Welcome to the Kering 2026 Q1 revenue conference call and audiocast. Please be advised that today's conference is being recorded. As a reminder, all participants are in a listen-only mode. At this time, I would like to turn the conference over to Armelle Poulou, Group Chief Financial Officer. Please go ahead, madam. Thank you. Good evening to all of you. Welcome to Kering 2026 Q1 revenue call. We are speaking to you today from Gucci headquarters in Florence, just two days ahead of our Capital Markets Day. I will be reviewing our performance and will be joined by Philippine de Schonen, Head of IR, for the Q&A session. Starting on slide five, we introduce our new segment reporting, which was announced on March 16 and reflects the Group's strategic priorities. We are now organized around four segments, Kering Fashion & Leather Goods, including Gucci, Saint Laurent, Bottega Veneta, Balenciaga, McQueen, and Brioni, Kering Jewelry, bringing together Boucheron, Pomellato, Dodo, and Qeelin, Kering Eyewear as a standalone segment, and Corporate and Other, which includes Group services and Ginori 1735. Gucci is obviously part of Kering Fashion & Leather Goods, but its performance will also be disclosed separately given its weight in the group's revenue and our commitment to a high level of transparency in the context of the transformations currently underway. On slide six, group revenue in the quarter came close to EUR 3.6 billion, down 6% as reported, impacted by the strengthening of the euro, and stable year-on-year on a comparable basis. This stabilization represents an important first milestone and a further sequential improvement. It was delivered in a challenging and uncertain environment with low visibility and continued pressure on consumer confidence. Geopolitical tensions, notably in the Middle East, also weighed on traffic and performance during the quarter, a point I will come back to. Regional trends remained uneven. Western Europe continued to face headwinds, while North America delivered an excellent quarter with growth across all brands, clearly standing out as the Group's strongest region. Q1 also demonstrated continued progress in terms of ambition and balance sheet strengthening. We executed several major strategic moves across jewelry, beauty, and real estate, clearly sharpening the Group's focus by significantly enhancing our financial flexibility. In jewelry, we announced the creation of Kering Jewelry and finalized our initial 20% stake in Raselli Franco, one of the largest independent luxury jewelry manufacturers in Europe. This marks a major step in building a sizable industrial platform to support long-term growth in jewelry with a clear pathway to full ownership. In beauty, we completed our strategic partnership with L'Oréal with the disposal of Kering Beauté for EUR 4 billion in cash and continued cooperation through a joint venture to explore opportunities in longevity and wellness. In real estate, consistent with our commitments, we completed a new refinancing transaction for our Via Monte Napoleone asset in Milan, following similar partnerships in Paris and New York, enhancing balance sheet flexibility while securing strategic locations for our houses. In parallel, we continue to optimize our distribution network and set the vigilance on both CapEx and OpEx, while never compromising the actions required to preserve and strengthen the brand equity of our houses. Moving on to our quarterly revenue in more detail on slide seven. As you can see, performance remains uneven across segments, although sequential trends are positive across the board. Kering Fashion & Leather Goods declined by 3% on a comparable basis, representing a sequential improvement of two points versus Q4. Within the segment, Gucci was down 8%, also showing a sequential improvement as the house continues to make progress in its turnaround. Kering Jewelry delivered another very strong quarter, up 22% on a comparable basis, clearly standing out as a growth engine for the Group. Performance was supported by strong brand momentum and solid execution across regions. Kering Eyewear grew by 7% on a comparable basis, once again confirming the strength, consistency, and resilience of this business, driven by the breadth of the portfolio and continued operational execution. Finally, Corporate and Other was up 10% on a comparable basis over the Q1, notably driven by the very strong performance of Ginori 1735. Overall, our geographic mix remains well-balanced, with only modest shifts during the quarter. Asia Pacific and Rest of the World were down one point, while North America and Western Europe each gained one point. On slide eight, let's review the top line by channel and region. Retail, accounting for 71% of revenue, was down 2% on a comparable basis. Within retail, e-commerce grew 6% year-on-year and represented 12% of retail sales. Western Europe declined by 7% comparable in the quarter. Trends remain challenging, particularly due to softer tourist flows, notably from Asia and Middle East. North America delivered a very strong quarter, up 9% comparable, clearly standing out as the best performing region, driven by a favorable mix skewed toward the high-end, with positive contribution from all brands, including Gucci. Japan declined by 3% comparable, a marked improvement versus previous quarters. Performance continued to be driven by the jewelry houses. Tourist spending remained negative, reflecting a less attractive pricing gap, while demand from local clients turned positive. Asia Pacific declined 4% comparable, an improvement of two points compared with Q4, after five points between Q3 and Q4. Strong performances in South Korea, Hong Kong, and to a lesser extent, Taiwan, were not sufficient to offset the decline in mainland China. As in Q4, the Chinese cluster ended the period down in the mid-teens. Finally, rest of the world declined by 8% on a comparable basis, mainly reflecting a deterioration in performance