Earnings call transcript: Lanvin Group’s Q2 2025 results highlight challenges

Lanvin Group Holdings Ltd reported its second-quarter 2025 earnings, revealing a challenging period marked by declining revenues and a significant drop in gross profit margin. According to InvestingPro data, the company’s revenue decline reached 22.89% over the last twelve months, while maintaining a robust gross profit margin of 55.62%. Despite these hurdles, the company remains optimistic about future growth, driven by new creative leadership and strategic brand enhancements. The stock showed a modest premarket increase, reflecting cautious investor sentiment.

Key Takeaways

• Revenue fell 22% year-on-year to €133 million.
• Gross profit margin declined by 400 basis points to 54%.
• Adjusted EBITDA was negative €52 million.
• The luxury market slowdown impacted regional performances, particularly in EMEA and Greater China.

Company Performance

Lanvin Group faced a tough second quarter with a 22% decline in total revenue to €133 million compared to the same period last year. The company attributed this downturn to soft market conditions and creative transitions within its brands. Despite these challenges, Lanvin Group is focusing on repositioning its brands and optimizing its operations to navigate the current market landscape.

Financial Highlights

• Revenue: €133 million, down 22% year-on-year.
• Gross Profit Margin: 54%, a decline of 400 basis points.
• Adjusted EBITDA: Negative €52 million.
• Store Optimization: Streamlined 29 underperforming stores.

Market Reaction

Lanvin Group’s stock experienced a slight premarket increase of 0.43%, trading at $2.089. This movement reflects a cautious optimism among investors, despite the company’s recent financial struggles. The stock remains within its 52-week range, with a high of $2.69 and a low of $1.32, indicating room for potential recovery as market conditions improve.

Outlook & Guidance

Looking ahead, Lanvin Group is targeting growth through new creative leadership and strategic brand enhancements. The company is optimistic about the second half of 2025, expecting momentum from new collections. Long-term guidance includes an EPS forecast of -$1.38 for FY2025 and -$1.09 for FY2026, with revenue projections of $420.07 million and $466.74 million, respectively.

Executive Commentary

"The story of our first half is navigating a tough climate while preparing for a stronger future," said Andy Liu, Executive President. He emphasized the company’s long-term strategy and foundational work positioning Lanvin Group to capture demand as conditions improve. David Chan, CFO, added, "We will continue to implement our action plan to further reduce cost and improve margins."

Risks and Challenges

• Soft market conditions continue to impact revenue.
• Creative transitions may lead to short-term disruptions.
• Global luxury market slowdown, particularly in EMEA and Greater China.
• Inventory sell-through challenges could affect future profitability.

Lanvin Group remains committed to overcoming these challenges by focusing on cost efficiency and strategic brand repositioning. As the company navigates the current market environment, its emphasis on creative leadership and operational optimization will be crucial in driving future growth.

Full transcript - Lanvin Group Holdings Ltd (LANV) Q2 2025:

Conference Moderator: Thank you for joining us, and welcome to the Lon Lon Group’s twenty twenty five First Half Financial Results Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Now please take a moment to review the disclaimers.

During this presentation, the company will be making certain forward looking statements, including, but not limited to, future performance and industry outlook. Forward looking statements are inherently subject to risks, uncertainties and other factors, and they are not guarantees of performance. For today’s presentation, I would like to introduce Andy Liu, the Executive President of Lon Lon Lon Group and David Chan, Executive President and CFO of Lon Lon Group. With that, I’d like to turn it over to Andy Liu to start the presentation.

Andy Liu, Executive President, Lon Lon Group: Thank you, and welcome, everyone. I’m Andy Liu, the Executive President of Lanban Group. The story of our first half is navigating a tough climate while preparing for a stronger future. We operated against the backdrop of persistent global macroeconomic and geopolitical uncertainty. Performance at some of our brands was tempered by creative transitions as the markets awaited new collections and by overall sector softness.

