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Moncler SpA reported its Q1 2025 earnings, showcasing a 1% growth in group revenues at constant foreign exchange rates, reaching €829 million. The Moncler brand itself experienced a 2% growth, while the Stone Island brand saw a decline of 5%. The company maintains impressive gross profit margins of 78.05% according to InvestingPro data, demonstrating strong pricing power. Despite mixed brand performance, the stock rose by 0.66% to close at €54.72, with the company’s market capitalization standing at $16.89 billion. This increase reflects investor confidence in Moncler’s strategic direction and brand strength.
Key Takeaways
- Moncler Group revenues grew by 1% at constant exchange rates.
- Direct-to-consumer sales increased, with Moncler up by 4% and Stone Island by 12%.
- The stock price increased by 0.66%, closing at €54.72.
- Geographic performance showed strong growth in Asia (+6%) but declines in EMEA (-1%) and Americas (-2%).
- The company maintains a strong focus on brand positioning and innovation.
Company Performance
Moncler demonstrated resilience in Q1 2025, with group revenues reaching €829 million, marking a 1% increase at constant FX rates. The Moncler brand witnessed a 2% growth, driven by strong direct-to-consumer sales, which rose by 4%. However, Stone Island’s performance lagged, with a 5% decline. The company’s ongoing investment in brand positioning and innovation, particularly through the Moncler Grenoble line, remains a key driver of growth.
Financial Highlights
- Revenue: €829 million, up 1% at constant FX.
- Moncler brand growth: +2%.
- Stone Island brand performance: -5%.
- Direct-to-consumer growth: Moncler +4%, Stone Island +12%.
Outlook & Guidance
Moncler projects a prudent approach for 2025, expecting mid-single-digit growth in its direct-to-consumer channel. The company is focused on maintaining flexibility in its supply chain, with a production adjustment capacity of around 10%. A higher marketing spend is anticipated in the first half of the year, underscoring its commitment to brand development.
Executive Commentary
Elena Mariani, Group Strategic Planning and Investor Relations Director, emphasized, "Our focus as a group is very clear: to continue executing our long-term brand-first strategy." Luciano Santo, Chief Corporate and Supply Officer, highlighted the company’s belief in the U.S. market potential, stating, "We strongly believe in the potential of The US as a country and as a market."
Risks and Challenges
- Economic uncertainty and potential U.S. tariffs could impact profitability.
- The Korean market’s softening and a flat Japanese market pose regional challenges.
- Wholesale channel optimization may lead to a decline in revenues as Moncler shifts focus from wholesale to direct-to-consumer sales.
Q&A
During the earnings call, analysts expressed concerns about U.S. tariffs and economic volatility. Moncler confirmed its commitment to the U.S. market, with plans to open a Fifth Avenue store in early 2026. Despite market fluctuations, the company remains steadfast in its investment plans, focusing on high-quality production in Romania and Italy.
Full transcript - Moncler SpA (MONC) Q1 2025:
Conference Operator, Chorus Call: Good evening. This is the Chorus Call conference operator. Welcome and thank you for joining the Moncler Group First Quarter twenty twenty five Interim Management Statement Conference Call. At this time, I would like to turn the conference over to Ms. Elena Mariani, Group Strategic Planning and Investor Relations Director.
Please go ahead, madam.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group: Thank you, operator, and thank you all for joining our call tonight. I will host this interim management statement call together with Luciano Santo, Chief Corporate and Supply Officer. I will start providing a brief overview of our results, and then Luciano and I will be happy to take your questions. Before starting, I need to remind you that this presentation may contain certain statements that are neither reported financial results nor other historical information. Any forward looking statements are based on group current expectations and projections about future events.
By their nature, forward looking statements are subject to risks, uncertainties and other factors that could cause results to differ even materially from those expressed in or implied by these statements, many of which are beyond the ability of the group to control or estimate. Let me also highlight that given the nature of our business, interim results can be influenced by seasonal effects and therefore cannot be taken as a proxy for full year trends or results. Finally, I remind you that the press has been invited to participate to this conference in a listen only mode. Okay. Before diving into the presentation, I’d like to take a moment to talk about the context in which we’re currently operating.