in the Middle East since the beginning of the conflict in the region. Our retail network, comprising 1,672 stores, showed a net decrease of 47 units compared with year-end. Over the period, Gucci store count declined by 11 net units. In line with the commitments set out at our 2025 full year results, we affirm our objective to achieve at least 100 net store closures by the end of December. Wholesale and other revenue, accounting for 29% of the total, was up 6% comparable in the quarter, with a continuing good momentum in eyewear. Let's now move to Kering Fashion & Leather Goods on slide nine. Revenues stood at EUR 2.9 billion, down 9% reported and 3% comparable. The retail channel showed a similar trend, declining by 4% on a comparable basis. You will find the usual details by region in the appendix of the presentation. Before turning specifically to Gucci, let me first say a few words about the other brands within the segment. Saint Laurent, Bottega Veneta, Balenciaga, and Brioni delivered year-on-year growth in the quarter, notably led by North America. At Saint Laurent, results reflected a very strong performance in shoes and ready-to-wear, combined with a successful rollout of new products, including the Mombasa handbag. Bottega Veneta showed solid trends in Asia Pacific, underpinned by a robust product pipeline and sustained brand desirability, with good traction in the full-price network and an increase in average unit retail on handbags. Balenciaga delivered another quarter of growth supported by sustained demand in leather goods, building on the success of the City and Rodeo lines. Brioni confirm a very positive momentum over the period, with particularly strong growth in bespoke. As expected, McQueen continued its rationalization in line with the actions undertaken to reset the brand. Wholesale and Other was up 2%, with royalties and other revenue increased by 6%. Focusing on Gucci now on slide 10. The house recorded sales of EUR 1.3 billion in the Q1, down 14% as reported, and 8% on a comparable basis year-on-year. North America delivered a solid performance, up 7% year-on-year, driven by strong newness and increasing AUR, providing early confirmation that the strategic reset is starting to gain traction. This momentum, however, was not sufficient to offset weaker trends in Asia Pacific and Western Europe during the quarter. Beyond the short term, the quarter was firmly execution-driven, marked by decisive actions across product, distribution, and client engagement. We have refocused product architecture, strengthened category priorities, and are progressively rolling out new collections in stores. The introduction of See Now, Buy Now initiatives, even though it applies to a limited number of products, is designed to improve responsiveness, sharpen newness, and better align product drops with client demand. Looking ahead, upcoming milestones are meaningful. Our Capital Markets Day will provide greater visibility on the Gucci roadmap, while the cruise show in New York next month will be another key moment to showcase the brand's renewed creative energy and product direction. While the recovery will be gradual, the fundamentals are being rebuilt in the right order. With disciplined execution, clearer creative leadership, and a sharper focus on core clients and products, we are confident in Gucci's ability to progressively restore momentum and create long-term value. On slide 11, Kering Jewelry delivered an outstanding performance, reaching a record level. Sales were up 14% as reported, and 22% on a comparable basis. In the directly operated retail network, sales grew by 28%, while wholesale revenue increased by 14%. Performance was broad-based across key regions, with standout demand in Japan and Asia-Pacific, notably in South Korea. Brand momentum at Boucheron was positive this quarter, with the house delivering the highest growth within the group, supported by robust performance across its main markets. Pomellato also posted solid growth, supported by strong traction in Japan and thanks to the Nudo, Iconica, and Together collections. Dodo extended several quarters of sustained growth, while Qeelin recorded a strong performance driven by Asia. Beyond the quarter, Kering Jewelry continues to confirm its role as a structural growth engine for the Group. The category benefits from strong underlying fundamentals and from the disciplined way we are scaling it across Houses and regions. With strong brand desirability, a growing retail footprint, and an increasingly integrated industrial backbone, we are confident in jewelry's ability to increase its contribution to Group revenue over time. On slide 12, revenue of Kering Eyewear Division. Kering Eyewear delivered a landmark performance, marking the strongest quarter in its history. Sales amounted to EUR 489 million, up 3% as reported and 7% on a comparable basis, reflecting very strong demand across the portfolio. This performance once again highlights the strength, resilience, and scalability of the eyewear platform. Growth was supported by a combination of high-profile product launches, including the first Valentino eyewear collection developed by Kering Eyewear, strong sell-out momentum, and successful commercial execution around major industry trade events. Marketing and communication initiatives across brands also played an important role, reinforcing visibility and desirability while execution remained consistently strong across key markets. Beyond the quarter, eyewear continues to demonstrate the relevance of our integrated model, combining brand desirability, industrial expertise, and disciplined execution. With its diversified brand portfolio and recurring demand profile, Kering Eyewear remains a highly attractive and reliable growth engine for the group. On slide 13, I will make a few comments about the Corporate and Other segments. In the Q1, revenue from Corporate and Other amounted to EUR 30 million, down 7% as reported and up 