Operator: 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.

Luca de Meo: Good afternoon, everyone. And thank you, of course, 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 are making across the group. So H1 has been about turning strategy into action and action into results. Three months after our Capital Markets Day, we started to execute our brand's 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. So sort of optimization is not only about reducing our footprints. It is also about upgrading, renovating, and elevating our most strategic locations. And 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. So 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. So we achieved this progress despite the market environment that, as you know, remains uneven and demanding. And in such 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 examples of the progress we have made since our Capital Markets 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 7 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 collection in April. And since mid-July, the rollout of Primavera, which by the way, was the first Demna fashion show presented in Milan last February. On the desirability front, recent initiatives have been well received. The Primavera fashion show and the Gucci Cruise show in New York at Jane Street generated strong global media and ranked first worldwide in earned media value. And this reflects Gucci's ability to be back at the center of the conversation. The creative road map is clear. La Famiglia was designed to reconnect with Gucci's roots. Primavera aims at reigniting fashion leadership and Gucci 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, coherent offer. Recent launches such as Borsetto or Paparazzo, with carryovers like Giglio, are supported by dedicated product-focused campaigns generating strong engagement, especially in Asia. We continue to bring Gucci's culture 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 territory of expansion. Another important milestone came on July 7 with the announcement of the exclusive beauty license agreement between Gucci and L’Oréal, one year ahead of schedule. Thus, we are creating strong long-term platform for 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 desire a bit, it takes time, our teams I think, are fully mobilized across all fronts to restore sustainable growth as quickly as possible. Switching to Saint Laurent. The house returned to growth in the first half. We are consolidating fundamentals while working on the key pillars that will drive the next phase of growth. In Asia-Pacific, we are sharpening execution through more localized campaigns and activations. At the same time, we are 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 its product offer and strategy. The house continues to enrich 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. So as we look ahead, I am also pleased to welcome Romain Spitzer, who will join Bottega Veneta as the CEO in one month's time, whose mission 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 the 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 propositions such as the Rodeo, 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, 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 rightsizing of the organization and a greater leverage of group and shared capabilities. The recent appointment of Gianfranco D'Attis as a CEO 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. 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 reinforce their visibility through their latest high jewelry collections. At Boucheron, the Human Being 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 contemporary fine jewelry. At Qeelin, we continue to strengthen the Maison's unique position at the intersection of Chinese culture and contemporary luxury market. Momentum remained particularly strong in Asia-Pacific with outstanding performance in South Korea. As highlighted during our Capital Markets Day, we also see significant growth potential in jewelry across our fashion houses. The recent high jewelry activation of Gucci in Jane Street 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 the luxury over the last decade. 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 structure with the recent appointment of, as I already mentioned, of Romain Spitzer, CEO of Bottega, Gianfranco D'Attis as the CEO of McQueen; Anouk Duranteau-Loeper as the 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 you know, rapidly and it is becoming more selective, local and more experience-driven. And 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. It is one of my key priorities for 2026, and I will return with the team in November to review the first tangible sign 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 am 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 across the group, make better decisions, and scale best practices. We are investing in a stronger more sustainable supply chain ecosystem to enhance quality fostering 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, bag cutting. And this approach is already translating into greater collaboration across houses with Bottega Veneta, Balenciaga, Saint Laurent, leveraging selected Gucci industrial assets. Beyond driving competitiveness, these initiatives also enhance traceability across our supply chain. So technology is becoming part of Kering's operating system. Helping us make faster, smarter, and more informed decisions across the value chain. This is the ambition behind 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 foundations are already in place. A single cloud-based data platform, digital twins across clients, 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. And the next step is to build on this foundation by progressively deploying AI agents capable of supporting and orchestrating execution across selected processes. And 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 road map 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 thousand sustainable materials including 3.7 thousand non leather alternatives. We are also fostering innovation beyond our own organization through initiatives such as the Caring 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 a Kering gathering high potential talents from across our houses functions and region 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 connecting the next generation with luxury. Akering 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 advisers can access relevant client insights and product recommendation 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 continue to strengthen our houses, and we made concrete progress in building a more agile and disciplined organization. Now, Armelle, it is time for you to take us through the financial results in more detail.