Despite these challenges, I’m proud to highlight that St. John demonstrated remarkable resilience growing its core North American market despite the volatility. Most importantly, our strong cost discipline and accelerated retail footprint optimization began to deliver visible improvements in the second quarter, a positive trend we are focused on continuing. Our strategy is built for the long term, and we are confident that the foundational work we completed in the H1, particularly with our new creative leadership positions us to capture demand as conditions improve. Turning to Page five.

Let’s review the brand level achievements in the first half that are shaping our future. At Lanvin, Peter Kopin made his much anticipated return to Paris Fashion Week this January, earning strong global acclaim for his debut collection, which celebrated the house’s timeless French elegance. At Woolford, the brand reinforced its essentials positioning with the In Your Own Skin campaign, further defining its identity around modern essentials that balance refined design with enduring relevance. Separately, Wolford also completed a capital increase in H1 to provide additional support for its strategic transformation. For Sergio Rossi, the first half was about anticipation.

The brand unveiled Paul Andrews’ first collection, massively emerging tradition with modern innovation, a collection we expect to drive fresh commercial traction in the second half. St. John successfully revived its most iconic archival designs and collaborated with golf brand Malvin on a Sport Luxe capsule, blending classic knitwear with modern aesthetics. And finally, Caruso added new first tier Mason accounts while maintaining strong relationships with existing clients, and it generated excellent press coverage at 50 Uomo. Our priorities for the remainder of the year are clear and action oriented, as outlined on Page six.

First, we have strengthened brand leadership to ensure disciplined execution. At the brand level, teams that have been reinforced with several key appointments, including a new Deputy CEO at Wolford. At St. John, we promoted internal talents through the roles of Chief Commercial Officer and Chief Operating Officer, alongside deployment of a new Chief Merchandising Officer. These promotions not only recognize the strong capabilities within the organization, but also underscore ability to expand responsibilities from within while positioning the brand for its next phase of growth.

Second, we continue to drive efficiency by streamlining operations and optimizing our retail footprint. In the first half, we rightsized 29 underperforming stores and will continue a comprehensive review of our network while further evaluating brand image and retail productivity. Third, we remain focused on protecting free cash flow through disciplined working capital, management and rigorous cost control. And finally, we’re deploying targeted marketing initiatives to boost traffic and conversion with the launch of the highly anticipated collections from both Lawn MON and Sergio Rossi in the 2025, expected to inject renewed growth momentum across the group. With that, I’ll hand it over to David to take you through our financial and brand level performance.

David Chan, Executive President and CFO, Lon Lon Group: Thank you, Andy. I’m David Chan, Executive President and CFO of Longmont Group. I’ll be walking you through our first half financial at group and brand level. Page seven provides a snapshot of group’s financial performance. Our revenue in the first half was €133,000,000 down 22 year on year, reflecting softer market conditions and a planned creative transitions.

Gross profit margin declined by 400 basis points to 54%, primarily due to sell through of prior season inventory. Contribution profit margin and adjusted EBITDA margin decreased by 714%, respectively, as lower revenue impacted operation leverage. However, these effects were partially mitigated by cost actions. Importantly, these measures preserve flexibility and position us to capture momentum in the second half of this year. Page eight highlights the sequential improvement we saw in the second quarter, which supports our confidence for the back half of the year.

Most brands show encouraging signs of recovery in second quarter. Longmont and Surgeon Rossi’s D2C revenue grew by 4616% quarter over quarter, respectively. Wolfer’s gross profit margin expanded by sixteen seventy three basis points and Caruso saw revenue growth of 11%. These results demonstrate that our operational initiatives are gaining traction, while St. John maintain steady performance throughout the entire first half.

The revenue bridge on Page nine shows the evolution of our top line from 2021. The ongoing macro industry wide challenges were the leading driver of the revenue decline in first half twenty twenty five. In the context of a broader luxury market slowdown and creative transition, the group has made proactive decision to advance its strategic repositioning across geography and product assortment. Last year’s logistic issues also had a residual effect on Wolfer’s performance, but the business is now in recovery. Looking ahead, the additions of new creative talent at Lanvin and Sergio Rossi will be the key driver for the growth in the second half.