The macro and geopolitical landscape has remained highly volatile and increasingly unpredictable, a trend that has only intensified in recent weeks. In this environment, our focus as a group is very clear: to continue executing our long term brand first strategy across both Montclair and Stone Island, staying true to our commitment to creativity, innovation and customer centricity. At the same time, it is equally important to maintain very strong operational discipline and financial rigor. Flexibility and responsiveness have always been part of our DNA, and today, they are more essential than ever as we navigate this period of uncertainty. Now moving on to our Q1 results, I’m delighted to announce that as a group, we achieved revenues of €829,000,000 up 1% at constant FX, with Moncler at plus 2% and Stone Island at minus 5%.
Both brands registered solid growth in our core DTC channel, Moncler at plus 4%, Stone Island at plus 12%, despite an exceptionally demanding comparable base from Q1 last year. Now moving on to our Moncler brand’s remarks, let me say that there is no better way to start than commenting the extraordinary Moncler Grenoble experience we brought to life in March. This year, Montclair Grenoble landed in Courchevel, a powerful moment that took the brand’s core identity to new altitudes. Over the course of a full weekend, we immersed the Montclair Grenoble community, including ambassadors, celebrities or friends of the brand, in the world of Grenoble, a universe combining high performance with high style. It was an experience designed not just to showcase the collection, but to express the full dimension of the brand.
I’m sure you probably caught a glimpse of this on social media, but the highlight of the weekend was a spectacular show at the Courchevel Altiport, more than 2,000 meters above sea level, where we unveiled the FallWinter twenty twenty five collection in a truly unforgettable setting. The event has been instrumental in further authenticating this distinctive brand dimension in the performance luxury space. And just to share a few stats, the event had a very strong media impact, over €3,000,000,000 in potential reach globally, over €300,000,000 in global engagement, over 2,000 press articles and over 1,000 social press articles, making it the most impactful Moncler Grenoble event up until now. But it wasn’t just about Courchevel. Still talking about the three brand dimensions and Grenoble in particular, if you move to Page five, you can see that in Q1, we continued our all year round journey, launching our third springsummer Moncler Grenoble campaign, introducing a collection of lightweight layers designed to adapt to outdoor activities such as trekking or hiking.
Talking about Moncler Genius, following on from the lineup presented at the City of Genius event in Shanghai in October, in the quarter, we launched the collection in partnership with Fragment by Hiroshi Fujiwara. Hiroshi, who is a multi year genius friend and long time collaborator, reimagined functionality and technical expertise on everyday wardrobe pieces. Finally, when it comes to our main collection, I just wanted to flag in particular the strong brand the strong plan behind the launch of the men’s springsummer ’20 ’20 ’5 collection with a very powerful campaign featuring world renowned actor Pen Badgley, which has been extremely well received globally. And a new footwear capsule designed by the very talented Sally Hembree. Moving on to Stone Island’s key initiatives in Q1.
First, I would like to highlight the opening of the new Stone Island showroom in Milan, a key milestone in the brand’s journey, which is enabling Stone to better present collections and special projects to international audiences. On the distribution front, in January, we celebrated the opening of Sun Island’s relocated store on Rue Saint Honore in Paris, a very important brand statement spanning a total area of 200 square meters with a design fully aligned with our recently developed global retail concept. A store that, thanks to a higher visibility and a better positioning, has already been delivering much better results compared to the older store. In terms of marketing, Stone unveiled the next chapter of its community as a form of research project showcasing its SpringSummer twenty twenty five collection. This next group of community members featured in the campaign was led by Spike Lee, a longtime Stone Island enthusiast.
And then finally, in terms of product, I would like to highlight to do a revisiting of one of Stone’s corner store fabrics, Raso Gomato, which was first launched in 1984. In fact, we introduced the performance version of this fabric showcasing Stone Island’s continued strong focus on materials innovation, research and development. Now talking about numbers, we’re going to start with the Moncler brand on Page seven. We’re happy to say that in the first quarter of the year, the brand grew by 2% at constant currencies. And looking first at the performance by geography, Asia was up 6%, thanks to the positive growth that the brand continued to register in the Chinese Mainland despite, I have to say, an extremely demanding base of comparison and the ongoing shift of Chinese consumption abroad.
Japan accelerated compared to Q4, mainly supported by tourist spending, while Korea showed softer trends compared to the previous quarter. EMEA was down 1%, impacted by the negative performance of wholesale. The DTC channel held steady versus the strong Q1 last year, and both local and tourist consumption remained positive in the quarter. The online channel instead was soft and continued to penalize the DTC performance of the region. Q1 revenues in Americas were down 2%, mainly impacted by the negative trend in the wholesale channel, while the DTC channel held up year on year.
