Hermès and Kering hit record stock spread on earnings

Shares of Hermès ↘ 7.16% and Kering diverged by a record margin on Wednesday, with the gap between the two French luxury rivals exceeding 20 percentage points — the largest single-day spread in data going back to 1993, according to Bloomberg.bloomberg

Kering surged nearly 17% to its highest level since early February after its flagship brand Gucci delivered better-than-expected second-quarter sales, while Hermès tumbled roughly 11% as investors flagged disappointing momentum in China.finance.yahoo+1

Gucci's Turnaround Gains Traction

Kering reported late Tuesday that Gucci recorded revenue of €1.41 billion in the second quarter, a 2% decline on a comparable basis — far better than the 4% drop analysts had forecast. The result marked a notable improvement from the previous quarter's 8% decline, though it still represents the 12th straight quarterly sales drop at the brand.reuters+1

Gucci sales in the United States rose 9% in the quarter, accelerating from the first three months of the year, as demand for new handbag lines helped drive traffic, according to Reuters. Overall, Kering's revenue rose 2% on a comparable basis in the second quarter, just above analyst expectations of 1.7% growth.globenewswire+1

Hermès Stumbles on China Weakness

Hermès reported revenue of €4.09 billion for the quarter through June, an organic increase of 6.7% from a year earlier — an acceleration from 5.6% growth in the first quarter. But analysts noted a lack of a convincing rebound in China, where Hermès revenue in the Asia-Pacific region rose just 2.5% from a year earlier, according to The Wall Street Journal.wsj

For the first half of fiscal 2026, Hermès reported net income of €2.238 billion, essentially flat compared with €2.246 billion in the same period last year.finance.yahoo

Diverging Luxury Fortunes

The record spread between the two stocks underscores the contrasting positions of the luxury sector's major players. While Kering's new leadership has focused on reviving Gucci through fresh product launches and a U.S.-driven recovery, Hermès faces questions about whether its premium pricing model can sustain growth as Chinese consumer spending remains subdued.reuters+1

The broader European market offered little tailwind. The pan-European Stoxx 600 ended 0.29% lower on Wednesday amid rising Middle East tensions after joint U.S. and Saudi strikes in Iraq targeting Iran-backed militias.finance.yahoo