Page 10 breaks down our revenue by geography and channel. From a regional perspective, all key regions saw declines, with EMEA and Greater China facing the most significant headwinds, while APAC resulted also reflected our planned strategic repositioning. By channel, D2C and wholesale were down. Specifically, we saw major softness in wholesale for EMEA and cautious consumer sentiment in Greater China. On Page 11, we delve into our margin performance.

The 400 basis point reduction in gross profit margin was driven by several factors. Sell through of prior season inventory will create a transition, underutilization of production capacity and product mix changes. Contribution profit was pressured by lower revenues.

Andy Liu, Executive President, Lon Lon Group: Though

David Chan, Executive President and CFO, Lon Lon Group: we took measures to reallocate marketing investment towards high return initiatives, critically, all brands aggressively pushed G and A cost reduction measures to offset marketing weakness. The decline in adjusted EBITDA to negative €52,000,000 was a result of this negative operational leverage, though our cost discipline help prevent a larger drop. Page twelve and thirteen detail our successful efforts in rightsizing our operational expenses. Since first half twenty twenty three, we have made significant strides in reducing G and A expenses across the board. As you can see on Page 13, Wolfer reduced brand level G and A by 27%, Sartorossi by 25% and St.

John by 35%. This disciplined approach to managing our cost base is fundamental to navigating the current environment, improving our path to profitability. At Lanvin, G and A expenses were $17,000,000 in first half twenty twenty five, up from $14,000,000 in first half twenty twenty four, but still 15% lower than first half twenty twenty three. The year on year increase primarily reflects investment development, specifically research and sample costs related to Peter Coffin’s debut collection. These are strategic investment aimed at positioning Lanvin for long term growth.

Excluding these planned spend, Lanvin’s underlying cost base are also reflects improved efficiency. Our retail optimization strategy is nearing completion. As shown on Page 14, we are ongoingly upgrading our store network to discipline new openings in flagship locations and rationalization of underperforming stores. In the first half, we streamlined 29 stores, creating a more focused and productive footprint. This sharper portfolio not only significantly improves the efficiency of our operations, but also position us for stronger brand equity and sustainable value creation.

Looking ahead, as I’ll outline as we outline on Page 15, our focus remains on driving cost efficiencies, marketing optimization and brand enhancement. We will continue to implement our action plan to further reduce cost and improve margins. Our approach to marketing and footprint review will be highly tactical, focusing squarely on ROI. And finally, we’ll build the brand story and desirability along with the new creative leaders, which we believe will be powerful catalyst for growth. I will now move on to the brand results for the 2025.

Lanvin’s revenue in the first half declined by 42%, primarily due to weak wholesale demand in EMEA, where clients adopted a wait and see approach ahead of Kupita Koping’s debut collection. Despite this, EMEA retail remained highly resilient. And in the second quarter, the successful launch of our marketplace model drove a 46% increase in DTC revenue and supported notable rebound in North America e commerce. Gross margin also improved sequentially from 52% in the first quarter to 57% in second quarter, reflecting stronger retail dynamics and early benefits of our optimization efforts. For the half year as a whole, gross margin decreased by three sixty six basis points year on year, primarily due to product mix changes and our ongoing retail network optimization.

While the revenue decline pressured contribution profit, diligent cost saving initiatives cushioned impact, and we continue to invest in Peter’s vision, which is integral to our long term strategy. Looking to the second half, our initiatives are focused on a powerful launch of Peter Koping. We will execute a global integrated marketing campaign for the debut collection, amplify reach through targeted social media and e commerce activations and drive in store traffic with refreshed visual merchandising and clienteling events. We’ll maintain cost discipline. We’ll be investing in savings into product innovation, flagship location and strategic digital partnerships.

