Good evening everyone and welcome to Kering H1 2026 results. This presentation will be made by Luca de Meo, Jean-Marc Duplaix, and Armelle Poulou, and will be followed by a Q&A session.

Luca, the floor is yours.

Good afternoon, everyone, and of course thanks for joining us. Before Armelle takes you through the financial results, I would like to share some thoughts on the first half of 2026 and obviously also about the progress we're making across the group.

H1 has been about turning strategy into action and action into results. Three months after our Capital Market Day, we started to execute our brands' playbooks, reduce inventories, optimize our store network, significantly reduce our net debt, and improved our key operational and commercial indicators.

These actions translated into tangible progress in our performance, and in fact the group returned to growth in the second quarter despite continuing to optimize its store network. This is particularly significant as we completed 84 net store closures in the first half, following 75 net closures in 2025.

Store optimization is not only about reducing our footprint, it is also about upgrading, renovating, and elevating our most strategic locations. The fact that we returned to growth while materially reshaping our network demonstrates the improving productivity of our retail operations.

I think momentum improved across nearly all our houses. Gucci accelerated significantly on a sequential basis, and our operating margin improved.

More broadly, all the key levers that are within our control, from brand execution and store optimization to cost discipline and inventory management, are tracking in line with or ahead of our expectations. We achieved this progress despite a market environment that, as remains uneven and demanding.

In such an environment, execution matters more than ever. This is why we remain focused on strengthening our brands and building a more agile, disciplined, and effective organization.

Our first priority is to reignite the desirability of our houses. Across the group portfolio, we have sharpened brand trajectories with detailed brand playbooks, clarified positioning, and accelerated the rollout of creative directions.

At the same time, we continue to deepen client engagement and strengthen our client development capabilities across the houses. Our ambition is to translate creativity into desirability by ensuring that product, merchandising, pricing architecture, marketing, and retail excellence work together as one coherent engine.

Let me now share some concrete example of the progress we have made since our Capital Market Day in April. Starting with Gucci, the Rinascimento plan is firmly underway.

Most importantly, we are beginning to see encouraging signs in the business itself, with Gucci retail improving by seven points sequentially in Q2 and all regions showing better trends. Since the beginning of the year, we have accelerated the pace of newness introduction in stores from La Famiglia deliveries in January, followed by the launch of the Pre-Fall Generation collection in April, and since mid-July, the rollout of Primavera, which by the way was the first Demna's fashion show presented in Milan in last February.

On the desirability front, recent initiatives have been well received. The Primavera fashion show and the Gucci Core Cruise show in New York at Times Square generated strong global media reception and ranked first worldwide in earned media value.

This reflects Gucci's ability to be back at the center of the conversation. The creative roadmap is clear.

La Famiglia was designed to reconnect with Gucci's roots. Primavera aims at reigniting fashion leadership, and Gucci Core Cruise collection expands the house appeal through a richer and more balanced offer.

In addition, we are reinforcing our leather goods strategy through a more focused and coherent offer. Recent launches such as Borsetto or Paparazzo, together with the carryovers like Giglio, are supported by dedicated product-focused campaigns, generating strong engagement, especially in Asia.

We continue to bring Gucci's cultural expression to life through La Gucci Vita, a platform that extends the house codes beyond fashion and strengthens relevance, engagement, and of course desirability. We announced our partnership with Alpine Formula 1 from the 2027 season, which will lead to the launch of Gucci Racing, creating a new platform for visibility and cultural relevance with new products and experiences in sports as a territory of expansion.

Another important milestone came on July 7th with the announcement of the exclusive beauty license agreement between Gucci and L'Oréal, one year ahead of schedule. Thus, we are creating a strong platform for long-term growth.

These initiatives are different in nature, but they reflect the same objective: strengthening Gucci's desirability, expanding its cultural relevance, and building new engines of growth and global reach to the new audiences. While rebuilding brand desirability takes time, our teams, I think, are fully mobilized across all fronts to restore sustainable growth as quick as possible.

Switching to Saint Laurent, the house returned to growth in the first semester. We are consolidating fundamentals while working on the key pillars that will drive the next phase of growth.

In Asia Pacific, we're sharpening execution through more localized campaigns and activations. At the same time, we're successfully scaling the men's category through a renewed product and retail strategy, which is also and already translating into stronger momentum.

Product and marketing initiatives continue to support desirability, particularly in ready-to-wear and shoes, both of which delivered strong growth this quarter. In leather goods, our priority remains twofold: further strengthening hero products while preparing a rich innovation pipeline for early next year.

Bottega Veneta continues to be one of the strongest growth engines within the group. Leather goods remain at the core of the strategy.

The house continues to enrich its product offer with the recent introduction of the new handbags such as the Barbara or the Madison, further expanding the assortment, while the Mini Andiamo has emerged as one of the house's strongest-performing launches, resonating broadly across regions, including China. Asia remains a strategic market for Bottega.

The house is uniquely positioned to capture the region's growing demand for craftsmanship, exclusivity, and cultural relevance. Building on this, Bottega Veneta continues to deepen its local engagement through partnerships with leading cultural institutions in Thailand and in South Korea to reinforce its brand integrity in the region.

As we look ahead, I am also pleased to welcome Romain Spitzer, who will join Bottega Veneta as CEO in one month's time, and his mission will be to build on the house's exceptional momentum and accelerate this success story. Balenciaga is going through a creative transition as the house works to define the next chapter of development.

Throughout this period, leather goods continue to demonstrate the strength and resilience of the brand, delivering double-digit growth in the second quarter and confirming their role as a core pillar of the business. At the same time, the house is progressively rebuilding and rebalancing its product offering with particular focus on ready-to-wear.

The priority is to establish a clear and distinctive proposition, reconnect with existing clients, and attract new clients and new audiences through a more elevated, feminine, and couture-inspired expression of the Balenciaga silhouette. The strong reception of the latest Haute Couture collection a few weeks ago further reinforced Balenciaga's position as one of the few houses with genuine couture authority and creative legitimacy.

Balenciaga is also enriching its footwear universe with new proposition such as the Radar, Jet, and Triple S2, while continuing to perform strongly in markets such as South Korea, highlighting the brand's relevance in one of the world's most dynamic luxury markets today. McQueen is executing its transformation plan focused on simplification and operational discipline, while refocusing the brand on its unique British tailoring DNA.

This includes the rationalization of the store network with 20 closures in H1 2026, a right-sizing of the organization, and a greater leverage of group platforms and shared capabilities. The recent appointment of Gianfranco D'Attis as CEO, in my opinion, marks an important step in the next phase of the house development.

At the same time, the decision to bring the fashion show back to London reflects McQueen's ambition to reconnect more closely with its heritage and reaffirm its unique creative identity. Now Brioni continues to demonstrate the value of its unique positioning in sartorial excellence while increasingly contributing its craftsmanship and manufacturing expertise across the group.

This includes supporting know-how sharing and industrial synergies with other houses, notably Gucci and Bottega Veneta. The house continues to deliver solid growth, supported by the growing success of Maestria.

This is the high-end bespoke offering, which grew by more than 30% year-on-year and now represents nearly a quarter of store sales in H1 2026. Let's turn now to Kering Jewelry, which continues to grow double-digit.

At Boucheron, momentum remains particularly strong, reflecting the growing desirability of the Maison. The launch of the Quatre XS has been a notable success, especially in Asia, demonstrating Boucheron's ability to continuously reinvent its icons.

Both Boucheron and Pomellato further reinforced their desirability through their latest high jewelry collections. At Boucheron, the Untamed collection stood out as a remarkable demonstration of creativity and technical innovation, pushing the boundaries of traditional high jewelry while remaining deeply rooted in the Maison's savoir-faire.