Armelle Poulou: 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. And 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 6 months. Revenue was €7.2 billion, up 1% on a comparable basis with a return to growth in the second quarter. Recurring operating income came to €921 million 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, 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 2-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 3,005 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. over the half FX weighed on reported revenue by close to 4 percentage points largely concentrated in the first quarter. In Q2, the drag eased to around 1 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. We 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 6 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 return 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 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 Jewellery. Eyewear revenue increased 8% comparable reflecting the strength of a business model that is wholesale driven. Jewellery 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% in the quarter a 6-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 in the first half with a margin of 12.8%, up 40 basis points year-on-year 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 these 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. And 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. Revenues stood at €5.8 billion in the first half, down 1% comparable. In the second quarter, revenue reached €2.9 billion, and the segment turned positive. 3 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. Ready-to-wear 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 amongst both VIC and core clients. While Mainland China and the Middle East remain 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 rebalanced 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 repositioning under its new CEO, strengthening the foundations of the brand and rightsizing its distribution network. BRIONI continued to deliver another quarter of strong performance. Segment profitability also improved. Recurring operating income was €828 million, 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 in the first half down 5% comparable. In the second quarter, revenue reached €1.4 billion, with the decline narrowing to 2%. 6-point improvement versus Q1. New collections continued 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. 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, a 17% margin up 1 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 Jewellery was once again one of the standout performers. First half revenue reached €521 million, up 20% comparable. In the second quarter alone, revenue reached €252 million, 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's iconic Quatre collection. Pomellato also maintained strong momentum driven by continued strength in Japan as well as in North America 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 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 this integrated model and remains a reliable source of profitable growth diversification for the Group. Recurring operating income was €222 million, 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 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 nonrecurring 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, 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 points compared with year-end 2025. 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 nonrecurring items reached €355 million. 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 Beauté 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 €62 million representing an improvement of €863 million year-on-year and reflecting continued discipline in inventory management. Reducing inventory remains a priority, 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 continuing to fund the newness our collections require. This 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, a reduction of €4.7 billion compared with year-end 2025. Three elements contributed. The €4 billion proceeds from the disposal of Creed Beauté and real estate transactions completed over the period included the €700 million proceeds from the sale of Via Monte Napoleone. Net debt to adjusted recurring EBITDA stood at 1.4x, which we consider a healthy level. In the first half, we paid €490 million in dividends in line with our payout policy. Our capital allocation guidelines are unchanged. M&A restricted to selective bolt-on acquisitions reinforcing supply chain and expertise, a disciplined approach to shareholder returns. So, growth returning. Profitability improving, a materially stronger balance sheet. That is the financial picture at the half year. Luca, back to you.

Luca de Meo: Merci, Armelle. So as you as you have seen, the action taken over the past month are beginning to generate encouraging signs. The return to growth in the second quarter was, I think, an important milestone. But we are still at the beginning of the journey, we remain realistic really realistic about the challenges ahead. Our priority now is to execute ReconKering roadmap, continue improving profitability and further strengthen the foundations of Kering for the long-term. On that basis, I would like to take the opportunity to confirm the guidance we shared earlier this year. And the guidance was growth and improved profitability in 2026. Versus 2025. I think we are now available of course, to answer all your questions.

Operator: So we will now open the Q&A session. Please open your mic and try to limit you to two questions. We will start with Edouard Aubin, Morgan Stanley. Edouard, please, could you open your mic?

Edouard Aubin: Yes. I think that is all good. Can you hear me well? Yes. So good evening, Luca and team. So yes, congratulations for the clearly the encouraging developments. So two questions from me on Gucci. The first one, Luca, you talked about progress to the product distribution communication, etcetera. I mean, fundamentally, what makes you confident that Gucci now is really on the on the right track? So that could be question number 1. And then question number two, in terms of the from a commercial standpoint and the trajectory of recovery, If you look at consensus, expecting, you know, already to turn positive in Q3 despite the more difficult comp base. Do you think that is within the possibility And then, you know, 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 is still achievable for Gucci to post a positive performance for the full year? So that would be my two questions. Thank you so much.

