KERING (UP, TP EUR140): Our below consenus EPS estimates mainly reflects our cautious stance on Gucci. We see downside risk to the shares ahead of 2Q results due on 27 July. We see risk to consensus expectations of flat organic sales at Gucci as we model a 4% decline in 2015e. We think the market is too optimistic on a 2H growth recovery given the short-term headwinds of simplifying the breadth of the product lines, launching lowerprice products, rationalising wholesale and its store base. We believe Gucci will find it difficult to avoid cost deleverage as it has very few levers to pull to control costs. Rental cost inflation is still running high in the industry and Gucci cannot cut its marketing budget in the midst of a repositioning strategy. Puma should also face some margin pressure from its dollar sourcing from 4Q15, which does not seem to be discounted into market expectations.