At Pomellato, we are amplifying brand visibility through a series of high-profile activations, including a dedicated exhibition at the Palais de Tokyo, further reinforcing its positioning as a benchmark in contemporary fine jewelry. At Qeelin, we continue to strengthen the Maison's unique positioning at the intersection of Chinese culture, fine jewelry, and contemporary luxury market.

Momentum remained particularly strong in Asia Pacific, with outstanding performance in South Korea. As highlighted during our Capital Market Day, we also see significant growth potential in jewelry across our fashion houses.

The recent high jewelry activation of Gucci in Times Square generated strong client engagement and illustrated the potential for expansion. At the same time, we continue to build a more integrated and scalable jewelry platform, already delivering the first sourcing and industrial synergies.

In eyewear, we continue to build one of the most successful platforms created in luxury over the last decade. The launch of the first Valentino eyewear collection, supported by high-profile events in Milan and in New York, marks another important step in the expansion of our brand portfolio.

Performance in the first half was notably driven by Cartier and by Bottega Veneta, both of which delivered strong double-digit growth, reflecting the exceptional reception of the latest collection and the continued strength of their brand desirability. Maui Jim and Lindberg also delivered solid growth, supported by product innovation, strong execution, and continued momentum across key markets.

Kering Eyewear delivered another period of strong growth and profitability, demonstrating the strength of our luxury portfolio and our ability to translate brand desirability into category leadership. Alongside our brand initiatives, we have been restoring operational rigor across the group.

This includes tighter control of inventory, more disciplined management of our retail network, a continuous focus on operating expenses, and greater accountability across the organization. We have also evolved our leadership structure with the recent appointment of, as I already mentioned, Romain Spitzer as CEO of Bottega, Gianfranco D'Attis as CEO of McQueen, Anouk Duranteau-Loeper as Deputy CEO of Saint Laurent in charge of product in this fantastic Maison.

China is a top strategic priority for Kering. Last week we were on the ground with our teams to launch a dedicated action plan aimed at accelerating execution and strengthening the relevance of our houses in that important market.

Our priority is simple: put the client back at the center of everything we do. We are adapting our organization to better combine the global vision of our houses with the insights of our local teams and to increase local relevance across product, communication, marketing, and retail.

We are sharpening our focus on products, clients, and activations that resonate most with Chinese consumer while accelerating our capabilities in clienteling, digital engagement, and retail excellence. China is evolving, as rapidly, and it's becoming more selective, more local, and more experience-driven.

In this environment, success is increasingly determined by desirability, relevance, and execution. This initiative is built around clear objectives and measurable milestones, strengthening our execution in a country which remains one of the most important growth opportunities for luxury over the long term is one of my key priorities for 2026, and I will return with the team in November to review the first tangible signs of progress.

This is also the rationale behind Kering Craft. This is our partnership with Shanghai Fashion Week through a residency program supporting 10 promising Chinese designers.

We are investing in the next generation of creativity while deepening local insight and connecting to the next generation of Chinese talents and clients. Restoring long-term performance is also about building stronger common capabilities across the group, I'm convinced.

One of the most important changes underway at Kering is the construction of our group platform. Today, it is becoming operational, bringing together technology, client, industrial, sustainability, and support functions to help our houses move faster, allocate resources more efficiently, make better decisions, and scale best practices across the group.

In industry, we're investing in a stronger, more sustainable supply chain ecosystem to enhance quality, foster greater collaboration across houses, and unlock the full benefits of the group scale while preserving the uniqueness of each one of our houses. We are beginning to mutualize expertise and production capabilities through dedicated hubs for selected activities such as belt manufacturing, bags cutting, and this approach is already translating into greater collaboration across houses with Bottega Veneta, Balenciaga, and Saint Laurent leveraging selected Gucci industrial assets.

Beyond driving competitiveness, these initiatives also enhance traceability across our supply chain. Technology is becoming part of Kering operating system, helping us make faster, smarter, and more informed decisions across the value chain.

This is the ambition also behind Augmented Kering, combining human expertise with data and AI to improve decision making, enhance execution, and scale best practices across the group. We are not starting from a blank page.

The foundation are already in place: a single cloud-based data platform, digital twins across clients, products, and supply chain, and AI-enabled use cases already delivering tangible results. We are notably deploying advanced planning and inventory management tools, improving visibility, replenishment efficiency, and operational agility.

These capabilities are helping us better anticipate demand and allocate resources more effectively. The next step is to build on this foundation by progressively deploying AI agents capable of supporting and orchestrating execution across selected processes.

Beyond operational benefits, these tools contribute to our sustainability ambition of driving fair production through resource efficiency, producing closer to demand, reducing waste, and making better use of resources across the value chain. In the first half, we have advanced our roadmap around fair production, material innovation, and craftsmanship.

Sustainability is an integral part of how we build long-term value at Kering. Through our Material Innovation Lab, we help our houses identify and scale next-generation materials.

Today, the platform includes more than 11,000 sustainable materials, including 3,700 non-leather alternatives. We are also fostering innovation beyond our own organization through initiatives such as the Kering Generation Award, which supports and accelerates sustainability innovators across key regions like China, Japan, or Middle East.

Two pilot projects have already been launched with one of the winners from previous editions, and we will announce shortly the expansion of this initiative to a new country. Transformation starts with people.

It requires a challenger mindset and fresh perspective. This is why we launched Hackering, gathering high-potential talents from across our houses, functions, and regions, and exposing them to some of our most strategic challenges.

Several ambitious projects are already moving into implementation. These initiatives span product innovation, AI-powered solutions to enhance client engagement and decision making, as well as the design of a global event aimed at inspiring and connecting the next generation with luxury.

Hackering is a powerful illustration of the energy, the creativity, and the entrepreneurial spirit that exists across the group. Ultimately, the AI-enabled tools we are developing are transforming the way we engage with clients.

Client advisors can access relevant client insights and product recommendations through natural language queries, create tailored selections, and deliver more personalized experiences. To conclude, the first half of 2026 was about turning strategy into action.

We continued to strengthen our houses and we made concrete progress in building a more agile and disciplined organization. Now, Armelle, it's time for you to take us through the financial results in more detail.

Thank you, Luca, and good evening, everyone. Luca has just outlined the actions.

Let me show you the results. The group is back to growth in the second quarter.

Profitability improved. Our balance sheet is now much stronger.

We did all of this while continuing to invest in the desirability and future growth of our houses. On slide 16, you will find a summary of the key figures for the first six months.

Revenue was 7.2 billion euros, up 1% on a comparable basis, with a return to growth in the second quarter. Recurring operating income came to 921 million euros, a 12.8% margin, up 40 basis points year-on-year, and 300 basis points versus the second half of 2025, delivering on the progressive improvement we had targeted.

Free cash flow from operations reached 2.6 billion, including around 800 million from real estate net proceeds and the Gucci beauty agreement. CapEx amounted to 419 million.

Excluding real estate investment, CapEx was 260 million, representing 3.6% of revenue. Net financial debt stood at 3.3 billion euros at June 30, down 4.7 billion from year-end 2025.

All those indicators point in the right direction. On slide 17, first half revenue was down 3% reported and up 1% comparable.

After a stable first quarter, the group posted comparable growth of 2% in Q2, a two-point sequential improvement, and the first quarter of growth in 12 quarters. This acceleration was reflected in better trends across most of our activities.

We achieved that while continuing to streamline our network. We ended June with 1,635 stores, down 84 since year-end, on top of the net 75 closures completed in 2025.

We remain on track to deliver at least 100 net closures this year. Beyond efficiency, these actions sharpen our presence, focusing on fewer, higher-quality locations, and driving stronger store productivity.