Luca de Meo: 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 is done on suppliers, etcetera, etcetera. What makes me confident is that Gucci is an incredibly popular brand Of course, all the eyes are on Gucci, but when it turns positive, everybody will actually realize what is going on because everybody is looking at it. I think we have a strong management team. there. They work very well together. They are becoming faster. there is a lot of things that they to fix. Look at what indeed we did in retail. I remember that we were guiding at not on Gucci, on the 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. So they are rationalizing a lot. I think that you have to take into account that the real first complete collection of them is actually hitting the stores. Right now. We will start to communicate in the next week a lot with a very strong campaign. What we have 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. So the thing is there is nothing you, you know, 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 are doing them. Now looking ahead, I through the year, I think what we can commit is, as I said before, is a growth. This is visible for the group. I do not think it is 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. So far, it seems that, you know, the machine is under control. one of the things I am 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 internal things, as Armelle mentioned before, from stocks to cash to margins, etcetera, etcetera. We so far we have been good at doing at least what we have promised. So I can, for sure, commit that the team will be fighting and even the Gucci team, from now to the December 31. To comply the commitment we have made. But I feel based on what I said before that it might not be linear, but that is it to me is not particularly important. Important is that we continue to progress as including Gucci in the in the second quarter as proved. Great.

Operator: Thank you. We will now switch to Alain Bismuth from HSBC. Alain, please, could you open your mic?

Alain Bismuth: Yes. First question is on Gucci. So just to confirm that on the recently launched Primavera collection, are you 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 along the turnaround of Gucci in China can take even that the brand desirability has been damaged. And my second question is for Armelle about OpEx management. So 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. So should we expect the same decline in the same decrease in OpEx for the full year, meaning around 5%? Thank you.

Luca de Meo: Maybe I-- you want to start? I do not know. You want me to start with the Gucci. I will start with the Gucci with the Gucci part. I think it is 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 hit the first store. it is a part of it on July 15. We will start communicating by the end of August. And by then, all the all the palettes and all the offer will be in the store. So I think we could we will be able to talk about that next time we see each other. But I think we say, we are pretty confident. As I said before, that is the first complete collection that the new creative, the new artistic director has performed. So it is very important. On China, you are right. There is a lot of work that has to be done, fundamental work. that is why we were there. Last week altogether. I think we the first thing we have to do is to make sure that we have a we can clear the table from maybe unorthodox practices that we had in the past in into that market. We have to respect that this is becoming one of the most challenging and competitive market in the world. But 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 it going to take weeks. I do not think so. I think it is probably one of the most important we have, not only for Gucci, but for all the brands. Because, as you know, carrying in China in general has not captured all the potential of the market. But it is an opportunity and an upside if you do it right. I think we deserve a bigger market share. Even if we know that everybody is competing for the 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.

Armelle Poulou: And also on OpEx, as you say, 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. So 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.

Operator: So we now have a question from Oliver Chen, TD Cowen. Oliver, please could you open your mic?

Oliver Chen: Thanks so much, good to see you all, Luca, and Armelle. Regarding Gucci, what are the key catalysts in terms of the collections ahead? And would you expect the North America performance, which has been tremendous, I suppose, to outpace Asia-Pacific and as North America has been somewhat super normal, but very encouraging with so much wealth effect. Second question is on supply chain and artificial intelligence. How are you interacting with AI relative to driving inventory management, which is a huge opportunity? And cultural relevance as you have had that cultural relevance dashboard. Thank you.

Luca de Meo: Oh, the second one is a complicated 1. It will take me an hour and a half to explain to you, what are the main things we are doing. I would start from that 1. I think that I mean, the objective is to make Kering one of the company 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 into pretty core application in of AI in our daily life. I think there are three areas where there is really potential. I will I will use a slogan is I tell to the people, we follow the money. We follow the product. And we follow the client. So 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. And it is I would not say I mean, the it is a again, it is a beginning of a journey that will last years etcetera, 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 you know, on the detail of the project. But this core activity for us as a team. As you know, we have also onboarded new competencies in the house people that have already done that in other companies, And so I am I am very positive about it. On the Gucci thing is it is a process. The we were out with collection at the beginning the year, like, 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 on only because I think Primavera was adding probably 20 SKUs distributed in the beginning in few stores. And of course, with the new one, we are covering the whole thing. So if I project simply the performance of the first two collections, and multiply them by the variety of product that will come with the with the collection that with the Primavera, I feel that we are in a better place. But know, it is not only this. A lot of things are going on Gucci. We have to be become better at, you know, in many dimensions which we are 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. So I think it is, you know, a big work, but we as I said, the few minutes ago, I think we know what we have to do. And we are doing it. If I may, I would add something, Luca.

Operator: 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 whole sector globally.