Looking at Moncler revenues by channel on page eight, we’re pleased to say that in Q1, the DTC channel recorded good growth, up 4% at constant currencies. This performance is especially noteworthy considering the market volatility we’ve been navigating since the start of the year, as well as the exceptionally high comparable base the brand was facing across all regions, which last year all grew at a double digit pace. Wholesale revenues instead were down 5%, in line with management expectations, mainly due to the ongoing efforts to upgrade the quality of our distribution through further network optimization. In fact, the share of wholesale revenues in the first quarter is now below the 15% mark versus a DTC share of almost 90%. Let me take this chance to reiterate that we expect this channel mix evolution to continue, and we therefore expect wholesale to remain negative through the course of the year and to end 2025 with wholesale revenues down approximately high single digit, not different from the performance registered in fiscal year twenty twenty four, exactly what we said during the last conference call.
Moving now to Sun Island on page nine. Revenues for the brand were down 5% at constant currencies, with a continued solid double digit growth in the DTC channel, partially offsetting the decline in the wholesale channel in its largest quarter of the year. Looking at trends by region, Asia grew 15% mainly driven by a strong performance of Japan and of the Chinese mainland. Korea improved compared to q four, although it underperformed the rest of the region. EMEA revenues were down 11%, as the positive performance, of the DTC channel was not enough to affect the decline in wholesale.
And finally, Americas saw a decline of 18% in the quarter, mainly due to the double digit negative performance in the wholesale channel. The DTC channel instead recorded positive growth and further improved compared to Q4. Looking more specifically at Sun Island trends by channel on page 10, the DTC channel continues to perform well and grew by a solid 12% in Q1, thanks to positive contribution from all regions, particularly Asia. Wholesale revenues instead were down 19%. This is a higher decline compared to our full year indication due to a different timing of deliveries in Q1 versus Q2 compared to the timing of last year.
In the second quarter, we will see a reversal of this. And so you can expect wholesale for Stoner to be positive in Q2. When looking at full year 2025, we reiterate the indication we gave upon full year results pointing to a wholesale channel for Stone that will continue to decline but to a lesser extent than what we saw in 2024. And remember that you can expect a more negative performance in the first half of the year compared to the second half of the year, something we already mentioned last time. Last but not least, let’s briefly look at our store network on page 11.
At the March, Moncler counted two eighty four directly operated stores, while Stone Island counted at 90. Over the course of Q1, Moncler saw one new store opening, Shanghai Grand Gateway, and three closures, including Shanghai The Real, which we closed given the opening of the Plaza sixty six flagship nearby, San Francisco Bloomingdale’s given the closure of the department store in the city and so in short Airport Terminal 2 as we will keep a store in Terminal 1. The Sun Island DOS network was unchanged in the quarter. And finally, as usual, on Page twelve and thirteen, we have two wonderful examples of recent store network initiatives. For Moncler, we have the opening of Shanghai Grand Gateway, which I’ve just mentioned.
And for Stone, we have the relocation of the Paris flagship, which I described earlier on in the Stone Q1 highlights. We reached the end of the presentation, so I will now hand it over to the operator for your questions. Operator, you can now open the Q and A session. Thank you.
Conference Operator, Chorus Call: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. The first question is from Edouard Auburn, Morgan Stanley. Please go ahead.
Edouard Auburn, Analyst, Morgan Stanley: Yes. Good evening, Elena and Luciano. So two questions for me. First of all, I think at the beginning of the year, you had in mind about DTC performance sales about flattish. So what kind of came in better than expected versus your initial expectation?
And related to that, if you maybe could comment by the trend by nationality, that would be helpful. So that’s question number one. And then question number two, Elena, in your prepared remarks, you mentioned the volatility, which has obviously increased quite dramatically in recent weeks. I know it’s very early days, and you don’t really like to comment about trading over the past three, four weeks. But to what extent this volatility around the world and in The U.
S. Is impacting some of the customers’ shopping patterns? That would be helpful. Thank you so much.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Yes, Edward, thank you for your questions. Actually, you’re right. Our expectations for the first quarter, considering the, let me say, amazing results of last year, we’re more cautious than what we made it. If I can first give you the shape of our business in the first quarter. The first quarter started very well in January.
January was good, honestly, also thanks to the different timing of the Chinese New Year. February, for the same reason, was softer and much much softer. But overall, I mean, the quarter was positive, and, honestly, we are very happy about about this result. Again, needless to remind you, but, I mean, last year, we reported 26% in the DTC channel growth rate. And the year before, you may not remember, but we reported 30%.