Foreign exchange remained a headwind. FX weighted on reported revenue by close to four percentage points over the half, largely concentrated in the first quarter.

In Q2, the drag eased to around one point, supported by the appreciation of the Chinese renminbi and the South Korean won. Looking at our regional mix, North America increased its contribution to 24% of group revenue.

Western Europe remained stable at 30%, while Asia Pacific, excluding Japan, was broadly unchanged at 30%. Japan represents 7% of group revenue, and rest of the world decreased to 9%, mainly reflecting the situation in the Middle East.

I will come back to this in a moment. On slide 18, you have revenue by segment for Q2 and H1, and sequential trends are positive across the board.

Kering Fashion and Leather Goods was stable in Q2 on a comparable basis, a three-point sequential improvement versus Q1, with trends at Gucci improving by six points versus the first quarter, leaving Q2 down 2% year-on-year. Kering Jewelry delivered another outstanding quarter, up 18% comparable versus last year after 22% in Q1, confirming its role as a growth engine for the group.

Kering Eyewear grew 8% comparable versus last year, accelerating slightly from Q1, once again demonstrating the consistency of this business. Corporate and other declined 6% on a comparable basis in Q2.

Overall, the return to growth was broad-based. On slide 19, the top line by channel: retail, including e-commerce, accounted for 73% of group revenue.

It was broadly stable over the semester on a comparable basis and returned to growth in the second quarter, up around 2%. Traffic remained under pressure across most regions, but conversion improved and both average unit retail and average ticket increased meaningfully, more than offsetting lower volumes.

Within retail, e-commerce grew 3% comparable and represented around 12% of retail sales. Wholesale and other, which accounted for 27% of total revenue, was up 5% on a comparable basis in the first half, although this reflects two different dynamics.

Wholesale revenue from Fashion and Leather Goods was up 1% as we continue to prioritize our own retail network while working with a more selective base of wholesale partners. Growth was driven by both eyewear and jewelry.

Eyewear revenue increased 8% comparable, reflecting the strength of a business model that is wholesale-driven. Jewelry wholesale revenue was up 7% comparable in the first half.

After a strong first quarter with growth of 14%, second quarter revenue was flat, primarily reflecting the conversion of some franchise locations to directly operated stores. On slide 20, a closer look at retail by region: North America was once again the group's strongest region, up around 10% in the second quarter versus last year after 9% in the first quarter, with positive contribution from most of our houses, including Gucci, where brand equity is resonating particularly well with American consumers.

Western Europe improved markedly. Retail was down only around 1 percentage point in the quarter, a six-point sequential improvement as firmer local demand offset still soft tourism flows, even though those flows improved quarter-on-quarter.

Japan was up 9% in Q2 after being down 3% in Q1, driven notably by the outstanding momentum of our jewelry houses and a more favorable tourism dynamic than in Q1. Asia Pacific was down 1% in Q2 with trends improving gradually.

Performance remained mixed across the region. While Mainland China remained down, the rest of Asia, and South Korea in particular, delivered an excellent performance.

Finally, rest of the world remained challenging, down 8% in Q2, mainly reflecting the instability in the Middle East, even as retail in the region improved sequentially month after month through the quarter. The Middle East typically accounts for around 5% of group retail revenue.

Its negative impact on group revenue growth was 1 percentage point in the second quarter, in line with Q1, when the disruption affected only one month of the quarter. Taken together, momentum improved across most regions.

Let's now turn to profitability on slide 21. Recurring operating income reached 921 million euros in the first half with a margin of 12.8%, up 40 basis points year-on-year, and 300 basis points versus the second half of 2025.

Our margin is now above both the first half and the full year of 2025. Two things drove it: better commercial momentum and the discipline now embedded across the organization.

Not cost-cutting for its own sake, but smarter spending, ensuring every euro supports brand desirability, client experience, or future growth. We optimized our store network, reduced discretionary spending, accelerated procurement initiatives, and simplified our cost base.

Group OpEx was down 5% in the first half at 4.2 billion, driven in large part by fixed-cost reductions that have structurally lowered our cost base. These are structural actions, and their benefits will continue to build.

Crucially, none of this came at the expense of our houses. A&P was maintained at around 9% of revenue, sustaining brand visibility and supporting the momentum of our collections.

That balance is deliberate. We are restoring profitability while continuing to fund creativity, innovation, retail excellence, and client engagement.

This is what gives us confidence in the durability of what we are building. Let me now review our segments, starting with Kering Fashion and Leather Goods on slide 22.

Revenue stood at 5.8 billion euros in the first half, down 1% comparable. In the second quarter, revenue reached 2.9 billion euros, and the segment turned positive, three points better than in Q1.

Beyond Gucci, which I will cover in a moment, momentum improved across several houses. Saint Laurent delivered a strong quarter in retail with growth accelerating across most markets.

The house performed particularly well in North America and Western Europe, supported by strong client demand as the new collection continued to gain traction. Better retail execution and stronger product availability drove robust growth among both VIC and core clients, while Mainland China and the Middle East remained more challenging.

Bottega Veneta once again outperformed with retail trends accelerating across most markets. The acceleration was particularly strong in North America, Japan, South Korea, and Western Europe, supported by excellent momentum in leather goods.

Balenciaga faced a more challenging quarter in retail as the house continued to work through its creative transition and rebalance its business. Leather goods, driven by the City and Rodeo, delivered a strong performance, a reminder that the underlying product engine remains sound.

McQueen accelerated the execution of its repositioning under its new CEO, strengthening the foundations of the brand and right-sizing its distribution network. Brioni continued to deliver another quarter of strong performance.

Segment profitability also improved. Recurring operating income was 828 million euros, a 14.3% margin, up 0.7 points versus the first half of 2025, reflecting cost discipline throughout the segment.

Focusing on Gucci now on slide 23: the house recorded sales of 2.8 billion euros in the first half, down 5% comparable. In the second quarter, revenue reached 1.4 billion euros with the decline narrowing to 2%, six points improvement versus Q1.

New collections continue to gain traction, driving stronger brand visibility, renewed client engagement, and positive retail trends. Leather goods returned to growth in the quarter, supported by the successful launch of Borsetto and Paparazzo.

Performance in retail improved across all regions during the quarter, with North America remaining the key growth driver. Western Europe and Asia Pacific showed encouraging signs of recovery, while Mainland China remained challenging despite a gradual improvement.

The quarter was firmly execution-driven with a refocused product architecture, faster product introduction, and continued upgrades to the distribution network. The house recorded 19 net store closures in the first half while continuing to invest in the refurbishment of selected stores.

There is still work ahead, but the actions taken across products, retail, and organization are visibly paying off. Recurring operating income reached 468 million euros, a 17% margin, up one point versus the first half of 2025.

This reflects continued cost discipline, and importantly, it did not come at the expense of investment in the brand, as Luca showed earlier. On slide 24, Kering Jewelry was once again one of the standout performers.

First half revenue reached 521 million euros, up 20% comparable. In the second quarter alone, revenue reached 252 million euros, up 18% comparable.

Boucheron continued to deliver exceptional performance, reaching new record levels with particularly strong growth in Japan and Asia Pacific, supported by the successful launch of the new Quatre XS variation of the house iconic Quatre collection. Pomellato also maintained strong momentum, driven by continued strength in Japan as well as in North America and the sustained success of its key collections.

Dodo recorded a more challenging quarter against a demanding comparison base. Finally, Qeelin growth moderated during the quarter, although performance in Asia Pacific remained outstanding, particularly in South Korea.

Recurring operating income was 32 million euros in the first half, a 6.2% margin, up 2.7 points versus the first half of 2025. Beyond the quarter, these results confirm both the strength of our jewelry houses and the scale of the opportunity ahead.

