2024 was defined by disruption, recalibration, and the pursuit of a strategic reset. Revenue fell by 23% to €7,65 billion, while operating income dropped by 51% to €1,61 billion—marking the brand’s weakest financial performance since the height of the pandemic. This contraction reflects the misalignment between its new minimalist creative direction and market expectations, compounded by subdued consumer demand in Western markets and a continued pullback in wholesale.
Despite the short-term impact, 2024 also laid the groundwork for a broader repositioning strategy. Under the direction of Sabato De Sarno, Gucci launched a refined product vision centred on wardrobe essentials, Italian craftsmanship, and timeless tailoring. Marketing efforts through the Ancora campaign, store renovations such as the Via Monte Napoleone flagship reopening, and a tighter wholesale strategy all aligned with the goal of re-establishing brand exclusivity and long-term desirability. However, results were mixed, and by early February 2025, De Sarno had exited, signalling that creative strategy alone could not offset deeper commercial challenges.
Looking ahead to 2025, Gucci is entering a pivotal transition year. Several strategic moves have already been set in motion:
Leadership Overhaul: On 1 January 2025, Stefano Cantino officially assumed the role of CEO. He brings operational discipline and luxury sector experience from Louis Vuitton and Prada.
**Creative Repositioning 2.0: On 8 February 2025, Demna Gvasalia, known for the artistic transformation of Balenciaga (2015 to 2025) and his own label Vetements (2014 to 2019), was appointed as Gucci’s Creative Director. His debut Gucci collection is expected in Q4 2025, and it will likely redefine the brand’s aesthetic and market positioning.
Retail Evolution: Gucci plans to expand immersive physical retail experiences, with a focus on high-traffic luxury locations and elevated in-store storytelling. The May 2025 Florence show at Palazzo Settimanni was an early signal of this shift back to emotional, heritage-rich fashion theatre.
Digital and CRM Integration: The brand is investing further in customer insight tools, omnichannel experiences, and e-commerce optimisation to better engage high-value clients and Gen Z audiences globally.
As of Q1 2025, Gucci has not yet returned to growth, but it has stabilised its leadership and signalled a more decisive direction. With Demna’s first collection pending and commercial strategies under review, FY 2025 is expected to be a foundation year—less focused on immediate rebound and more on rebuilding product excitement, brand equity, and retail momentum.
In an increasingly polarised luxury market, Gucci still holds iconic status and global mindshare. The task now is to translate creative boldness into commercial consistency. If its strategic moves are well-executed, Gucci could enter 2026 on a renewed growth trajectory—restored as a flagship of the Kering Group portfolio and a cultural reference point in global fashion.
Read the full Gucci Brand report Here.
**Interested in financial insights from other top luxury brands?
Read Schiaparelli 2023 financial report Here
Saint Laurent Financial Insights in 2023 and 2024 here
Sources: Kering Group FY2024 Press Release (8 February 2025), Bain & Company Luxury Market Update (November 2024), Reuters (8 October 2024), The Guardian (16 May 2025), AP News (2 February 2025), Teen Vogue (25 August 2024), Gucci Campaign Archives.
Cover Image: Gucci Ancora Pop-up Gallery in Tokyo, courtesy
Tokyo Art Beat.