And so a two year in a row with a very strong double digit growth rate this year, 4% is something we are honestly very, very satisfied about. Talking about volatility of current weeks, I mean, of course, we are talking about a few weeks. Honestly, I don’t find anything special twilight. I don’t see any change particular change in our customer behavior. So even if out there, the situation is quite, let me say, turbulent, but in our business, I can’t tell you anything special I wanted to highlight that can be a sign, a meaningful sign for the future.
Of course, the future to come is something that we are, to some extent, a concern, but, of course, we maintain our focus on our business, on our brand. So business is. Thank you.
Edouard Auburn, Analyst, Morgan Stanley: Understood. Sorry. My first question, Luciano, again, so versus your expectation, which nationality kind of explained the beat? Is that the demand from Chinese were more resilient than expected? That would be the main explanation.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: No. No. You’re right. Sorry. I forgot to answer this question.
I mean, nationalities, I mean, China Chinese, sorry, but talking about the cluster, Americans and the Europeans were positive. Koreans, unfortunately, negative, and Japanese flat. And this was not much different from what we we saw and we reported in q four. With the only difference of Korea that, I mean, has the trend has deteriorated. Korea was more or less flat in Q4 and now in Q1 was negative.
But I mean, this is what we saw in the first quarter.
Edouard Auburn, Analyst, Morgan Stanley: Thank you.
Conference Operator, Chorus Call: The next question is from Thomas Chauvet, Chauvet, Citi. Please go ahead.
Thomas Chauvet, Analyst, Citi: Good evening, Luciano and Elena. A couple of questions, please. The first one on pricing. I trust that the springsummer twenty five prices are set. Have you been thinking already about the level of pricing now you might need to adjust for the autumn winter collection, particularly if tariffs of 10% or 20% are maintained for EU imports into into The US?
Secondly, on manufacturing and supply chain more broadly, is there any opportunity to manufacture any of your products in The US? I assume the answer is no. But I just wanted to check. And when you think, Luciano, of your global supply chain, are Hungary and Romania still the preferred location for manufacturing given the high level of expertise there, given the volume your partners can produce at a pretty good quality and cost? Thank you.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Thomas, thank you for your questions. About the first question, any pricing strategy consequent to the international tariffs, not in spring, not in summer because, I mean, the recent collection has already been shipped out to The US. And so no impact in this season for for winter. Nothing we have decided yet, honestly, because of the situation, as you know, is still very, very, let me say, unclear. And so for for winter, it will totally depend on whether or not the current administration, your certification confirm will confirm or not the 20% for Europe.
In any event in any event for this year, the impact gross of any potential translation to prices is not expected to be to be material. Of course, for 2026, still to see maybe more material, but we don’t have information. About about manufacturing in The US, honestly, something, let me say, broader twilight is that we were still are worried about more worried about the current and the future stage of health of the American economy and of the consumer confidence much more than the tariffs themselves. So for this reason, I mean, the production in The US is something we are not evaluating Also, because, I mean, you already gave the answer, a very, very clear answer to your question.
I mean, we make production where there is a very strong know how that in this time is Romania and Italy. And so we are not planning to to to to move production from these two two areas, the two region because are the two regions where we can deliver high end high end quality with a very high know how. US is something that I think is premature for sure, but honestly, I see very complex to evaluate any manufacturing facility in The US.
Thomas Chauvet, Analyst, Citi: Thank thank you, Luciano. And just on your comments about your concerns about The US economy, have you and maybe Roberto and Mr. Ruffini started to maybe reassess your short, medium term investment plan there for the rest of the year, but also you’ve got this big flagship store coming early next year. Is that Fifth Avenue store already locked in? Have you signed the lease?
Is it completely fixed term now? Or are you potentially reconsidering some of your investments? I know Elena mentioned rightly this is a long term investment in the brand, particularly in The US and China. But, obviously, the next twelve months or maybe the next three and a half years of mister Trump’s mandate will be maybe be highly uncertain. So if if you recalibrated perhaps your investment plans for particularly The U.