10% on a comparable basis with the variance mainly explained by scope effects. Within the segment, Ginori 1735 delivered a very good quarter with double-digit growth, reflecting continued progress in brand development, positioning, and desirability. Before turning to our outlook, let me briefly address the situation in the Middle East. Since the end of February, the situation in the region has remained an area of heightened attention for the Group. Our priority is and remains the safety of our teams. To date, none of our employees has been directly affected. The region represents around 5% of our retail revenue, with approximately 1,100 employees and 79 stores. A crisis unit was immediately activated and continues to manage the situation in real time. While some areas experience temporary disruption, the retail network is fully operational today. In the Q1, retail revenue in the region declined by 11% after a positive start to the year. Beyond the local impact, the key consideration going forward relates to potential effects on global tourism flows and the broader macroeconomic environment, which we continue to monitor closely. Overall, we are operating in a still uncertain geopolitical and macroeconomic context. In this environment, our focus is on agility, discipline, and flawless execution. We are equipping each house with sharper, more sustainable brand strategies and the operational capabilities required to accelerate progress. As we move through 2026, our objective remains to return to growth and improve margins. We look forward to sharing more details on our strategy and roadmap at our Capital Markets Day on Thursday. With that, we are now ready to take your questions. Roberto? Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. If you wish to cancel your request, please press star one one again. Please ask your question as distinctly as possible and put all devices on mute apart from the phone you are using to ask your question. We will now go to the first question. One moment, please. Your first question today comes from the line of Thomas Chauvet from Citi. Please go ahead. Good evening, Armelle and Philippine. Thanks for taking my question. I have three, if I can. The first one on the performance of the various cohorts for Gucci in Q1 relative to Q4 for retail, Americans look pretty strong, but perhaps the Chinese, Europeans, Japanese, and of course Middle Easterners, and the Q2 comp is quite similar to Q1. Are you seeing a change in trend in March or April with the other cohorts outside, of course, the Middle Easterners? Secondly, you've talked about product newness and deliveries of first collection. If we take the three brands where you've had a new creative direction and a first collection delivered to store in Q1, so Gucci, Bottega, and Balenciaga, how would you rank them in terms of the strongest customer response you received on that inaugural collection? Finally, on your guidance that you will confirm, I know you'll talk at the CMD about the longer-term, perhaps, roadmap. If we think just about 2026, you reconfirmed it will be a year of constant FX sales growth and margin expansion for Gucci and the other key brands. How do you think about the phasing of that return to growth in light of the Q1 performance, the tougher comps in H2, and now the disruption to the Middle East and to global tourist flow, as you just alluded to? Thank you. Thank you, Thomas. It doesn't seem as three questions, but happy to answer. On the first one, what I can say on Gucci cohort by nationalities is that we saw improvement in most of the nationalities. If I start by the Americans, we saw a strong improvement of the American cohort in Q1 versus Q4, actually turning positive. In Europe, we also saw a very nice improvement with European cohort, still negative, but improving quite significantly from Q4. I would say we had also a nice improvement in, I would say other Asians, while Japan remain difficult for Japanese. I would say for the Chinese, the situation was sort of flat to Q4, still negative. Regarding your second question on current trading, you know we are only two weeks into the quarter. What I can say is that if I compare the beginning of the quarter and maybe the month of March, performance remains broadly in line with what we saw in Q1 at Group level. Of course, we need to see what's going to happen in the coming weeks. If I go to your third question regarding customer response on your new Creative Director, we are very happy with the response to our new Creative Director. If I start with Gucci, but maybe the main comment is to say that in those three brands where we have a new Creative Director, we see a good response to newness introduction. This is for us a very good sign. As you know, it's the beginning of the new products rolling out into stores. It will increase progressively along the year. Of course, we are looking forward to seeing the confirmation of that in the next quarters. The first signs are very encouraging. Okay. Now I think you asked me a question on the exit rate and the guidance. As you know, we posted a Q1 flat and March also was flat. Now, if we consider the impact of the Middle East crisis, and if we look at what would have been the performance without the Middle East crisis, March actually would have posted a 3% growth. This is encouraging. Now for the full year, as we've always said, we expect the improvement to be gradual and sequential along the year in a context that is extremely volatile. Thank you, Armelle. Thank you. Your next question today comes from the line of Edouard Aubin from Morgan Stanley. Please go ahead. Yeah. Good evening, Armelle and Philippine. Really looking forward to see you in Florence tomorrow. Three questions for me as well, mostly on Gucci. I'm sure you're going to elaborate more in greater detail tomorrow, Armelle, on that topic. In terms of the product rollout at Gucci, I think La Famiglia, which was hitting the shelf mostly in