On slide 25, Kering Eyewear delivered yet another strong quarter. First half revenue reached 965 million, up 8% on a comparable basis.

Second quarter revenue totaled 476 million, also up 8% on a comparable basis, with growth supported by all major regions. Performance benefited from a series of high-profile product initiatives: the Lindberg 40-year anniversary capsule collection, the relaunch of the optical category at Maui Jim, and the successful debut of Valentino's eyewear collection.

The business keeps demonstrating the strength, consistency, and scalability of its integrated model and remains a reliable source of profitable growth and diversification for the group. Recurring operating income was 222 million euros, a 23% margin, up 2.9 points versus the first half of 2025.

On slide 26, a brief word on Corporate and other, which is not material at group level: revenue was up 1% comparable over the first half and down 6% in Q2, primarily reflecting the end of rental income following the real estate transactions, despite a very strong performance, double-digit performance, from Ginori. The corporate segment reported a recurring operating loss of 152 million.

Now looking at the remaining lines of the P&L on slide 27: total non-recurring items amounted to a net expense of 223 million in the first half, primarily reflecting costs associated with real estate transactions, but also impairment charges and penalties related to the store closures as well as restructuring measures. Net financial charges amounted to 280 million euros, or 160 million excluding interest on lease liabilities.

The cost of net debt amounted to 122 million, down 26% year-on-year, benefiting from higher interest income supported by the group's strong cash position, as well as lower interest expenses resulting from reduced average long-term debt. As anticipated, the effective tax rate on recurring income is 32.5%, down 3.5 percentage points compared with fiscal year '25.

We continue to expect the tax rate to gradually return to its normative range of 27% to 28% over the next two to three years. As a result, group net income from continuing operations, excluding non-recurring items, reached 355 million euros.

On slide 28, a quick look at CapEx and free cash flow: CapEx amounted to 419 million. Excluding real estate investment, CapEx totaled 260 million, equivalent to 3.6% of sales.

Free cash flow from operations reached 2.6 billion. Excluding real estate net proceeds and the Gucci beauty agreement, free cash flow from operations amounted to 1.8 billion, up 68% versus H1 2025.

On slide 29, you can see a more detailed view of the free cash flow generation with one element I want to flag: the change in operating working capital amounted to 602 million, representing an improvement of 863 million year-on-year, and reflecting continued discipline in inventory management. Reducing inventory remains a priority, and our 1 billion reduction target for our Fashion and Leather Goods houses by year-end is well within reach.

The aim is a healthier, faster-rotating inventory base, freeing up cash while continuing to fund the newness our collections require. Cash generation has allowed us to strengthen our balance sheet, which I will turn to on slide 30.

At June 30, net financial debt stood at 3.3 billion euros, a reduction of 4.7 billion euros compared with year-end 2025. Three elements contributed: the 4 billion euro proceeds from the disposal of Kering Beauté, and real estate transactions completed over the period including the 700 million euro proceeds from the sale of Via Monte Napoleone.

Net debt to adjusted recurring EBITDA stood at 1.4 times, which we consider a healthy level. In the first half, we paid 490 million euros in dividends, in line with our payout policy.

Our capital allocation guidelines are unchanged: M&A restricted to selective bolt-on acquisition, reinforcing supply chain and expertise, and a disciplined approach to shareholder returns. Growth returning, profitability improving, and a materially stronger balance sheet.

That is the financial picture at the half year. Luca, back to you.

Merci, Armelle. As you have seen, the action taken over the past months are beginning to generate encouraging signs.

The return to growth in the second quarter was, I think, an important milestone. We are still at the beginning of the journey, and we remain realistic, really realistic, about the challenges ahead.

Our priority now is to execute reigniting roadmap, to continue improving profitability, and further strengthen the foundations of Kering for the long term. On that basis, I like to take the opportunity to confirm the guidance we shared earlier this year.

The guidance was growth and improved profitability in 2026 versus 2025. I think we are now available, of course, to answer all your questions.

Thank you, Luca. We'll now open the Q&A session.

Please open your mic and try to limit you to two questions. We'll start with Edouard Aubin, Morgan Stanley.

Edouard, please could you open your mic?

I think that's open. Can you hear me well?

Yes.

Wonderful. Thank you.

Good evening, Luca and team. Congratulations for the clearly encouraging developments.

Two questions from me on Gucci. The first one, Luca, you talked about progress in terms of product, distribution, communication, etc.

Fundamentally, what makes you confident that Gucci now is really on the right track? That could be question number one.

Then question number two, from a commercial standpoint and the trajectory of the recovery, if you look at consensus, it, expecting already Gucci to turn positive in Q3 despite a more difficult comp base. Do you think that could be possibility?

Then you had talked initially when you joined about Gucci being positive for the full year, which for now consensus does not assume. Do you think that's still achievable for Gucci to post a positive performance for the full year?

That would be my two questions. Thank you so much.

Look, I think we see there is a lot of work going on at all levels in Gucci, from retail to product to the industrial system, the work that's done on suppliers, etc., etc. What makes me confident is that Gucci is incredibly popular brand.

Of course, all the eyes are on Gucci, but when it turns positive, everybody will actually realize what's going on because everybody's looking at it. I think we have a strong management team there.

They work very well together. They're becoming faster.

There is a lot of thing that they have to fix. Look at what did we did in retail.

I remember that we were guiding at not on Gucci, but overall on the group, 100 store closures net by the end of 2026. We are already 84.

Part of it is the work done at Gucci, they're rationalizing a lot. I think that you have to take into account that the real first complete collection of Demna is actually hitting the stores right now.

We will start to communicate in next weeks a lot with a very strong campaign. What we had done so far was activating a couple of collection that were partial collections.

When I look into the numbers, I can clearly see that newness works. I can clearly see that leather goods is very positive.

The thing is there's nothing, in fact, you have completely to reinvent about Gucci. What we need to do is to do the right things for Gucci, and I feel like we're doing them.

Now, looking ahead, through the year, I think what we can commit is, as I said before, is a growth. This is visible for the group.

I don't think it's going to be linear. Potentially, we have a more unfavorable, let's say, comparison with last year on Q3.

We see at this stage, Q3 maybe being flattish, but we are people that are there to fix problem, find solution, and overcome the challenges. Far, seems that the machine is under control.

One of the things I'm more proud of is, apart from the dynamic of the team internally and the way we work with the brands, is the fact that all the things that we can completely control, the internal things, as Armelle mentioned before, from stocks to cash to margins, etc., etc., so far we've been good at doing at least what we've promised. I can for sure commit that the team will be fighting, and even the Gucci team, from now to the 31st of December, to comply with the commitment we've made.

I feel, based on what I said before, that it might not be linear, but it to me is not particularly important. The important is that we continue to progress as including Gucci in the first, in the second quarter as proved.

Thank you.

We'll now switch to Anne-Laure Bismuth from HSBC. Anne-Laure, please could you open your mic?

Yes, hi, good evening. My first question is on Gucci, just to confirm that on the recently launched Primavera collection, you are seeing continuing improvement on the back of this launch in July, and is it across all categories?

Also, you talk about the fact that you are building the momentum for the long term, but how long the turnaround of Gucci in China can take given that the brand desirability has been damaged? My second question is for Armelle about OpEx management.

OpEx went down 5% in H1 while it was guided to be flat for the full year. You said during the presentation that the benefit of cost discipline will continue to build, should we expect the same decrease in OpEx for the full year, meaning around 5%?

Thank you. Maybe

you want to start? Or no, you want me to start with the Gucci?

I'll start with the Gucci part. I think it's relatively soon to actually make an assessment.

We see very positive sign, as much as we have seen that with the previous couple of collection, especially on newness. The collection has hitted the first store, it's a part of it, on the 15th of July.