S. Market?
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Thomas, Elena was totally right. I mean, our strategy remains totally unchanged because we strongly believe in the potential of The US of The US as a country and as a market and great potential for Moncler because, as you know very well, our business is under penetrated. And so, I mean, we can we may decide eventually, not now, to slow down the pace of our of our of the implementation of the strategy, but not to change the strategy. And as you correctly highlighted, the most important investment, the most important pillar of our strategy for the next future is the opening of the Flexi store in the Fifth Avenue that is fortunately, let me say fortunately, already locked in. And so the store will open early twenty six and will be a very important strategic step for our future growth in The U.
S.
Pirald Dhania, Analyst, RBC: Thank you.
Conference Operator, Chorus Call: The next question is from Louise Singlehurst, Goldman Sachs. Please go ahead.
Louise Singlehurst, Analyst, Goldman Sachs: Good evening, Luciana and Elena. Thanks Many congratulations on a great start to the year. I know really a very tough environment. We’ll wait to see what comes ahead, but obviously a great start. I wondered if you could just help us think about that space contribution in Q1.
I know you don’t break it down, but just assuming if that was around the mid single digit or whether that was more in Q1. I know seasonally, it’s a little bit higher in the, obviously, the larger quarters. And thinking forward, I know you just talked about the space expansion for The U. S. But more broadly, are you thinking about any other changes from your original plans as you look out to 2025 given the current volatility in recent weeks and whether we should take a little bit of a haircut to that mid single digit space expansion plan for 2025?
And then my second question was just on Mainland China. Obviously, a very solid result in the period. Is there anything that you’re seeing in China, any changes? Obviously, we can talk about the performance during the quarter. Is there anything that you would call out to get some signs of life for the underlying consumer sentiment and what you can tell us there?
Thank you.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Yes. So thanks for your question. About the base contribution, we want to disclose on a quarterly basis the space contribution, but not because we don’t want, but because in a quarter, it’s totally meaningless. But I confirm that our, let me say, guidance and targets for the year end will be in the region of mid single digit. In the past, you may remember that it was mid to high single digit.
Now it’s more mid than than mid high. In each in single quarter, honestly, is is not is not meaningful. About the China, again, China did well not only as a market, but also as a cluster because we did a significant and growing business with the Chinese customers in other regions, specifically Japan and Europe. In both regions, business with the Chinese customers was up as compared to last year. And interesting to say is that in Europe and in our benchmark is still 2019.
Of course, we are still behind the 2019 as a contribution of the Chinese business on the total business in Europe, but it is growing year after year as well as in Japan business with the Chinese customers in Japan was up in the first quarter compared to first quarter of last year. I hope I answered your second question and also the first one, but you will forgive me.
Conference Operator, Chorus Call: That’s great. Thank you. The next question is from Anne Gismar with HSBC. Please go ahead.
Anne Gismar, Analyst, HSBC: Yes. Hi. Good evening. I have two questions, please. So the first one is about the performance by nationality.
I wanted to come back on the performance on the Chinese cluster that was at double digit in Q4. Will it be possible to clarify how much the cluster was up in Q1, please? Was it in the high single digits or still in the low double digits? And my second question is about the split of the growth for the Moncler brand between price mix and volume in Q1. Okay.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: About the Chinese cluster, I mean, we don’t report sorry, but we don’t report specific precise numbers and not on a quarterly basis. Chinese cluster was up. Of course, again, we are very happy about the strength of the brand in China and with the Chinese customers. This is something we keep saying and we are very, very happy and proud of. But we report any specific number, but it was positive.
And the other question was about price mix volume in first quarter. I mean, first quarter, I mean, the reading of first quarter is not so easy because the first quarter is at the intersection between the end of the fall winter season and the beginning of the pre summer season. So depending also on whether a little bit more cold or warm, we may sell more for winter that has a slightly higher price point. So at the end, the long story short, most of the growth was price and price mix, where mix is mostly dependent on a little higher contribution of fallwinter than the, for example, volumes were much, much lower.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group: Laura, if I can help you a little bit on the nationalities because I know the type of exercise you’re trying to do. So when you compare Q4 and Q1, well, in Q4, our Chinese cluster was up low double digit. It was in a very strong double digit. And then we had other nationalities positive, the Americans and the Europeans. And if you might recall, we had the Korean cluster that was flattish and the Japanese cluster that was negative.
In the first quarter, we still had Chinese and Americans growing nicely. They were, let’s say, the two fastest growing nationalities. The Europeans were also positive, maybe a little bit less than these two. So yes, maybe not exactly the same figure as Q4. They were all a little bit moderating, but not materially.