January, was relatively small in terms of the assortment, about 7%-8%, I assume. What should we see in terms of April? I think you have the so-called look book on generation Gucci, I don't know how you call it, hitting the shelf this month. To what extent is that going to be more material and then, Primavera in the Q3? That would be my first question in terms of the share of the assortment, which will be new and designed by them now. The second one is, I guess you should have by now good visibility on your wholesale expectation for Q2. I think you are up 2% at Gucci and 2% Fashion & Leather Goods, as you said in Q1. Do you expect more or less the same type of trajectory for Q2 for these two components? Lastly, you just talked about the divergence between China and the U.S. for Gucci. You gave us the performance by cohort. I think, obviously, most brands are doing better in the U.S. than in China, but Gucci is quite an extreme example in terms of the divergence. I guess maybe you're going to talk about it more tomorrow and Thursday in greater detail, but how do you explain the fact that you're lagging in China and what are you doing to get things to Gucci to trend better in that geography? Thank you. Thank you, Edouard. Let me answer on your first question. I think you very correctly mentioned the progressive rollout of new collections for La Famiglia, the look book, and Primavera. Maybe the share of La Famiglia product was a bit higher than the one you mentioned, higher in SKU, but even higher in sales, considering the good reaction to those new products. I would say, as a whole, we are also happy to see, of course, the traction on the new introduction with La Famiglia, the See Now, Buy Now of Primavera, and that will be confirmed with the full collection of Primavera over the summer. I would like to mention that we see a good resilience of our newness in the portfolio, which is something that is encouraging, both in terms of sales, but with also an AUR that is higher with the introduction of new products that are resonating better. At the same time, and I think that is also some very encouraging elements, if you remember, we had a very difficult performance, very negative of the carryover for many quarters. I would say that the Q1 where we see the carryover performance getting better, much better, partially because we have now in the carryover some of the introduction, like the Giglio or the GG Emblem of last year. We are very happy with the success of the reintroduction of the new Marmont. As you know, this product had been reintroduced with a better quality and a slightly improved design. Those three products are supporting the performance of the carryover. Your second question was on wholesale, if I remember correctly. Wholesale for Q2, it's a bit difficult to give you a correct number, but it could be in the same area that what we saw in Q1. Finally, you asked me a question on the situation and the performance of Gucci in China, and you are perfectly right that the performance of Gucci in China is quite different from what we can see in some of our peers. We've been always very clear on the fact that we have been suffering in China from the fact that the market was not very supportive, but also, from the fact that we have our own issues. We are actively working on that, fixing the issues with a dedicated plan for China. We are rebuilding the cultural relevance in China with sharper storytelling, stronger ambassadors, and region-specific activation, while, as you know, we are also working to improve and upgrade our store network in China. As you said, you will have more information during the Capital Markets Day. Okay, wonderful. Thank you. Thank you. We'll now take the next question. The next question comes from the line of Anne-Laure Bismuth from HSBC. Please go ahead. Yes. Good evening, Armelle and Philippine. I have two questions, please. The first one is about the split of the performance between volume, price, and mix in Q1 for the Fashion & Leather division. The second question is about the performance of Gucci in the U.S. that improved a lot in North America, sequentially accelerated to 8% in Q1. Was the performance broad-based across a product category or any product category doing better than the others? Also, is it a question of initiatives taken in the U.S., or marketing campaign resonating better with the U.S. consumer, leading to that strong performance in the U.S.? Thank you very much. Thank you, Anne-Laure. Let me answer to your first question. I would say that in Q1, we didn't take any actions on pure price increases. At the same time, we had some improvement in the AUR, as I was saying, especially thanks to the good performance of the newness that was introduced with a slightly higher average AUR. In terms of volume, as you know, traffic was still very soft. Basically we suffered on volume, and we gained on pricing through the mix. Regarding your second question on Gucci in the U.S., yes, we are very happy to see these positive trends. It has been improving for several quarters progressively, as the performance of Gucci in North America is supported by the performance of the handbags. You remember the very strong success of the Giglio, for instance, but also new introduction are resonating very well in the U.S. We have also positive trends in ready-to-wear and in shoes. I would say in terms of clientele, as it is the case for our other Maison, there is, in the U.S., probably a slightly better resilience of the high-end part of the clientele. Thank you very much. Thank you. Your next question today comes from the line of Chiara Battistini from JP Morgan. Please go ahead. Good evening. Thank you very much for taking my questions. A couple of follow-up questions on Gucci, please. The first question, actually following up on Edouard's point on the different performance between China and North America. Besides China, the other regions also remain in double-digit negative territory. I