Jean-Marc Duplaix: But what is very encouraging when it comes specifically to Gucci is that where the brand equity is the most sound, and it is true that in The U.S. or in North America, historically, Gucci brand equity, brand perception remains quite high. You see that there is an 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.

Operator: So we now have a question from Luca Solca, Bernstein. Luca Solca, Luca, please could you open your mic?

Luca Solca: Thank you very much indeed. Philippine. Hello, Luca, Jean-Marc, Armelle. I have two questions. 1 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 you are thinking your strategic thinking is on where the core brands should be pricing. I think you have shown you are 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 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 in 2026. I wonder how the dynamic of inventory reduction is going to play out. How much is it connected to reducing inventory that would 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 give us of a granularity on the off price channel at the moment, that would be fantastic. Thank you very much.

Luca de Meo: On pricing mix, I mean, both question that would require a lot of time to be honest because it is it is both of them are on multidimensional 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. So 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 1 side, we are cleaning up and reducing everywhere we can and in every way we can The off price, you know, the practices because I think we have to protect the full price. This is the strategy. We are looking at and as an as a very competent and analyst, you I am sure, you have seen that the new collections on most of the brand, take, for example, Gucci, is competitively priced on the new product. And we have also in a few cases, kind of reposition some of the products. Because I have the feeling that in some categories, we kind of went too far. Play with the elasticity. And I have to tell you, I cannot, you know, kind of unbuild details, but sometimes that had very big impact on the volume. So the elasticity was not exactly linear was exponential. So we continue to look at the pricing structure. And we are very much determined in trying to align pricing to intention to buy desirability And at the same time, there is a lot of work that is being done so far, and it is embedded in the plan to you know, push on quality, you know, content because that is the way you create this ability, and then you create we are in the luxury market. So we are here to sell dreams. You are here to sell excellence. So the best the best way you can do that is improve the product quality and the services. So 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 you know, into you know, for the customer. We have to come up with very competitive product, very high quality product very creative product at the right price. On the stocks, have to say, and then maybe I will 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 billion reduction of the stocks We are on track. On that. So 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, you know, the first one00s of millions are easier, and then you get to a system I mean, to a system where it is more difficult to reduce unless you change the system completely. This is what we are also planning. Now, to give you an example, the way we are able to the way we are able to produce, the way we are able to refurbish. You know, and to replenish, sorry, the stocks is one of the discussion we are having on the industrial side. And Gucci, for example, is changing the way they are buying. And integrating you know, faster replenishment cycle. But they require it requires a kind of reengineering of the industrial process plus the ecosystem of the suppliers. But that is the intention. We wanna continue to go down. And we know exactly where the benchmarks are, at what level are the benchmark. And we are determined to build the houses of Kering houses of carrying being amongst the most competitive in this field. I hate stocks. I think it is it is it is not a good thing. So we will have to design a machine that is different. Right now, we are driving the machine very, very well. We are hitting, you know, all the, let's say, the you know, the target we gave ourselves. it is also true that I will not reveal exactly the number, but it is also true that we made some very brave decision on reducing production for this year. And I am 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?

Armelle Poulou: Maybe what I can add is that this achievement has been done by teaming people from the different brands altogether. Think that was a great opportunity to benchmark the practices between brands. And at the end of the day, to decide to have 1 process getting the best of each of the brand experience. And I think it was it is 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 own. So for me, it was a very interesting experience in how we can team the brands behind a very strong and demanding target. And that is really what we are doing in many different directions.

Jean-Marc Duplaix: And 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. And two important message we had presented some ambition during the Capital Markets 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. So that is still part of the journey we are engaging in. Thank you very much indeed.

Operator: Thank you, Jean-Marc. So let's now switch to Antoine Welch, BNP. Antoine, please could you open your mic?

Antoine Belge: Yes. Hi. it is Antoine Belge, BNP. Good evening to all of you, and, yeah, congratulation 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 inasmuch as I hate to call them non-Gucci brands, so it seems that the other brands cumulated were up 2% in the quarter. Maybe there is some rounding. Which would be the similar growth rate than in Q1. So, could you say if the math is correct and which brands may might have accelerated and maybe another brands might have decelerated notably on the main 1, BV, Saint Laurent, Balenciaga. And the second question is I think before the results you had indicated that the H1 margin would be lower than h two. So this is very strong beat in H1. I am reconsidering this. Like it was a conservative assumption. Or could we think that 12.8% is like a floor and then, yeah, we would be at least doing 12.8% in the second half. And if you could say something on the gross margin evolution, that would be great.