We'll start communicating by the end of August, and by then, all the palettes and all the offer will be in the store, I think we will be able to talk about that next time we see each other. I think let's say we're pretty confident, as I said before.

That's the first complete collection that the new artistic director has performed, it's very important. On China, you're right, there is a lot of work that has to be done, a fundamental work.

That's why we were there last week all together. I think the first thing we have to do is to make sure that we can clean the table from maybe unorthodox practices that we had in the past into that market.

We have to respect that this is becoming one of the most challenging and competitive market in the world. The good news is that we know the things that have to be done, and the point is somehow so low that I feel there is a lot of potential in China.

Is going to take weeks? I don't think so.

I think it's probably one of the most important chantier we have, not only for Gucci, but for all the brands, because as Kering in China, in general, hasn't captured all the potential of the market, but it's an opportunity and an upside if you do it right. I think we deserve a bigger market share, even if we know that everybody's competing for that thing, but naturally, we should be better than where we are.

Gucci, for sure, the first symbol of that kind of return, but we are very committed to execute this project.

Anne-Laure, on OpEx, as you say rightly, we are very satisfied with the performance of the first half because we managed to decrease OpEx by 5%, and this was mostly done on fixed costs. You remember rightly that we guided at the beginning of the year to flat OpEx, but considering the performance of our action that were done across the organization, notably in store expenses, but not only, while, and I remind you, continue to invest strongly behind the brands, we are quite confident that we can reduce OpEx on the full year.

Thank you, Armelle. We now have a question from Oliver Chen, TD Cowen.

Oliver, please could you open your mic?

Thanks so much, Philippine, and good to see you all, Luca and Armelle. Regarding Gucci, what are the key catalysts in terms of the collections ahead?

Would you expect the North America performance, which has been tremendous, I suppose, to outpace Asia Pacific? As North America has been somewhat super-normal, but very encouraging with so much wealth effect.

A second question is on supply chain and artificial intelligence. How are you interacting with AI relative to driving both inventory management, which is a huge opportunity, and cultural relevance, as you've had that cultural relevance dashboard?

Thank you. Oh,

the second one is a complicated one. It will take me an hour and a half to explain to you what are the many things we're doing.

I would start from that one. I think the objective is to make of Kering one of the companies that better uses the opportunity of this new technology.

I think the good news is that we actually have, also compared to other companies, the right infrastructure to start and to become pretty core application of AI in our daily life. I think there are three areas where there is really potential.

I'll use a slogan is, I tell to the people: we follow the money, we follow the product, and we follow the client. These are the three areas where I believe that AI can really boost our performance, increase productivity, maybe more than double our speed on many of the things.

Again it's a beginning of a journey that will last years, etc., but we are determined to take the advantage and the opportunity for AI, and next time we meet, maybe we spend a little bit more time on the detail of the project, but this is a core activity for us as a team. As we have also onboarded new competencies in the house, people that have already done that in other companies, and so I'm very positive about it.

On the Gucci thing, yeah, it's a process. We were out with the collection at the beginning the year called La Famiglia.

There was a way to kind of reconnect to the roots of Gucci. It worked very well.

We had a Generation collection that was extending and enlarging the product offering, not going only because I think Primavera was probably 20 SKUs distributed at the beginning in few stores. Of course, with the new one, we are covering the whole things.

If I project simply the performance of the first two collection and multiply them by the variety of product that will come with the Primavera, I feel that we are in a better place. It's not only this.

A lot of things are going on on Gucci. We have to become better in many dimensions, which we're doing.

I think Francesca is on many, many fronts. Part of it is the product, the merchandising, the retail merchandising, the pricing, the availability of product, the quality, you name it.

I think it's a big work, but as I said a few minutes ago, I think we know what we have to do, and we're doing it.

If I may, I would add something, Luca. When it comes to the specific situation of North America, because it was also your question, of course there is a wealth effect, but it does benefit to the all sector globally.

What is very encouraging when it comes specifically to Gucci is that where the brand equity is the most sound, and it's true that in the US or in North America, historically, Gucci brand equity, brand perception remains quite high, you see that there is a immediate impact of the new collections, which are very well received, compared to some other markets where probably the brand image has been more damaged.

Thank you.

We now have a question from Luca Solca, Bernstein. Luca, please could you open your mic?

Thank you very much indeed, Philippine. Hello, Luca, Jean-Marc, Armelle.

I have two questions. One is about your thinking on price and mix.

We seem to see that some of your peers are struggling with the middle-class aspirational consumers, especially in soft luxury. There seems to be an affordability issue that luxury companies are confronting.

I wonder how your strategic thinking is on where the core brand should be pricing. I think you've shown you're not shy to reach down to some of the aspirational middle-class consumers, and I wonder how you see the development going forward.

There was, in the past few years, a lot of emphasis on stretching upwards and pricing higher, but this seems to be the wrong thing to do at the moment. I wonder how you think about it, anyway.

The second question is about the remarkable achievement in reducing net working capital. I have a question on inventory.

I believe you have voiced ambitious plans to reduce inventory by about 1 billion euros in 2026. I wonder how the dynamic of inventory reduction is going to play out.

How much is it connected to reducing inventory that was present in the company, how much is it coming from ability to play it more flexibly and in a leaner manner, and how this is going to impact the off-price versus full-price mix? If you could give us a bit of a granularity on the off-price channel at the moment, that would be fantastic.

Thank you very much. Bon,

on the pricing mix, both questions that would require a lot of time to be honest because both of them are on multi-dimensional, let's say, issues. I think we have embedded in the plan, right from the beginning, a scenario where inflation would not help us compensating from inefficiency in what we were doing.

I think that we actually took a scenario where the inflation that was possible maybe a few years ago is not possible anymore. There is a lot of way of positioning or repositioning products.

On one side, we are cleaning up and reducing everywhere we can and in every way we can the off-price practices because I think we have to protect full price. This is the strategy.

We are looking at, and as a very competent analyst, I'm sure you have seen that the new collections on most of the brand, take for example Gucci, is competitively priced on the new products. We have also, in a few cases, kind of repositioned some of the products because I have the feeling that in some categories we kind of went too far and played with the elasticity.

I have to tell you, I cannot kind of unveil details, but sometimes that had a very big impact on the volume. The elasticity was not exactly linear, was exponential.

We continue to look at the pricing structure, and we are very much determined and trying to align pricing to intention to buy, desirability. At the same time, there is a lot of work that is been done so far, and it is embedded in the plan to push on quality content, because that's the way you create desirability and We are in the luxury market, we are here to sell dreams, here to sell excellence.

The best way you can do that is improve the product quality and execution and the service. My simple message is we are very much aware of the fact that the market will not necessarily give us the comfort of turning our problems for the customer.

We have to come up with very competitive products, very high quality product, very creative product at the right pricing. On the stocks, I have to say, and then maybe I leave the word to Armelle because also to honor the work that has been done by her and by the team, we committed to a 1 billion reduction of the stocks.

We are on track on that. We confirm that this is let's say our target for the end of the year.

I believe that we have gone I would say pretty fast on that. Of course, the first hundred of millions are easier, and then you get to an asymtome of this where it's more difficult to reduce unless you don't change the system completely.

This is what we are also planning. Now, for to give you an example, the way we are able to produce, the way we are able to replenish the stocks is one of the discussions we are having on the industrial side.

Gucci, for example, is changing the way they are buying and integrating faster replenishment cycle, but it requires a kind of re-engineering of the industrial process plus the ecosystem of suppliers. That's the intention.

We want to continue to go down, and we know exactly at what level are the benchmarks, and we are determined to build a Kering, or houses of Kering, being amongst the most competitive in this field. I hate stocks.

