MILAN — Moncler Group has proven resilient in weathering the macroeconomic environment, but nine-months earnings results showed it is weathering the storm just the same. For the period ended Sept. 30, the group’s sales were 1.87 billion euros, up 3 percent year-over-year. And for the latest quarter, sales dipped 3 percent year-over-year to 635.5 million euros, lower than consensus estimates.
The falling yen, declining consumer confidence and reduced spending power were a few factors that slowed growth in key markets, the company said.
“Our industry is facing a period of continuous volatility, characterized by a more difficult global macroeconomic context, which has been impacting consumer confidence in several markets,” said chairman and chief executive officer Remo Ruffini.
Sales of the Moncler brand in the nine months rose 5 percent to 1.57 billion euros, but sales at Stone Island declined 6 percent to 292.4 million euros.
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In the third quarter, revenue for Moncler amounted to 532 million euros, down 3 percent, dragged down by wholesale revenue. This was also slightly below consensus expectations forecasting revenue of 541.1 million euros.
During a call with analysts on Tuesday evening at the end of trading, Luciano Santel, chief corporate and supply officer, and Elena Mariani, strategic planning and investor relations director, were asked about the ailing wholesale channel across the board.
“We keep implementing a distribution strategy that is focused more on the direct-to-consumer channel than on the wholesale channel. We keep selecting, we keep, let me say, enhancing the wholesale distribution, selecting only the best,” Santel said.
Bernstein’s Luca Solca told WWD that reducing wholesale business should pay off in the longer term.
“Reducing wholesale is a positive, as it reduces the risk of inventory overhang and discounts down the road. They should be commended for that,” Solca said following the call.
In Asia, which includes Asia-Pacific, Japan and Korea, Moncler’s nine-month revenue grew by 6 percent to 750.8 million euros, representing 47.7 percent of the total. In the third quarter, revenue in the region were down 2 percent at constant exchange, due to more challenging macroeconomic conditions affecting consumer confidence, as well as a normalization of tourist flows into Japan.
In the Europe, Middle East and Africa region, Moncler revenue grew 5 percent to 603.4 million euros, representing 38.4 percent of the total. In the third quarter, revenue decreased by 3 percent at constant exchange, again brought town by the wholesale channel and a deterioration of the DTC channel.
The Americas inched up 1 percent to 219.1 million euros, representing 13.9 percent of the total. In the third quarter, revenue was brought down 6 percent at constant exchange due to wholesale revenue.
In the first nine months of 2024, Moncler’s DTC channel recorded revenue of 1.26 billion euros, up 9 percent. Revenue in the third quarter of 2024 were flat at constant exchange rates, impacted by consumer confidence, the company said. The growth of the DTC channel in the third quarter was also affected by a deterioration in the performance of the direct online channel, across all regions.
The wholesale channel recorded revenue of 313.2 million euros in the nine months, a decline of 9 percent, compared with the same period last year. In the third quarter, revenue in this channel declined by 9 percent at constant exchange.
In the nine months, Stone Island recorded revenue of 204 million euros in the EMEA region, a decrease of 9 percent compared with the same period last year. Third-quarter sales fell 6 percent in the region at constant exchange rates. Its Americas sales plunged 25 percent to 20.5 million euros in the first nine months. Losses were offset by its Asia performance up 18 percent to 68.1 million euros. In the third quarter, revenue in the same region grew 17 percent at constant exchange mainly driven by a continued strong performance in Japan.
Stone Island has a network of 91 directly operated stores as of Sept. 30, up six from June with new units in Shanghai Taikoo Li Qiantan and Macau Galaxy stores in China. The Stone Island brand also operated 11 mono-brand wholesale stores, a net decrease of 2 units compared to 30 June 2024.
Santel said there is still a lot of potential for growth for Stone Island.
“There will be an equivalent number of projects of expansion and relocation. Of course, still under our policy, our strategy that has been since very, very selective. In terms of locations, new openings…we can generate good business and also we can enhance the image of the brand. Our retail footprint [for example] in North America is very light. So there are many opportunities and independently on the current business trend, I think that is good for the brand,” he said.
Stone Island’s wholesale channel was down 22 percent to 156.7 million euros in the first nine months of 2024, and 19 percent in the third quarter as the company continues to revamp its distribution strategy.
Stone Island’s direct channel grew by 26 percent to 135.7 million euros in the nine months.
Santel assuaged analysts concerns about the full year by confirming earnings before interest, taxes, depreciation and amortization margin consensus of 29 percent. “The operating margin target implied in consensus forecasts is challenging but not impossible,” he said.
Looking ahead, Solca commented that Moncler Group was weathering the second half of the year “better than most.” “What matters the most is 4Q, as a lot of revenue concentrates in this quarter. The comment from the company that consensus expectations are achievable seems encouraging,” he said.
Ruffini was enthusiastic about Moncler Group’s roster of emotion-evoking events and the firm’s prowess in creating a sense of community worldwide despite economic obstacles.
Earlier this month, the group unveiled its Moncler City of Genius spectacle in Shanghai with its latest roster of creative talents showcasing their codesigned collections in their respective booths at the China Ship Pavilion by the Huangpu River. The project included an installation by the much-celebrated Chinese calligraphy artist Xu Bing.
“As we head into the final part of the year with a number of exciting initiatives planned for both Moncler and Stone Island, we remain committed to our brand-first, long-term oriented strategy, which I believe will position us well to navigate these challenging times,” he said.
Last week Kering Group, which also owns brands including Saint Laurent, Bottega Veneta and Boucheron, reported revenue fell 15 percent in the third quarter, with losses led by Gucci which saw its organic sales decline 25 percent in the third quarter. Earlier this month, LVMH Moët Hennessy Louis Vuitton said revenue was down 4.4 percent year-over-year in the third quarter.
In September, LVMH purchased a 10 percent stake in Double R, the investment vehicle that is controlled by Ruffini and holds his 15.8 percent stake in Moncler. LVMH will get the right to appoint two members to the board of Double R and one member to the board of Moncler.
When asked by analysts what the company’s future holds with respect to LVMH’s modest involvement in the business, Santel said Moncler is still independent.
“We are proud and very happy talking about the potential business impact of this partnership.…Honestly, we don’t see any impact, but simply because the shareholder agreement and the transaction itself is not intended at all to impact the Moncler strategy. So Moncler is still totally independent,” the executive said.
Performance of luxury stocks has been closely tied to China’s economic stimulus measures designed to counter weakness in domestic demand amid a slumping property market and high youth unemployment.
The world’s second-largest economy will grow by 4.8 percent this year, down from the previous projection of 5 percent in July, the International Monetary Fund said in its latest “World Economic Outlook” report.