Luca de Meo: Look, I think all in all, you are right. So all the non Gucci, as you call it, the non-Gucci brand, they are growing 2%. it is a mix thing. Saint Laurent and Bottega Veneta are doing great. On the fashion on the fashion side. Balenciaga is in the middle of a creative transition. So I think we have a very good performance on leather goods. And we are trying to find ourselves more on the ready-to-wear and on the shoes. So we will have to give the team time to, you know, to regain a certain positive dynamic. But Saint Laurent and Bottega, very, very good, I have to say. And then do not forget, the jewelry part that Jean-Marc is leading as a division now. And Kering Eyewear, they are giving us a really positive surprise, very strong and very solid management of those two categories. that is what I can say. And, you know, we committed to, you know, growth. In 2026. To 2025. We told you that, you know, we will be better also in terms of profitability. The good thing is we in H2 2025, we were, I think, at 9.8. So this is we are 12.8 on H1 2026. So we keep going Armelle told you that we continue to reduce the cost in an intelligent way. it is also important for me to say that if you look at the numbers, the cost reduction is not actually, let's say, impacting the our ability to invest in the brands. If you look at the money we are putting on communication or investment we are putting on refurbished and relocation of stores, etcetera, etcetera. I think we will continue to do that. So it is not that we are cutting we are cutting on the flesh if you want. So we keep investing. So if you look at that, you can expect us to continue to work on a profitable 2026. Yes.

Operator: Maybe to answer precisely to your question, Antoine, we confirm that we expect H2 margin to be higher than H1 margin.

Armelle Poulou: You very much.

Jean-Marc Duplaix: Maybe on the gross margin, I do not know if Yes, sorry. The gross margin, gross margin is always very difficult to forecast. What we see is that on 1 hand, we have some positive from the channel and the product mix, especially recovery in leather goods and in handbags. And then we have probably some in terms of regions, still suffering in China is less positive for the gross margin. But all in all, we see ups and downs, but in the gross margin. Nothing very special to comment.

Operator: Thank you, Armelle. So we will now switch to Erwan Rambourg from Goldman Sachs. Erwan, please could you open your mic?

Erwan Rambourg: Thank you. Hi. I hope you can hear me. Juan from Goldman Sachs. Congrats on, stabilizing sales and delivering higher margins on fashion leather. So two questions please. 1 on nationalities. I am wondering if you could tell us about sales growth. By cluster, the Europeans, the Chinese, the Americans, I am wondering if the strength of the renminbi means they are maybe doing a bit better abroad than at home. Similarly, are Americans growing more abroad than at home. And 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. And then secondly, on channels, you have wholesale and fashion leather relatively aligned or even slightly better than retail. Does that mean that the that channel is clean and should we expect wholesale in H2 to be aligned with retail trends? And if I can squeeze a little 1 more on channels. The retail downsizing, so net closures of a 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 2027. Thank you.

Luca de Meo: Well, I think I am I am going to ask last let's say, start from the last 1 and maybe then leave it to Armelle or Jean-Marc, if you want to for the other two. But I think we are going rather relatively fast. 1 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.

Armelle Poulou: Okay? So we have a system where it is not chopped, you know, 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 or the time of the CMD in April that we would look at closing 250, let's say, stores. Across brands by 2028. We did 84 30. Sorry. 30. And the but we were you know, we are faster right now. there is no reason why we should not look at all the opportunities I think we can do at least, you know, a similar thing. In 2027. But, of course, the first ones is easier. The last 1 are more complicated. But the good news is that we are doing it. So it is not like a promise that is stays up in the air. it is real. At the same time, we also committed to, you know, relocate or renovate two-thirds of the network. So all the brands and, you know, Gucci and Saint Laurent and Bottega, etcetera, are also accelerating the plan of renovation of the thing. Or relocation. So it is something out and something new in the store. So we will try to keep the pace I think that the drag I mean, because 84 stores is, on the paper is, like 5.5% of the entire network. Right? And the drag of this thing having less sales point has not particularly impacted the H1 result. It shows that we are doing the thing properly. And moving people from 1 store to another and finding other solutions. So we are confident that by doing it like this, we can continue the process in a healthy manner. Without impacting fundamentally the performance. And if possible, and this is the plan, to make it qualitatively better, because we are going to close outlets like Jean-Marc said or places that are not productive. Okay?