I think it's not a good thing. We will have to design a machine that is different.

Right now, we are driving a machine very, very well, and we are hitting let's say the target we gave ourselves. It's also true that I cannot reveal exactly the number, but it's also true that we made some very brave decision on reducing production for this year, and I'm not talking about a few percentage points.

This is part of the story. Challenges, of course, is in the next months to continue to sell, to increase sell-through, so that we can continue to go down and work on the quality of the stock.

Do you want to add something, Armelle?

Maybe what I can add is that this achievement has been done by teaming people from the different brands all together. I think that was a great opportunity to benchmark the practices between brands, and at the end of the day, to decide to have one process, getting the best of each of the brand experience.

I think it's very important, and now we are really working on improving the integrated business planning within the group, also investing in some tools that we can leverage on all the different brands, even if each brand keeps its specificities. For me, it was a very interesting experience in how we can team between the brands behind a very strong and demanding target, and that's really what we are doing in many different directions.

Maybe to conclude on that question, let's say that the performance of the quarter or the semester has not been driven by discounted sales. The full-price sales have been very robust in terms of growth, especially in Q2, across the board.

Two important message: we had presented some ambition during the Capital Market Day in terms of reduction of the store footprint, including the outlet network, and this ambition is still the same, and we are closing some outlet stores. That's still part of the journey we are engaging in.

Thank you very much indeed.

Thank you, Jean-Marc. Let's now switch to Antoine Belge, BNP.

Antoine, please could you open your mic?

Yes, hi, it's Antoine Belge at BNP. Good evening to all of you, and yeah, congratulations on those results.

I know the focus is on Gucci, but I think, Luca, yourself you said that the group was not just about Gucci, and in as much as I hate to call them non-Gucci brands, it seems that the other brands cumulated were at 2% in the quarter. Maybe there is some rounding, which would be the similar growth rate than in Q1.

Could you say if the maths are correct, and which brands may have accelerated, and maybe another brand might have decelerated, notably on the main one, BV, Saint Laurent, Balenciaga? The second question is, I think before the results, you had indicated that the H1 margin would be lower than H2.

With this very strong beat in H1, are you reconsidering this, like it was a conservative assumption? Or we think that 12.8% is like a floor, and then, yeah, you will be at least doing 12.8% in the second half?

If you could say something on the gross margin evolution, that would be great.

Look, I think all in all, you're right. All the non-Gucci brand are growing 2% is a mixed thing.

Saint Laurent and Bottega Veneta doing great on the fashion side. Balenciaga is in the middle of a creative transition, I think we have a very good performance on leather goods, and we're trying to find ourselves more on the ready-to-wear and on the shoes.

We'll have to give the team time to regain a certain positive dynamic. Saint Laurent, Bottega, very, very good, I have to say.

Then don't forget the jewelry part that Jean-Marc is leading as a division now, and the Kering Eyewear. They're giving us really positive surprise, very strong and very solid management of those two categories.

That's what I can say. We committed to growth in 2026 to 2025.

We told you that we'll be better also in terms of profitability. The good thing is in H2 2025 we were, I think, at 9.8%, we were 12.8% on H1 2026.

We keep going. Armelle told you that we continue to reduce the cost in an intelligent way.

It's also important for me to say that if you look at the numbers, the cost reduction is not actually, let's say, impacting our ability to invest in the brands. If you look at the money we're putting on communication or investment we're putting on refurbishment and relocation of stores, etc., etc., I think we'll continue to do that, it's not that we're cutting on the flesh if you want.

We keep investing. If you look at that, you can expect us to continue to work on a profitable 2026.

Yes, maybe to answer precisely to your question, Antoine, we confirm that we expect H2 margin to be higher than H1 margin.

Thank you very much. Maybe on the gross margin, I don't know if you can add.

Sorry. On the gross margin, gross margin is always very difficult to forecast.

What we see is that on one hand, we have some positive from the channel and the product mix, especially recovering in leather goods and in handbags. Then we have probably, in terms of regions, still suffering in China is less positive for the gross margin.

All in all, we see ups and downs, but in the gross margin, nothing very special to comment.

Thank you,

Armelle. We'll now switch to Erwan Rambourg from Goldman Sachs.

Erwan, please could you open your mic?

Hi. I hope you can hear me.

Erwan from Goldman Sachs. Congrats on stabilizing sales and delivering higher margins on fashion, leather.

Two questions, please. One on nationalities: I'm wondering if you could tell us about sales growth by cluster: the Europeans, the Chinese, the Americans.

I'm wondering if the strength of the renminbi means that Chinese are maybe doing a bit better abroad than at home, similarly are Americans growing more abroad than at home? I think, Luca, you mentioned a few times Korea as a standout.

Is the weight of the Korean nationality relevant, and are you seeing any volatility in terms of demand given the volatility in terms of wealth creation in that market? Then secondly on channels: you have wholesale in fashion, leather relatively aligned or even slightly better than retail.

Does that mean that that channel is clean, and should we expect wholesale in H2 to be aligned with retail trends? If I can squeeze a little one more on channels: the retail downsizing to net closures of 100 units this year, how are you thinking about next year?

I think you said, Luca, that you were executing very quickly on that. Maybe you have a clearer view of how many you might shut in '27.

Thank you.

I think I'm going to let's say start from the last one, and maybe then leave it to Armelle or Jean-Marc, if you want, for the other two. I think we're going relatively fast.

One thing is important is that the whole work, of course we do it with the brands, but we have pretty much centralized the whole discussion on real estate under Jean-Marc's leadership, okay? We have a system where it's not chopped brand by brand, but we are able to coordinate with the brand and make this kind of decision and execute the plan.

We said a few months ago, at the time in April, that we would look at closing 250, let's say, stores across brands by 2028. We did 84.

2030.

Sorry, 2030, right. 2030.

We are faster right now. There's no reason why we shouldn't look at all the opportunities.

I think we can do at least a similar thing in 2027. Of course, the first one is easier, the last one are more complicated.

The good news is that we are doing it, it's not like a promise that stays up in the air. Is real.

At the same time, we also committed to relocate or renovate 2/3 of the network. All the brands, and Gucci and Saint Laurent and Bottega, etc., are also accelerating the plan of renovation of the thing or relocation.

It's something out and something in the stores. We'll try to keep the pace.

Because 84 stores on the paper is 5% of the entire network, right? The drag of this thing having less sales point has not particularly impacted the H1 result.

It shows that we're doing the thing properly and moving people from one store to another and finding other solutions. We are confident that by doing that like this, we can continue the process in an healthy manner without impacting fundamentally the performance, and if possible, and this is the plan, to make it qualitatively better, because we're going to close outlets, like Jean-Marc said, or places that are not productive, okay?

Then you have a question on wholesale dynamic and nationality.

Yes, let me answer to you on the nationalities first. American, actually all nationalities improve sequentially to Q1, albeit in varying degrees.

The Americans improved. Now they they improve actually to high single-digit positive, both locally, but also as tourists, especially in Europe, but also in Japan.

Other Asian, mostly driven by Korean, turned positive, like European customers also turned positive in Q2, and Chinese customer as a clientele stayed negative, but improve from Q1 sequentially, as Japanese and Middle Eastern customer. Basically, all nationality improve with a strong high single-digit positive for American customers, both locally and when traveling.

Regarding wholesale, you sometimes have some phasing effect in wholesale, it's not always very easy to forecast, but the idea is roughly to to to stay roughly flat in H2.

Maybe I will add a few colors, both on the retail network and on the wholesale. First, regarding the retail network, just as a reminder, during the Capital Market Day, the idea of reducing by 250 was phased the following way: 100 in '26, around 100 in '27 and '28, and the remaining 50 stores around '29 and '30.