And then we had basically the Koreans that were turning negative and then the Japanese turning flattish. So they sort of swapped these two. These were the key moving parts.
Anne Gismar, Analyst, HSBC: Thank you very much.
Conference Operator, Chorus Call: The next question is from Antoine Berg, BNP. Please go ahead.
Antoine Berg, Analyst, BNP: Yes, good evening. It’s Antoine. I’ve got two questions. So first of all, a bit of a technical question, so sorry about that. But coming back on the tariffs and especially to which to what they are going to be applied.
So I think you’re you have an agreement, I think, the so called first cost program by which you can you’re allowed to use the production cost rather than the transfer price. So basically, for a product that is maybe going to be sold at $100 in The U. S, what’s the taxable base? I don’t know, is it onethree of the retail price that would be a good proxy for calculation? Or in other words, if there is a 20% increase in tariffs, what sort of price increase in The U.
S, you will need to offset that taking into account more price elasticity? My second question is more about the comps because, of course, when you did plus 26% in Q1, of course, it was a very high comp base. So from a mathematical standpoint, then the comps get much easier. I think it’s 8% in Q2, then 0%, then plus nine So mathematically speaking, it should be quite easy for you to have double digit growth in each of the three remaining quarters. So what would these are the math, of course, and comps.
Sometimes they work, sometimes they don’t. But is there, especially regarding Q2, something that would prevent you to grow double digit on a much easier base?
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Antoine, about the first question, you are right. In our industry, we have this benefit, the so called first cost that allows companies to pay duty on the industrial cost under some specific and technical conditions that you probably know. Of course, current calculations, just to make it clear what I said before, I mean, the potential impact this year and eventually next year is based on the assumption, is based on the current situation that provides the the the the first the first cost technicality. First cost, of course, the industrial cost, you may make the calculation, is much lower than the retail price, and it is about 50% of the intercompany price. So of course, it’s a significant benefit.
Second question about, I mean, second quarter, again, comp was good last year. Needless to say, even if we don’t report, but, I mean, with the 26% growth rate, EBITDA in part of all that was organic. Second quarter was weaker. This honestly does not have any meaning for now. I mean, we are we are looking at at the opportunities of our business in this in this second quarter that is becoming more and more important considering the importance of the spring summer season.
But any extrapolation of the opportunity to take advantage of a lower comp of last year is something that I can’t give you the results.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group: Also because, Antoine, I mean, when we were commenting on Q1, we were always looking a little bit like at the past couple of years that we’re growing plus 30% and plus 30%. It’s true that last year Q2 was slower, but the year before it was the fastest growing quarter. If I remember well, it was up 45%. So not an easy comp in the second quarter and particularly given the current environment. I mean, wouldn’t really give you any indication on what to expect.
We obviously feel prudent at this point given the situation.
Antoine Berg, Analyst, BNP: Look, on the comment, yes, it was plus 40 something, I recall that, but it was also when you’re really pushing new strategy, but the sort of greater focus that was presented at the Capital Market Day about pushing a bit the non winter products too. So maybe it was not a pure base of comparison, but I leave it there. I understand the message. Thank you.
Conference Operator, Chorus Call: The next question is from Susi Tibaldi, UBS. Please go ahead.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group: Hi, thanks for taking my questions.
Susi Tibaldi, Analyst, UBS: So I was just wondering how are you planning overall your DTC business for this year given the volatile environment? Because I remember you always say you plan for a mid single digit like for like Last year ended up being a bit below that with 3%. This year, the outlook probably not that much better. So and is there also any difference on how you plan your springsummer versus your fallwinter? Because we see that over the past year or so, actually, your springsummer is becoming a bit smaller in the context of your full year.
And then secondly, I know it’s a sales call, but can you just remind us of some of the costs that you will have in H1 versus H2? If I remember correctly, your marketing phasing is going to be more H1 weighted because of the events that you highlighted earlier. Is there also any other costs that we should consider the timing of which would either benefit or impact your H1 profitability? Thank you.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Okay. So the first question about how we plan our DTC business. You’re totally right. This is what we usually did in the past. This year, we are even more prudent for evident reasons.
But just to remind you that we planned mid single digit in 2023, and we ended up with 19% comp. And we planned 5% last year, and we ended up with a 3% comp. And this is because even if we plan the mid single digit, you may know that we maintain at about 10% production, we decide or not to launch in season. So this was the case, of course, in 2023, in 2024, of course, less. And this year, of course, we don’t know yet.