was wondering really, taking a broader picture on what is really differentiating your performance between North America and the rest of the world, if you could share more color. I guess indeed, we're going to hear more about that this week. Thinking about the broader world rather than just China, what you're feeling that needs to change outside of North America, or what are the learnings you're seeing from North America that you can apply everywhere else in the world? Second question on the space closures in Q1 at Gucci. I was wondering if you could help us with any impact from increased space closures on the Gucci performance in Q1 versus Q4, if there was an incremental negative impact there. Finally, maybe a question on jewelry and the very strong performance there and accelerating performance, I was wondering to what extent there's been price increases in the quarter that helped the acceleration. Besides pricing, if you're seeing any accelerating demand underlying, and what's driving that in your view? Thank you. Thank you, Chiara. On your first question, as you know, I think we are working on improving the situation at Gucci on many front. Probably it's the traction and the reaction to those action is starting better in the U.S., but we are confident it's going to happen across region with some time. You know that there is more work to do in China. We've been always very clear about that. I would say in general, we are working on the product architecture, on the product offer. You know that we have simplified the number of SKUs. We are making sure we have a sharper offer. We are making sure also we introduce newness. Of course, we are working on the communication as well, as we absolutely need to work on the traffic to our stores. Yes, it's going to take a bit more time in China. You know, in China that probably we've been hurt a bit more in terms of image, and it was the case in the U.S. We are attacking the issue one after the other. In terms of store closures, yes, at Gucci in Q1, we have closed net 11 stores. Yes, it has a small impact on the sales. As you know, we pay a lot of attention to recoup a majority of the sales by working on the clientele of the store that we are closing by making sure that we transfer some sales associates for the closed store to the next one. It's quite difficult to actually have a clear number on the impact net-net. Yes, we are continuing on our plan, and we are very confident that we are going to execute the store closure plan for Gucci and for the rest of the houses as we plan at the beginning of the year. Regarding your third question on jewelry, yes, you're right. In the context of the gold increase, we've passed some price increases, for example, at Boucheron in Q1. We know that in Japan and Korea, it certainly helps partially the performance in Q1, and it's important to note now that was not the only reason for the very good performance of jewelry in Q1. I think the category is quite resilient. We have brands that have a very clear positioning, a very good execution. Also maybe to note in Q1 for Boucheron, we introduced a new ring in the Quatre line, which is the Exquises, and it was very successful in every region. Thank you. We will now go to the next question. The question comes from the line of Antoine Belge from BNP Paribas. Please go ahead. Yes. Hi, it's Antoine Belge at BNP Paribas. Three questions. The first one being more like a clarification on the wording. I think you confirm you want to return to growth. I think you had said earlier that all brands would be positive in terms of organic growth in 2026. Is it confirmed for all brands, notably Gucci, after the rather soft start to the year? Does it mean that you want to be back to positive sometime in 2026? My second question relates to the consensus for group operating profits that you disclosed recently, about EUR 1.9 billion. I think last year is a bit more than EUR 1.6, or EUR 1.9 is like almost 20% year-on-year increase. Can you confirm that the gross margin guidance is still for around flattish and also OpEx flat? Which would mean that EBIT margin improvement would come from the top line. Point number three is actually on OpEx. On the assumption that OpEx flat is still the guidance, can you maybe, one, comment a bit on the moving part? Are there some savings that will be found and reinvested especially? I mean, we heard about new platforms have been put in place. Also looking at the Middle East, are you taking some special action or are you waiting a bit to know a bit more how the conflicts will evolve before really changing OpEx and CapEx commitment? Thank you. Thank you, Antoine. On your first question, I'm not going to comment specifically the consensus, but yes, this is the ambition to return to growth and to improve margins for all brands, excluding Alexander McQueen. Considering, and maybe to add some color on your question on OpEx, we have done a lot of work on efficiency and, considering the work that we are still doing, actually, I confirm that I think we can at least maintain our margin stable, even without growth. This is probably a slight improvement on what we're expecting on OpEx. Now, the reason for OpEx savings are always the same. We are making a lot of effort on efficiency, on the support function, on the efficiency in the company, in the group between the brand and the houses, on the procurement, on the transport cost, on many elements. At the same time, we are continuing to invest only behind our brands, in clienteling, in communication, and in store refurbishments, because it's true that we've been talking a lot about store closure. I want also to mention that we are upgrading the network by doing some refurbishment and relocation when we can relocate in a better location, especially in the mall in Asia. Regarding maybe gross margin, you know gross margin, how difficult it is to forecast ahead. For the moment, no reason to change what I said. Now, you know