What we see clearly is that we can move faster, and as said by Luca, clearly if there are some opportunities, because we need always to assess the risk and reward of closing a store. The risk being not being able to repatriate the demand in another store, and also the cost to close the store.

We try to balance everything, but I think that reasonably, we could go faster than the initial plan in terms of reduction. When it comes to wholesale, I will just add that beyond the figures and your expectations for the rest of the year, what is here very interesting is that there was a clean-up globally of the wholesale because we did it, but also because there was a natural clean-up of the wholesale distribution, with few distributors which have disappeared.

In a way, now there is a more clear picture when it comes to the quality of the qualitative distribution. After a phase of plateau, probably we have no taboo with Luca when it comes to distribution, be it online or wholesale.

There will be some opportunities to regain some market shares and business with some wholesale accounts gradually.

Thank you,

Jean-Marc. I just wanted to follow up with Armelle on the Chinese cluster, just at home versus abroad.

I don't know if you're seeing benefits from a stronger renminbi helping Chinese abroad.

We saw sequential improvement both at home and when traveling.

Okay. Thank you very much.

Thank you, Armelle, and let's now switch to Thomas Chauvet from Citi. Thomas, please could you open your mic?

Good evening, everyone. Thanks for taking my questions.

The first one, maybe Luca, on production and quality: at the CMD, you explained how product quality was key to drive client trust, how you wanted to be more powerful as a group to impose better quality standard to your suppliers. Could you give us a bit of color on what you've already initiated and also remind us the gross margin implication?

I remember you said it would have a negative impact on '26, maybe '27. Secondly, on jewelry, could you quantify if this was material, the tailwind of the conversion of I think franchises from wholesale to retail in the Q2?

Is that going to last for more than just a few quarters, and which brands and regions benefited from that? There's a big gap in growth between retail and wholesale, particularly in Q2.

Just maybe for Armelle, clarification, OpEx, you said down on a full-year basis now, rather than flat. Is it perhaps flat in H2, down low-single digit on full year, or you're also working on reducing costs in H2?

Thank you.

I'm going to take the quality part, and then I leave it to the second one to the master of jewelry that is sitting on my left, for you on my right. Let's say what we did is first of all, it's important to say that we have established a central industrial platform, okay, or a team who is taking care of different topics, including manufacturing standards, suppliers, purchasing, let's say engineering the ecosystem of supplier, logistics, and quality, okay?

Which we never had before. The objective being trying to have a one approach, a luxury approach, to quality, okay?

Which of course we had here and there, because otherwise we would not have some of the best houses on the planet, but there was a form of dispersion of the practices and the standards to that. Very important thing is that I feel, and I felt right from the beginning, that we need to have a different, let's say, setup between us and the supplier.

We need to decide, and this is what we're doing, what we make, what we buy, on the different categories. We have a plan to reintegrate almost, if I remembers the numbers correctly, but almost in some cases double the percentage of things that we produce inside on our plants, also because we need to feel the capacity because we have something like 37 plants in Italy that are not completely utilized.

I will reintegrate part of the thing selectively. When you do this, it's easier to control the quality standard and to set a methodology of doing it, especially also because you can embed right from the beginning the concept into the product.

I think there is room to reduce the span and the numbers of suppliers. When I was in Florence, I told you that we had more than 4,000 suppliers across, let's say, the brands.

I'm talking about the fashion and leather good part. 25% of them would do 98% of the production.

There's long queue into it. When you have a long queue, it's less easy to control.

We're going to concentrate on our production, our externalization on a smaller number of suppliers, and it will give us a chance to set very, very clear standard and to have rule of engagement with the supplier that are clear to everybody. The other thing that the supply chain in Italy has a lot of layers.

I think it's probably a three, four layers supply chain. We probably need to consolidate and basically flatten the supply chain, and this will give us a chance to secure a higher standard in quality.

The last thing I want to say, you said that this quality push, etc., would have an impact on 2026. What I said at that time is that we have embedded into the plan let's say the idea that we could spend more COGS to improve the quality, okay?

That's what you say, and this is still true. That means I don't want industrial people to take the excuse that they don't reach some quality, let's say, levels that we need and we pretend, just because of money, okay?

That's already in the system, and that's changing a lot of things. Take leather goods, where some famous bags we have originally had a certain quality of leather, and then someone decided a few years ago that we should change the quality, and now we're going back and we're putting something that is even better than what it was at the beginning.

This is an example, but there are tens and tens of example like this in the house. We're a luxury house, there is only one level of quality: this is excellence.

It's very simple, and we have to ensure it. You have the one on jewelry?

What Armelle said about wholesale for the fashion and leather goods brands, it's also true for jewelry in the sense that in the trends you see, you have also some phasing effect, especially at Qeelin and Dodo. When it comes to your specific question about the integration or the retailization of part of the business, it's at Boucheron.

We have changed the way we operate in the Emirates at the end of '25, so that we have now a direct operations, while before it was a franchisee. That being said, for the performance of Boucheron in retail, besides this retailization, the performance is still outstanding if we restate from this retailization.

If we look more specifically at the wholesale performance of Boucheron, here again, if we look just at the business with the dealers, besides the franchisee, it's strongly up. It's very coherent in terms of performance for Boucheron.

Difficult of course to predict for the following of the year, even if I guess that H2 should be less dynamic in terms of wholesale for Qeelin and Dodo, especially Qeelin, because we had a lot of deliveries at the beginning of the year after a year where, at the end of '25, our distributors, especially in Asia, were a little bit short in terms of inventories.

Armelle, on OpEx?

On OpEx, I confirm that OpEx will be down for the full year, and I won't give you more detail at this stage.

Reminding that something which was very important in the presentation of Armelle was that it's minus 5% in euros, but it's minus 3% in constant currency. Depending also on the evolution of the currencies during second semester, at the end of the day, the decrease of OpEx could vary a little bit.

Thank you, Jean-Marc. We now have a question from Charles-Louis Scotti, Kepler Cheuvreux.

Charles-Louis, please could you open your mic?

Yes, good evening. Thank you for taking my questions.

I have two. The first one on Gucci: given the large number of stores closures and with sales down only 2%, I believe Gucci comparable store sales growth has finally turned positive again.

Could you confirm whether that's the case, and if so, by roughly how much? I was also quite impressed by the Gucci 9% retail comparable sales growth in APAC in Q2.

What were the main drivers of this improvement, and which market contributed the most? I assume Korea was supportive, but if you could provide some color on the Gucci performance in China and also indicate by how far it was below the regional average, it would be helpful.

My second question is on Gucci and the Gucci Racing Alpine Formula 1 team partnership. I think I understand the strategic rationale and the potential benefit of this partnership for a luxury brand like Gucci, but could you elaborate on how you intend to leverage it beyond simply having the Gucci name displayed in Formula 1?

Also, we have seen a wide range of estimates regarding the financial commitment involved, some of which seemed quite speculative, but could you give us an indication of the size of this investment, or at least whether it represents a meaningful portion of the Gucci A&P budget? Thank you.

I'll take maybe on on the first one, what I can tell you, we won't, be extremely, let's say, granular on this, but what I can tell you is that one of the things that we did is we actually concentrated on, on Gucci, on 100, 120, what we call laboratory of excellence, in retail. These are the 100, 120 top stores.

Just by to be pragmatic, and we start focusing on that part of the network that is the more, let's say, performant, and therefore also the more reactive to new initiatives. On those store in on those stores, Gucci is doing well, okay?

Then, the growth, etc., are so many channels things, the situation is very difficult for you, for me to answer in a very specific way without giving you too much of the information. The good news is that on the best part of the network, Gucci is, reacting very well with, with the new collection, etc., etc.