But in any event, we answered your question, the mid single digit this year is even a little bit less, but still with the same potential to take advantage of the flexibility of our supply chain that is estimated around 10%. So with the 10%, we can fulfill a potential and hopeful additional demand coming from the market. I mean, the way we bend this business has not changed significantly, but just to give you some more color this year, of course, is a little bit more prudent. Talking about the shape of our profit and loss and profitability in the first half, you are right. First of all, we expect a higher marketing spending in the first half of this year than last year, closer to what we reported two years ago when we held the GNC event in London.
So the marketing contribution will be higher, of course, still with the 7% that is our usual golden rule for the year end. Another item to highlight, I’m sure you remember, but just important to reiterate is that last year, in the first half, we reported that the benefit of the insurance payment for the EUR 7,500,000.0 that, of course, this year will not be in our results in this year, that element. For the rest, special anticipate and nothing special we know now I can tell you.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group: And maybe the only thing to remember sorry, so the only thing to remember on top that obviously these are the key moving parts then the profitability will depend on the top line evolution, which is still the most important factor. That’s what you need to take into account. Clear. Thanks.
Conference Operator, Chorus Call: The next question is from Luca Solca, Bernstein. Please go ahead.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group0: Yes. Hello, Luca from Bernstein. The first question about channel dynamics at Stone Island. Optically, the numbers in total look not so good. But actually, when we look at the trends for retail, they look good enough.
I was wondering if you could help us dissect the effect of new space here and if there was, in fact, a positive like for like developments? And how we need to understand the combined first quarter and second quarter in Wholesale? You’re writing that there was a shift in deliveries between the first quarter and the second quarter and also the effect of moving to a higher quality wholesale setup. I wonder if in total, when you look at the combined first two quarters, you expect wholesale to be up in total, considering also the fact that I understood that Stone Island is probably going to rely more on wholesale than retail at least for a while? Second question is also focused on channels and maybe an attempt to understand how the Moncler brand at this time is now organized in The US.
You moved from wholesale to concessions with quite a significant number of key accounts in America. I wonder if the split is now approaching the total split between retail and wholesale, and I doubt it, but but I, you know, I would be grateful if you could give us a a sense of how this has been moving and where we stand in terms of wholesale and retail for Moncler in The U. S. Thanks very much.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Hi, Luca. Starting from Stone Island and starting from your second question, the wholesale. The wholesale is not expected to be positive in the first half of the year and not in the fiscal year. Our, let me say, expectation and what we already said to the market is that we expect still a negative number in wholesale for Stonai Island this year, but single digit, let me say, maybe mid, maybe high single digit, but in any event, a negative number. And this will be the case in first half because the second quarter, as I have said before, is expected to be positive for the different timing in deliveries that made the first quarter particularly bad.
The 19% down is driven in part by this timing in deliveries, but delivery in the second quarter will not be enough to make the number for the first half positive. But in any event, it will be negative single digit. And what I can tell you is that we expect the second quarter to be better. So both single digit negative, but second half, hopefully better than first half. I hope I was clear enough.
Talking about talking about DTC, I mean, space is not something we disclose, but in any event, you are right. There is a space contribution, but there is also a significant organic growth contribution. So overall, the DTC channel is doing is doing fairly well. Let me say that all of the retail metrics inside the store are good, are very good. Notwithstanding, I mean, pressure, some pressure coming from from traffic, not only for Sun Island, but, I traffic is a more complex variable.
But overall, I think that we are doing I mean, the the the team the Sun Island team is doing a great job in developing that kind of retail culture that we keep we keep talking about. Something something important about the space, yes, not for the quarter, but for the year is that you may remember for this year, we don’t expect a significant space contribution because except for the openings of last year. But this year this year, we are not planning to open many stores. So we have we are implementing, and we we already implemented some specific relocation projects like the opening of the new store in Paris that Erez mentioned before. Of course, much more powerful, also bigger, but not many new openings because we want at this stage of the development of the brand to maximize the potential of the organic growth.
So this is to an island. Talking about Moncler talking about specifically The US, US wholesale represents now about 20% of the total. It is still an important 20%, let me say, because, I mean, it’s the 20% we do with the department stores that are for our industry, not for nuclear only, very important in that country. Of course, we continue to implement our strategy together with our department stores with our partners department stores to implement as much as we can a strategy to convert business wholesale business into hybrid models or concession models as we did in the recent past with the Saks Saks, the story of Fifth Avenue, the Saks, the online business with Nordstrom or with Bloomingdale’s. This is something that is still open and on our in the agenda, on our conversations we have with the the new bigger player that is Saks after after the merger.