there are many moving pieces in the gross margin, but for the moment, we still keep the same forecast. Just one precision. The ambition is to go back to growth for each of our brands, excluding McQueen. sorry, I forgot. Okay, maybe just one follow-up, specifically on the impact of the store closures. What is the impact on EBIT margin, if there is one already this year? Yeah. Is that something that is a bit hurting a bit the sales, but has a positive impact on margin or not really? Yeah, any thoughts about that? Yes. As you imagine, we close underproductive stores. Actually, the impact on the EBIT margin is slightly positive. Thank you very much and see you soon. See you soon. Thank you. We will now take the next question. One moment, please. The question comes from the line of Luca Solca from Bernstein. Please go ahead. Yes. Hello, good evening. I was wondering whether you could help us understand what is working best at Gucci. When it comes to seeing the green shoots of the brand working, for example, in the U.S., is it the higher end? Is it the fashion? Is it the remaining streetwear components, or is it anything else that you start to see as a potential formula that you could export elsewhere? If we dig a bit deeper in the marketing mix and whether it's a product, it's an animation or anything else that you could potentially use as a template in other regions as well to produce a similar positive impact. On a different note, I was curious to hear a bit more about Balenciaga. This seems to be a major departure with the new Creative Director at the helm of this brand. I wonder what reports you have on this change, which is making Balenciaga very different from what it was before, and how this is being received in various regions. Maybe if you could also give us a little bit more granularity on what you think Gucci is missing in China. You were talking about Gucci having problems of its own and some of the brand equity being damaged. I was wondering if you could be a little bit more specific. Was it a matter of insufficient communication, inappropriate product execution, wrong locations, wrong social media involvement? Where do you think is the action point that you could potentially use to make the brand move forward in that region? Thank you very much. Thank you, Luca. On your first question, I would say if we look at the U.S. and North America, we have positive trends in handbags, but also in ready-to-wear and shoes. We see a slightly better response in the high-end, but that is, I think, across the board in the U.S. and not specific, at least within our group, not specific to Gucci in particular. I would say that I think what is very important is the 360-degree approach that we are taking to both product communication, clienteling, and distribution to make sure that we align all the elements, not just counting on the new creativity, but making sure that from the product introduction up to the retail experience in-store up to the clienteling, also our communication. I think we managed this year to have a strong fashion moment during the fashion show, but also not to rely completely on that and have a lot of commercial activations in stores. Of course, the work done by Gucci is to align all those elements also probably with a very strong effort to have a very clear product architecture across categories to ensure that there is a coherent brand expression across the categories, across the price point, but with the offer that is relevant at different price points for different type of clients in the different categories. This is the work that you will see developing along the year with the new introduction. I think we're happy to see the traction on the new product, but we are also happy to see that the carryovers are much more resilient, that the introduction also of last year are continuing to be successful. I mentioned the new Marmont. I can also mention Emblem. Emblem in APAC is still ranking very well in our handbag sales, and that's good news because it's good to introduce successful newness, but we also need to have a strong portfolio of products over time. Regarding Balenciaga, sorry, maybe you asked for Balenciaga, but maybe I will go to Gucci in China to complement the first point. In China, what we consider is that we have to work to make sure that Gucci has a cultural relevance in China and a disciplined execution. We are working more and more to localize a bit the storytelling in a way that resonates with the Chinese consumer, having a stronger focus on some products aligned with local demand. We are working on distribution. We have over-distributed in China, so we want to upgrade our network with fewer store, but better store, with a higher level of client engagement. For that also, we continue to increase and better target our marketing investment. Maybe an example of that is La Famiglia. The only region where we did a sort of interpretation of the movie with some Chinese actors, we had a very strong response in China in terms of engagement on social media, discussion, and probably this was a very good initiative to connect with the worldwide event of the La Famiglia tiger movie, but also making sure it resonates with the Chinese in their country. This is really to find the right balance and making sure that we have a localized go-to-market strategy, and that's very important, I think, going forward. Of course, it has also some other implication. At Gucci, the level of collaboration between the headquarter and the region is even more important than in the past to make sure that we both push the global strategy of the brand, but also making sure that we take into account all the findings and all the important elements that the region can bring to the headquarter. Also an example of that, I think we are happy with Emblème. Emblème is still doing very well in APAC. Emblème is aligned with some smaller bags. We also introduced the Mini Giglio and the Small Giglio to make sure that we