Erwan Rambourg: Then you have a question on wholesale dynamic and the nationality.

Armelle Poulou: Yes. So let me answer to you on the nationalities first. So American so actually, all nationalities improved sequentially to Q1. Albeit in varying degrees. The Americans improved. Now 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 improved from Q1 sequentially as Japanese and Middle Eastern customers. So 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. So it is not always very easy to forecast. But the idea is roughly to stay roughly flat in H2.

Jean-Marc Duplaix: Maybe I will add a few colors, both on the retail network and on the wholesale. Regarding the retail network, just as a reminder, during the Capital Markets Day, the idea of reducing by 250 was phased the following. Way, 100 in 2026, around 100 in 2027 and 2028 and the remaining 50 stores around 2029-2030. What is clearly 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. There is being not being able to repatriate the demand in another store and also the cost to close the store. So 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 cleanup globally of the wholesale. Because we did it, but also because there was a natural cleanup of the wholesale distribution with few distributors which have disappeared So in a way now, there is a more clear picture when it comes to the quality of the qualitative distribution. So 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. You, Jean-Marc Thank you, Jean-Marc.

Erwan Rambourg: Just wanted to follow-up with Armelle on Chinese, on the Chinese cluster. Just at home versus abroad.

Armelle Poulou: I do not know if you are 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.

Operator: And let's now switch to Thomas Chauvet, from Citi. Thomas, please could you open your mic?

Thomas Chauvet: 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 have already initiated? And also remind us the gross margin implication I remember you said it would have a negative impact on 2026, maybe 2027 Secondly, on jewelry, could you quantify if this was material, the tailwind of the conversion of I think franchisees, from wholesale to retail in Q2? Is that going to last for more than just a few quarters? And which brands and regions benefited from that. there is a big gap in growth between retail and wholesale, particularly in Q2. And just maybe for Armelle clarification, OpEx, you said down on a full year basis now. Rather than flat. So is it perhaps flat in H2, so down low-single-digit on full year? Or are you also working on reducing costs in H2? Thank you.

Luca de Meo: So I am going to take the quality part, and then I will leave the second one to the master of jewelry that is sitting on my left-- for you on my right. So I what I let's say, what we did is first of all, it is it is important to say that we have established a central industrial platform. Okay, or a team with taking care of different topics, including manufacturing standards, suppliers, purchasing, design of let's say, engineering the ecosystem of supplier, logistics, and quality, okay, so which we never had before. And 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 time. Very important thing is that we I feel and I felt like 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 are doing, it is what we make, what we buy. On the different categories. We have a plan to reintegrate, you know, almost, if I remember 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, you know, fill the capacity or because we have something like 37 plants in Italy that are not completely utilized. So I will reintegrate part of the thing selectively. When you do this, it is easier to control the quality standard and to set you know, 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 the, let's say, the brands. I am talking about the fashion and leather goods part. 25% of them would do 98% of the production. So there is long queue. To it. When you have a long queue, it is less easy to control. So we are going to concentrate on you know, our production, our externalization on a smaller number of suppliers, and this 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 you know that the supply chain in Italy has a lot of layers. I think it is probably a 3-4 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. Last thing I want to say is you say that this, you know, this quality push, etcetera, would have an impact on, you know, 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 is what I said. And this is still true. That means I do not want the industrial people to take the excuse that they do not reach some quality let's say, levels that we need and we pretend just because of money. Okay? And that is already in the system. And that is changing a lot of things. I mean, we are taking-- take leather goods where some famous bags where 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 are going back, and we are putting something that is even better than what it was at the beginning. This is an example, but there are tens of examples of example like this in the house. I mean, we are a luxury house. So there is only one level of quality. This is excellence. it is it is very simple. And we have to ensure it. You have the one on jewelry?

Jean-Marc Duplaix: Yeah. What Armelle said about wholesale for the fashion and leather goods brands, it is also true for jewelry in the sense that, in the trends you see, you have also some phasing effect, at Qeelin and DoDo. When it comes to your specific question about the integration or the internalization or the retailization of part of the business, it is at Boucheron. We have changed the way we operate in the Emirates at the end of 2025. So that we have now 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 utilization. And if we look more specifically at the wholesale performance of Boucheron, here again, if we look just at the business with the dealers, so besides the franchisee, it is strongly up. So it is very coherent in terms of performance. For Boucheron. So 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, we had a lot of deliveries at the beginning of the year. After a year where at the end of 2025, our distributors, especially in Asia, were a little bit short in terms of inventories.

