Moncler’s First Quarter Tops Expectations
MILAN — Boosted by direct-to-consumer business and rising demand in China, Moncler Group reported better-than-expected first-quarter results on Thursday.
In the three months ended March 31, the group registered a 23 percent jump in revenues at current and constant exchange, amounting to 726.4 million euros versus 589.9 million euros in the first quarter of 2022.
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“The year has just begun, the geopolitical context remains uncertain and the most important months are still ahead of us, but we are ready to face them and to capture new exciting opportunities,” Moncler chief executive officer and chairman Remo Ruffini said in a statement after market close.
Sales at the Moncler brand amounted to 604.8 million euros, up 28 percent at current and constant exchange compared to 473.4 million euros in the first quarter of 2022. In a conference call, Luciano Santel, the group’s chief corporate and supply officer, said the Moncler brand’s April sales were performing in-line with the first quarter of 2023.
The performance was lifted by strong double-digit growth in its direct-to-consumer channel in Asia and the Europe, Middle East and Africa region. Overall, its d-to-c growth was up 34 percent at constant exchange to 501.5 million euros.
Revenues of the Stone Island brand, which the group consolidated in 2021, were up 5 percent to 121.6 million euros compared to 116.5 million euros, in the first quarter of 2022.
Ruffini said the company is “extremely satisfied” with the results posted in this first part of the year.
“Both our brands recorded strong double-digit growth in the d-to-c channel, reflecting their very solid momentum, a strong connection with consumers and the excellent execution of our strategy.” Ruffini said, touting the company’s Moncler Genius Olympia London takeover that welcomed more than 12,000 people.
“Moncler Genius has evolved from a universe of collaborations into a real platform for co-creation among different sectors, showcasing the cultural relevancy of the brand worldwide,” he claimed.
In Asia, sales of the Moncler brand in the first quarter rose to 304.4 million, up 32 percent, while sales in the Americas increased to 84.5 million euros, up 9 percent. In the Europe, Middle East and Africa region, revenues rose 29 percent to 215.9 million euros, boosted by strong direct-to-consumer demand and a revival of tourism from Americans and South Koreans.
In the first quarter of 2023, the direct-to-consumer channel for the Moncler brand reached revenues of 501.5 million euros, up 34 percent compared to the same period of 2022, driven by a strong performance in both physical and digital channels.
The wholesale channel was up 5 percent to 103.3 million euros.
As of March 31, there were 255 directly operated Moncler brand stores, an increase of four units compared to Dec. 31, including Dallas, London Heathrow and Seoul HD Mok-dong.
The Europe, Middle East and Africa region, which is the main market for Stone Island, grew by 4 percent to 87.8 million euros, representing 72.2 percent of total revenues, while Asia increased by 28 percent.
This growth in Asia was helped by organic growth and the impact of 16 wholesale to retail store conversions in Japan. “The performance of the Korean market was weaker than other Asian markets, also due to the impact of the ongoing changes in business model,” Moncler Group said.
Sales in the Americas were down 20 percent to 10.8 million euros.
At Stone Island, the direct-to-consumer channel was up 40 percent to 39 million euros contributing to 32.2 percent of the quarterly revenues.
However, the wholesale channel fell 7 percent to 82.5 million euros, accounting for 67.8 percent of the total.
As of March 31, the network of monobrand Stone Island stores totaled 71 directly operated stores, down one unit compared to Dec. 31 of last year.
Earlier Thursday, the group announced that former Gucci executive Robert Triefus had been appointed Stone Island’s new CEO. The company’s owner, Moncler Group and Sportswear Company SpA, which develops, produces and distributes the Stone Island brand said Triefus will take the role as Sportswear Company SpA CEO June 1.
Moncler acquired Sportswear Company SpA, owner of the Stone Island brand, in a deal valued at 1.15 billion euros in 2021.
Responding to an analyst’s question about margins, Santel reiterated the company’s goal of 30 percent EBIT margin for 2023. In 2022, full-year operating profit rose 28.4 percent to 774.5 million euros, with a margin on revenues of 29.8 percent.
“It’s important for us to keep investing in the brand and in the organization to make this company stronger and stronger, than to receive one or two points higher in operating margins,” Santel said.
A note sent by Barclays Equity Research following the call said the company focused on Stone Island, which reported weaker growth on the back of its ongoing wholesale conversion
“At this stage, we are not too concerned about the weaker trends at the brand as there is still a lot of cleaning up to do and considering the weaker brand momentum of Stone Island vs. Moncler, we wouldn’t be surprised to see the brand being a bit less resilient in markets such as the U.S. and Korea, which are currently slowing down,” Barclays said.
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