have products that are relevant for China, even if they are part of a worldwide line in terms of functionalities, in terms of size. Coming back to your question on Balenciaga. You know that Pierpaolo Piccioli brings a renewed direction to the brand. We think it's going to help us to strengthen the house identity without compromising its edge. You can see, if you've been into the store, that his impact is really already, you can see it especially on the ready-to-wear collection, especially with a clear silhouette, a stronger women's proposition. You know that Balenciaga was very much skewed towards men, especially in ready-to-wear. We think we have a lot of opportunity to develop the brand also in the women ready-to-wear. Apart from the new creativity of Pierpaolo, we are also happy to see the handbag developing very well at Balenciaga. You know the brand was quite unbalanced in terms of a category, and the handbags are developing very well, and again, I think that we can consider that Rodeo and City are really starting to become these same sort of icons. They are very successful in all the regions, which is very good news Thank you. We will now go to the next question. The next question comes from the line of Piral Dadhania from RBC. Please go ahead. Okay. Thank you. Good evening, everybody. My first question is on Kering Jewelry, which has obviously been the best performing vertical within the portfolio. Congratulations on that. Could you maybe just elaborate a little bit on the performance by brand? What are the specifics, if I could put it that way, in terms of where the momentum is coming from, is my first question. The second part to that is, I think there's a technical factor related to the Rest of World, which I think grew 176%, whilst the royalties declined by something like 50%-plus. Could you just help us understand what's happened there in terms of how the business is structured in the Rest of World? Secondly, just following on from Antoine's question, I was just wondering if you're able to help us understand or quantify the magnitude of the cost savings that you expect to deliver in 2026. The reason we ask is we're just trying to understand whether you'll be able to deliver the level of margin expansion that the market is anticipating despite negative organic revenue growth, particularly in H1. Thank you. Thank you, Piral. Let me come back to Kering Jewelry. That is true, we had a very good quarter. I can try to give you a bit more color, brand by brand. We had actually a very good and positive performance in all four brands of the portfolio, which is good news. Certainly, the performance was stronger in APAC, where those brands are actually very strong. Boucheron is strong in Japan, in Korea, and that has been one of the great development of the few last years in China. We just opened, actually, a very nice flagship in Shenzhen. Pomellato is also doing well, and Qeelin is doing well. I would say probably Europe was a bit more difficult. For the U.S., you know that we are underdeveloped at the moment in North America for jewelry. We have a plan to develop Boucheron. Actually, the results are according to the plan in North America, but we also know that it will take time, because we have to develop the awareness of the brand in the U.S. Of course, you will have more information on Jewelry during the Capital Markets Day, so I'm sure you will have a lot of more color on this new business segment for us. Regarding, I think your second question was on the performance of the rest of the world. This one was affected for sure by the event, the conflict in the Middle East. We had a performance that was low double-digit negative. It was actually concentrated on one month in the three, so you can make your own calculation and imagine what it was doing in March. Our stores were closed at the beginning. They are actually today operational, but in the Middle East, it's tourist flows that are suffering more than the locals. In terms of cost saving, you remember I said that in February, we were aiming to be OpEx flat this year, which means some effort, because to be OpEx flat while continuing to invest strongly behind the brand in terms of marketing, clienteling, product development, and so forth, it means that we are doing some efficiency on the not client-facing areas. We are working on that. Of course, we are trying to continue to go further. I'm not going to give you some numbers at this stage, but of course, it's a continuous effort. We are developing some programs to be more efficient. Here again, during the CMD, you will have more color on the organization of the group and the platform that we announced. Probably on the longer term, we expect that it will help us also be more efficient going forward in the coming years. Thank you. Look forward to the additional detail. Thanks. Thank you. Our next question today comes from the line of Oliver Chen from TD Cowen. Please go ahead. Hi, Armelle and Philippine. Thank you very much. Regarding Gucci, what are your thoughts or what's happening on conversion relative to traffic across U.S. versus China? Any thoughts on what you're seeing on that conversion versus traffic angle? Second, on Gucci, and you continue to work on elevation, how should we think about the marketing and communication plans? Specifically, any thoughts on what's fixed versus variable and what your plans are regarding what you're seeing in terms of that factor? Thirdly, on supply chain, what's ahead in terms of the intersection of speed and supply chain, and as well as any bits on how you're innovating with AI in that context to drive a responsive supply chain, given all the change we've been all seeing and brands in different stages. Thank you. Thank you, Oliver. Your first question on Gucci. Traffic is still soft for Gucci in many regions with some differences. Of course, it's more positive in North America than it is in APAC, especially in China. What we experienced in Q1 is