Armelle Poulou: Armelle, on OpEx? On OpEx, I confirm that OpEx will be done for the full year, and will not give you more detail at this stage.

Jean-Marc Duplaix: Reminding that something which was very important the presentation of Armelle was that it is minus 5% in euros, but it is minus 3% in constant currency. So 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.

Operator: We now have a question from Charles-Louis Scotti from Kepler Cheuvreux. Charles-Louis, please could you open your mic?

Charles-Louis Scotti: 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 is the case? And if so, by roughly how much? And I was also quite impressed by the Gucci's 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. And my second question is on Gucci, the Gucci racing Formula 1 team partnership. I think I understand the strategic rationale and the potential benefits of this partnership for 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? And also, we have seen a wide range of estimates regarding the financial commitments involved some of which seem quite speculative. But could you give us an indication of the size of this or at least whether it represents a meaningful portion of the Gucci A&P budget? Thank you.

Luca de Meo: I will take maybe on the first one, what I can tell you, we do not want to 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 Gucci, 100-120, what we call laboratories of excellence in retail. These are the 100-120 top stores So just by to be pragmatic, 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. And on those stores, Gucci is doing well. Okay? And then the growth, etcetera, so many channels, thanks. The situation is very difficult for you for me to answer in a very specific way without giving you too much of the information. But the good news is that on the best part of the network, Gucci is you know, reacting very well. We, you know, with the new collection, etcetera, etcetera.

Armelle Poulou: Maybe the second part the second question maybe you know, you can give an answer. I take the I take the Gucci racing thing because, of course, I like the question very much, and it is 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? Yes. For Gucci in APAC, yes, there is been an improvement a very quite important improvement in the region. Mainland China remains soft, but improved significantly quarter on quarter. Greater China also improved with Taiwan turning and Hong Kong being a bit softer. And 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.

Luca de Meo: So F1, I think I know the top topic pretty well. I know the potential of this platform. We actually see it as a platform just more than a sponsorship. You have to 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 commercial presence so that we can link the event to our retail etcetera then and create a lot of initiatives. The contract was structured, I think, in a very innovative way where we it is not about just sticking you know you know, putting a sticker on a car. it is the whole complete image of the team. And we also control the merchandising. And based on that possibility, what we are 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 team. That means this is for us a way to engage a smart way into the sportswear category and everything that comes together, So I believe that there is a real opportunity to make business out of it. And I am convinced that with that business, we will probably even more than compensate the cost of the sponsorship. that is the target. This thing Gucci Racing team will start with Formula 1, but it is about an umbrella brand for any sport activities, whether it is tennis or other initiatives that which you will take? Okay? And 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? And I can guarantee you that what I have heard and seen in the press is higher than what we actually invest into the thing. And this important, but not fundamental part of the A&P budget of Gucci. I think we can do something really good. it is innovative. it is giving us the chance to touch global target. And to be on a platform that will create vividness to and presence of Gucci. In a interesting manner because we are on the track, so we compete There will be weekends where we win. There will be weekends where we lose. And that is also the part of the drama and part of the interest into, you know, in such kind of thing.

Jean-Marc Duplaix: 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, be, for sure, absolutely and deliver a high return. Thank you, Jean-Marc.

Operator: So we will now switch to Vittoria Petrova from Barclays. Vittoria, could you open your mic?

Vittoria Petrova: Thank you so much for giving me this opportunity and congrats congratulations on the result. I have two questions. First is on Gucci sales densities and like for like performance. I understood you commented that it is up Could you comment on sales densities in this context as well? And should we did I understand it correctly that you are likely to open more than 100 stores this year? My second question is from Correct, closing them, not opening. Closing, of course. And from a credit analyst, there is a question. If you with your obviously cash generation in place, you expect any gross debt reduction, any buyback? And just two clarifications for confirmation. When you talked about flattish quarter, is it group organic, Gucci organic, or Gucci retail organic growth? it is a reference to Luca's comment. And my final just confirmation, are you are you keeping your guidance of all brands being positive in 2026 or it is now a group guidance? Thank you so much.