Maybe the second the second question, maybe, you can give an answer. I take the I take the Gucci Racing thing, because of course I like the question very much, and I'm I'm just going to give him the chance to tell you a little bit about what this project means and the potential of this thing.

You want to take the second one? Okay.

Yes. For Gucci in APAC, yes, has been an improvement, quite important improvement in the region.

Mainland China remains soft, but improved significantly quarter-on-quarter. Greater China also improved, with Taiwan turning positive and Hong Kong being a bit softer.

As I said, also, Gucci had a positive performance in South Korea, even if it was probably a bit below the pace that we saw in that market.

F1, I think I know the topic pretty well. I know the potential of this platform.

We actually see it as a platform, just more than a sponsorship. I have to remind you that there are at least 100 million people looking at 24 Grands Prix every other week around the world in at least 20 markets out of the 24 where we have a commercial presence, so that we can link the event to our retail, etc., and create a lot of initiatives.

The contract was structured, I think, in a very innovative way where it is not about just putting a sticker on a car. It's the whole complete image of the team, and we also control the merchandising.

Based on that possibility, what we're doing is that we have created a small division, but very competent team in Gucci that we call Gucci Racing, that will be responsible to develop also products that we will be able to sell with the Gucci Racing thing. That means this is for us a way to engage in a smart way into the sportswear category and everything that comes together.

I believe that there is a real opportunity to make business out of it, and I'm convinced that with that business, we probably even more than compensate the cost of this sponsorship. That's the target.

This thing, Gucci Racing, will start with Formula 1, but is also about an umbrella brand for any sport activity, whether it's tennis or other initiatives that Gucci will take, okay? I can tell you, also, that from a cost point of view, from a condition point of view, I really made sure that the money we would invest in this thing is at the right level, because I know very well the numbers in Formula 1, okay?

I can guarantee you that what I've heard and seen in the press is higher than what we actually investing into the thing. This a important, but not fundamental part of the A&P budget of Gucci.

I think we can do something really good, is innovative, is giving us the chance to touch global target, and to be on a platform that will create vividness and presence of Gucci in a interesting manner, because we are on a track, we compete. There will be weekends where we win, there will be weekend where we lose, and that's also the part of the drama and part of the interest in such kind of thing.

In fact, among the key messages delivered by Armelle and by Luca, there is also the question of being disciplined in terms of cost, but also efficient. I think that a message that has been already shared is that we have a work of selecting the investments which are delivering return, reallocation of costs, so that at the end of the day, the A&P budget of Gucci will not be materially impacted by this investment, that will be for sure absolutely productive and deliver a high return.

Thank you, Jean-Marc. We'll now switch to Vika Petrova from Barclays.

Vika, please could you open your mic?

Thank you so much for giving me this opportunity, and congratulations on results. I have two questions.

First is on Gucci's sales densities and like-for-like performance. I understood you commented that it's up.

Could you comment on sales densities in this context as well, and did I understand it correctly that you are likely to open more than 100 stores this year? My second question is from our credit analyst.

There is a question with your obviously cash generation and plans, do you expect any gross debt reduction, any buybacks? Just two clarification for confirmation: when you talked about flattish third quarter, is it group organic, Gucci organic, or Gucci retail organic growth?

It's a reference to Luca's comment. My final quick just confirmation: are you keeping your guidance of all brands being positive in 2026, or it's now a group guidance?

Thank you so much. Closing them.

Closing them. Not opening.

Closing, of course.

Sales density, of course we're doing the work to sell more in full price, reducing the number of stores and the square meters. Of course one of our target is to increase the sales density, and we're seeing some positive signs here and there that this thing is happening.

Do you have a second question on cash?

On gross debt reduction, any plans to reduce gross debt and go through any buybacks?

You can answer to that.

We had of course significant reduction in H1. In H2, you should expect a further reduction coming from cash flow generation.

Yeah.

You ask about the flattish Q3. Again, this is what we see right now, but every day we fight to actually do better.

We see a kind of flattish Q3 for the group, where as I said, this thing is not going to be completely linear, but what matters is that at the end of the year, we are there where we have hoped and committed to. That was the nature of my comment.

Then you have another question is No,

I think you answered.

I went through it, yeah.

No, but you mentioned share buyback, I think. I think we want to be very clear.

We had re-insisted on the capital allocation during the Capital Market Day. Today, the priority is to invest in our brands, to continue the deleveraging of the group.

At least for this year, there is no plan of share buyback.

We now have a last question from Zuzanna Pusz, UBS. Zuzanna, please could you open your mic?

People taking my questions. Sorry, mine are a bit boring, just the good questions are gone.

Maybe the first one just on and Then

not on Gucci this time. Maybe change brand.

That would be a follow-up. It doesn't count as more than two or three.

Maybe the first question just on inventory: so, you've mentioned that you're still committed to the 1 billion reduction, but unless I'm completely wrong, when I look at inventories in H1 as a percentage of sales, they seem pretty similar versus last year. I'm just wondering if maybe there's something related to, I don't know, like store openings in jewelry, anything that kind of could be maybe inflating that number.

Secondly, again, this is a boring one, I'm sorry, but I think when I look at the numbers, the corporate and other costs went up quite a bit. I'm just wondering, is there any, I don't know, any kind of reallocation of costs that we should just take into account as we model going forward?

Then, that is actually not on Gucci, but it's another follow-up: on the Q3 being flattish, and as you said that's what you're seeing right now, can I just check: was it retail for the group, or retail and wholesale? Because you're clearly doing so much better in Q2.

I'm just wondering what could be driving that expectation for flattish in Q3. Maybe there is some wholesale timing, or maybe you're just being cautious.

These are my two questions and the follow-up. Thank you.

You want to go for it?

Yes. Regarding the inventory target, first, it's important to remind you that this is an inventory target for our Fashion and Leather Goods brands, and it's from September 2025 to December 2026.

You cannot read it completely in the number, and we are confident in delivering this target. That was for the first question.

You may have some increase in the other segments, but what we are working on is really to decrease inventory for the Fashion and Leather Goods this year, but of course we want to be more efficient going forward in terms of the amount of net inventory to sales. I think it's something we mentioned during the Capital Market Day that over the next 5 years, we will improve and decrease the percentage of net inventory to sales for the Fashion and Leather Goods brands.

This is

the cost of corporate?

Okay. Cost of corporate, yes, we had an increase that is due to the rental that we don't have anymore on the disinvestment that we did on real estate.

If you correct it from that, it's roughly stable. The corporate costs are roughly stable.

To follow up on this, we should forecast it sort of as a percentage of sales as we look at H1, or is it kind of like a one-off just to understand how we should model that line going forward

for the full year,

let's say?

No, on corporate, those rental expenses, we won't have them neither in H2. Basically, what you see now is the cost of corporate going forward.

We are,

yeah.

All right. Thank you.

Okay.

I think there was a question about Q3 dynamic, if I'm correct. Do you want to jump on that?

No one wants to answer it.

No, I can answer.

We can. We are fighting to answer to you, Zuzanna.

I'm just joking.

No, you can answer. No problem.

Go. No,

I think, as was mentioned by Antoine, there is a comp base in Q3 that is much more demanding. We also know that in terms of product newness, Gucci Primavera is rolling out in store as of the second part of July, and we will have a strong marketing campaign as the end of August.

In Q4, we will have much more product newness because we will have the two collection, the one of Primavera and the one of Core Cruise. Also, last point, you see the macro environment is still very volatile.

We are also careful in an environment that remains very volatile. Perfect.

Thank you very much. That was very helpful.

Thank you, Luca, Jean-Marc, Armelle, and thank you to all of you who join us tonight. Of course, we are available to answer all your questions in the coming days if needed, and have a good summer.

Thank you. Have a good summer.

Thank you.