an improvement in conversion, which for us is encouraging, because it means that all the effort that we are putting in the product, but also in the training of our sales associates, in their retail experience in store, is starting to bear fruit. Of course, it does not completely offset the softness of the traffic, but it's a very good sign to see conversion going up, and it's going up in all regions, including China. In terms of marketing and communication, I'm not sure I got completely well your question. Maybe just to say that we continue to invest strongly behind our brands. We're going to keep an A&P that will be 8%-9% of sales, and we are working on the ROI of our action, being more scientific, I would say, in terms of how we allocate the resources in communication and marketing to make sure that we get the best results on our investment. For that, here again, we have strengthened also the organization at Group level, and we are also working at Gucci to make sure that we allocate between the different pockets of communication with the best ROI, both in terms of media, but also in terms of regions, in terms of activations. This is really a very disciplined way to execute marketing and communication. Lastly, your question on supply chain speed. Speed and agility are very important. You know also that we have a strong objective to be more efficient in terms of inventory levels and supply chain and industrial production. As a Group, it's not the only one, but it's also a role that is very important in the efficiency of our Maison. Of course, we rely a lot on new technology in that direction. For that, you will have plenty of very interesting additional information at the CMD, so stay tuned. Okay, thank you. One follow-up on Gucci. You spoke to this. The handbag pricing matrix, are you comfortable with where it is now? What are your thoughts on the price ranges and the families and making sure that you both elevate but communicate value to the customer, the balance of doing both? Thank you. Yes. On the handbag, yes, I think if you look at the product architecture now, it's very clear. We really make sure that we have an offer at a different layer, in terms of price, but also in terms of functionality, in terms of client taste. In terms of price, we have now some newness and strong proposal at the different level of the pyramid. That's very important. It's important in terms of pricing. You know also that we are very aware of the importance for the customer of a good perception of the value for money. At the same time, we also increase the quality of the product. That's very important. It's a combination of pricing, but also quality and creativity and innovation in the product at every layer of the proposal. We really want to expand, because we think that Gucci is relevant both at the entry level, at the core, but also at the high-end. Okay, great. See you soon. Can't wait. Thank you. Thank you. Our next question today comes from the line of Charles-Louis Scotti from Kepler Cheuvreux. Please go ahead. Good evening. Thank you for taking my questions. I have three. The first one within the Fashion & Leather Goods division, other brands grew 2% like-for-like in Q1. You provided some qualitative comments on each brand. Could you please specify which ones outperformed this segment and which ones underperformed? My second question, I just want to make sure that I understood you correctly. Did you mention that the organic sales growth will have been around 3% in March at the group level, excluding the impact of the Middle East conflict? Is that excluding only the impact within the Middle East region itself, or does it also exclude the Middle Eastern customers spending abroad? Last question, you closed 47 stores in Q1, and your target is at least 100. With roughly half already achieved after Q1, were closures front-end loaded, or is the 100 target conservative in this environment, meaning you could go faster than initially planned on store closures? Thank you. Yes. Thank you. Regarding the other brands within the Fashion & Leather Goods segments, Saint Laurent, Bottega Veneta, and Balenciaga all posted a nice growth in Q1, and all sequentially improved versus Q4. If I can give you a bit more color, Bottega Veneta posted the strongest growth, and Balenciaga, the strongest sequential improvement. Regarding your second question, yes, I confirm that March would have posted a +3% growth without the Middle East impact. I'm talking about the Middle East itself, the region. For the short question, yes, we have closed the 47 net stores. We are on the plan, and we are delivering the plan with confidence. Thank you. Thank you. We will now take our final question for today. Our final question comes from the line of Zuzanna Pusz from UBS. Please go ahead. Thank you for taking my question. I had just one actually to follow up regarding the outlook, and sorry if we're so annoying following up on this, but it's quite important for us from a modeling perspective. Can I just clarify, when you refer to objective to restore growth in 2026 for every brand excluding Alexander McQueen, is it that restore growth for the full year or that the brands return to growth at some point during the year? Just because I don't think I got it. It's just a very quick one. Thank you. Thank you, Zuzanna. Yes, just to clarify, yes, our mission is to be back to growth for all brands except McQueen for the full year. Excellent. Thank you. Thank you. There are no further questions at this time. I will now hand the call back to Armelle Poulou for closing comments. Thank you very much for your interest and for your questions. I need to remind you that Philippine and our team are available to go over any point that requires more clarification. We are all very happy to see you in two days. Have a good evening, and thank you again. Thank you, ladies and gentlemen. Thank you for joining. The conference is now over. You may disconnect your telephones.