Luca de Meo: Sales density, of course, we are doing the work to sell more. Sell more in full price, reducing the number of stores and the square meters. So of course, one of our targets is to increase the sales density So and we are seeing some positive signs here and there that this thing is happening.

Armelle Poulou: Do you have a second question on cash? On gross debt reduction. On gross debt, any plans to reduce gross debt and go through any buyback Yes. it is already it is a point. Marie-Claire D'Amico, you can answer to that. I mean, we had, of course, a significant reduction in H1 and H2. You should expect a further reduction coming from cash flow generation.

Luca de Meo: Yeah. And, yeah, for you asked about the flat the flattish Q3. I think it is probably I mean, again, this is what we see right now, but every day we fight to actually do better, but we see a kind of flattish Q3 for the group. Or as I said, it may be this thing is not going to be completely linear. But what matters is that at the end of the year, are where we have, you know, hoped and committed to. So that is that was the nature of my comment. And then you have another question is, I think you answered.

Jean-Marc Duplaix: Yeah. I went through it. Yeah. No, but you mentioned share buyback. I think we want to be very clear. We had reiterated on the capital allocation during the Capital Markets Day the priority is to invest in our brands, to continue the, you know, the deleveraging of the group, So at least for this year, there is no plan of share buyback.

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

Zuzanna Pusz: Thank you for taking my questions. Sorry, mine are a bit boring. Just the good questions are gone. So maybe first one, just on Then, not on Gucci, not on Gucci's, Maybe on another brand. That would be a follow on. So it does not as more than two or three. Maybe the first question just on inventory. So you have mentioned that you are still committed to the €1 billion reduction, but unless I am completely wrong. I mean, I look at inventories in H1 as a percentage of sales, they seem pretty similar versus last year. So I am just wondering if, you know, maybe there is something related to, I do not know, like store openings in jewelry. I mean, that kind of, you know, could be maybe inflating that number. Secondly, again, this is a boring one. I am sorry. But I think the when I look at the numbers, the corporate and other costs went up quite a bit. So I am just wondering, you know, is there any, I know, any kind of reallocation of cost that we should just take into account as we model going forward? And then that is actually not about Gucci, but it is another follow-up. On the Q3 being flattish, and as you said, that is what you are seeing right now, can I just check, was it retail for the group? Retail and wholesale? Because you are clearly doing so much better in Q2. So I am just wondering what could be driving that expectation for flattish in Q3. Maybe there is some wholesale timing or maybe you are just being cautious. These are my two questions and the follow-up. Thank you.

Armelle Poulou: Do you want to go for it. Regarding the inventory target, first, it is important to remind you that this is an inventory target for our fashion and leather goods brands. And it is from September 2025 to December 2026. So you cannot read it completely in the number, and we are confident in delivering this target. That was for the first question. So 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 need we want to be more efficient going forward in terms of the amount of net inventory to sales. And I think it is something we mentioned during the Capital Markets 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.

Zuzanna Pusz: This is the cost of corporate.

Armelle Poulou: Okay. Cost of corporate, yes, we had an increase that is due to the rental that we do not have anymore on the investment this investment that we did on real estate. If you correct it from that, it is roughly stable The corporate costs are roughly stable.

Zuzanna Pusz: So sorry, so to follow-up on this, so we should forecast it sort of as a percentage of sales as we look at H1. Is it kind of like a one-off? Just to understand how we should model that line going forward for the company, let's say.

Armelle Poulou: Yeah. No. On corporate, I mean, those rental expense, we will not have them either in So basically, what you see now is the cost of corporate going forward.

Zuzanna Pusz: We are Okay. Yeah. Alright. Thank you.

Armelle Poulou: Okay. I think there was a question about Q3 dynamic if I am correct.

Luca de Meo: Do you want to jump on? no one wants to answer it. Yeah. We are fighting to answer to you, Zuzanna. I am just No. I think no. You can you can answer. No problem. Go. No.

Jean-Marc Duplaix: I think, you know, as was mentioned by Antoine, there is a comp that is much more demanding. We also know that 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 at the end of August. In Q4, we will have much more product newness, because we will have the two collections, the one of Primavera, and the one of Gucci Cruise. And also, I mean, last point, you see the macro environment is still very volatile. So it is it is we are also careful in an environment that remains very volatile. Thank you very much. That was very helpful.

Operator: Thank you, Luca, Jean-Marc, Armelle, and thank you to all of you who joined 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.