Moving to Wolfer’s on Page 18. Revenue was down 23%, reflecting the residual impact from last year’s third party logistics transition. However, within this figure, there’s a very positive story. The wholesale channel demonstrated strong growth of 14% in the period, driven by our strategic emphasis on partnership. The D2C decrease of 35% is a result of our active rightsizing of our retail network.

Gross margin for the half year decreased due to the under absorption of fixed cost production cost during the recovery phase and a planned liquidation of excess stock to improve inventory health. Encouragingly, the second quarter showed strong progress with gross margin improving from 49% in the first quarter to 65% as inventory clearance was completed and production efficiency strengthened to higher capacity utilization. Another key achievement was an 18% reduction in G and A expenses, underscoring commitment to operational discipline. Looking ahead to second half, Wolfram will celebrate seventy fifth anniversary with a dedicated brand push that builds on essential focus. The campaign will spotlight iconic products at a core of its brand DNA while further optimizing the assortment.

We will also continue to explore expansion opportunities in emerging market, particularly in Middle East and APAC, building on momentum from the recovery. On Page 19, we look at Surgeon and Rossi. Revenue fell 25% as customers held off on purchases in anticipation of Paul Andrews first collection,

Andy Liu, Executive President, Lon Lon Group: which is set to hit

David Chan, Executive President and CFO, Lon Lon Group: the market in second half. We were encouraged, however, by a strong quarter over quarter rebound in Q2. The retail sale was up 17% and e commerce was up 10%. Gross margin decreased by nine percentage points due to markdowns related to product mix changes and underutilization of production capacity. The second half will be the transformative period for Sergio Rossi.

The focus will be on leveraging Paul Andrews new collection to reintegrate the brand. We plan to expand the wholesale channel by proactively seeking new partners, continue driving cost control to improve operational efficiencies and reinforce our presence in core regions while making a targeted push into The U. S. Market. Turning to Page 20 for St.

John. The brand demonstrated exceptional resilience, with revenue remaining nearly flat in volatile environment. Its core North American market, which accounts for 98% of revenue, grew by 4%. The wholesale channel rose 11%, reflecting successful strategic key account partnerships, notably with Nordstrom. The brand maintained a stellar gross margin of 69%, supported by consistent full price sell through contribution profit margin was also steady decreasing by only 38 basis points.

For the remainder of the year, Xinjiang will continue to refine its key channels to improve conversions and boost sales. We will stimulate the e commerce channel with newly onboarded talent, creating more seamless product mix to enhance design and merchandising processes and optimize the supplier mix to mitigate geopolitical risk and improve cost efficiency. Finally, let’s review on Page 21. Revenue declined by 11% primarily due to a slowdown into Maisons business, which is undergoing a broader reset phase in the luxury market. Importantly, the proprietary Caruso brand show continued growth in order intake.

Gross profit margin remained resilient and 29% and contribution profit saw only a slight decrease amid the market headwinds. In the second half, Caruso will support the relaunch of Selection, the triple Amazon lines through collaboration with their new creative directors. The brand will also focus on acquiring new wholesale accounts in expanding markets like USA, Benelux and DOC, and we’ll continue to optimize its cost structure to improve operational efficiency. At this point, I’d like to have Andy provide some final remarks.

Andy Liu, Executive President, Lon Lon Group: Great. Thank you, David. The 2025 continued to present significant headwinds for the global luxury sector. Despite these persistent challenges, our focus remained unwavering. We maintained strict cost discipline, advanced our strategic creative transitions and lay the groundwork for future growth.

While top line results reflect the difficult market environment, we are encouraged by the clear signs of recovery we saw in the second quarter across several of our brands. Our brands are taking decisive actions tailored to their unique market positions, and we’re confident in their plans for the second half and going forward. Thank you again for your time and support. We will now open the line for questions.

Conference Moderator: We will now begin the question and answer session. There appear to be no questions at this time. And this concludes our question and answer session, which also concludes the conference call. Thank you for attending today’s presentation. You may now disconnect.

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