So, again, the number is what I told you before is 20%. Of course, overall, as you know, right now, the contribution of wholesale is lower, is about 13%. So in The U. S, it’s still a little bit higher, but not that much.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group: And Luca, just to make you understand the progression, if you just go back a couple of years to, let’s say, 2022, wholesale was about 35% of sales in The U. S. So we moved from 35% to 20% just in a couple of years, not to mention obviously ten years ago when the business was more like fifty-fifty.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group0: Understood. Thank you very much indeed. Thank you both.
Conference Operator, Chorus Call: The next question is from Pirald Dhania, RBC. Please go ahead.
Pirald Dhania, Analyst, RBC: Thank you. Good evening. So my first question just relates to the approach towards costs and any projects you have from an OpEx perspective. Given the increased macro volatility in the market, are you planning to postpone or reduce your OpEx spending as you progress through 2025? And then my second question just relates to, Grenoble.
Obviously, a very successful and high profile event at Courcheval and you’ve been talking for a number of quarters now about the, intention to increase the technical outerwear component within the product range. Could you just help us understand whether the mix of Grenoble through the autumnwinter twenty four, twenty five period has increased and the contribution to growth that that may have had on the back of the event that you’ve hosted earlier this year? Thank you.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Thank you for your question. About our current plans to, I mean, reduce our expenses, I mean, this is something that is, let me say, constantly in our agenda because this company, this organization, and this is several, let me say, quite good cost efficient organization. Cost efficiency is part of our of our culture. Course, in this kind of situation, we are even more focused on reducing expenses. Let me say that all expenses, all projects in our budget are important, but, of course, some of them are still important, but less urgent.
Those are important and urgent. So we tend to give a priority to this kind of projects, to this kind of expenses, and to not to cancel, but maybe to delay some projects or to delay some some expenses in order to reduce the cost impact in this in this in this year. I mean, the company has been quite flexible, really active on this side. Also, there is something important to reiterate that you probably know, but, I mean, the structure of our expenses is 60% fixed and 40% variable. That, of course, is something important to protect the profitability in this kind of situation.
Of course, on the other side, it’s something that decreases the operating leverage when business is doing very well. Let me say that is more safe, but good in this situation. About Grenoble represents about 10% of our business. It is growing faster than the rest of the business. So I mean, of course, we have a great expectation for Grenoble.
Of course, it will take it will take time, but, I mean, it keeps growing not at a very fast pace, but, honestly, very, very nice. And, again, we have a great expectation not only for what Grenoble is and must become more and more in the winter in the winter’s post, but to position Grenoble also like as the most authentic luxury brand for outdoors independently on the season. And so also, it’s been summer season. Our effort is becoming more and more visible with a very, let me say, nice nice collection that is doing that is doing quite well. So great expectation for Grenoble, and, I mean, results are good.
Of course, we are never in a hurry when we wanted to implement a long lasting strategic project. And so don’t expect great results overnight, but step by step, we are very confident about the potential of Grenoble. Great. Thank you.
Conference Operator, Chorus Call: The next question is from Liwei Hu, CICC. Please go ahead.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group1: Thank you, Luciano and Lina, and good evening, and congrats on these resilient results. So I have two questions, both on tariff. The first one is, is it possible to give us a breakdown of in house production and third party production at the moment? I understand they’re mostly in Europe, but I just want to get a sense of our direct control on production, you know, to counter with the tariff. And then the second question is more of a thinking exercise.
So in the case that U. S. Consumers spend more in Europe, should we hike price in The U. S, will that be margin accretive or margin dilutive theoretically? Because when we look at 2024, when Chinese spend more in Japan, it looks like it was more margin dilutive for the industry, but China and Japan had different cost base in terms of rental.
So I wonder when U. S. Travel to The U. S. And purchase more in the when U.
S. Consumers purchase more in the Europe, will that also be margin dilutive or is it more insignificant impact? Thank you very much.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: Okay. Thank you for your question. Our in house production by the end of this year should be in the region of 30%, three-zero. And because, of course, we have, I mean, our production facility with the two now buildings in Romania. I mean, we just I mean, we keep buying some small facilities in Romania, so I don’t want to to bore you.
But in any way, the something important to highlight is that the opening of a facility in Italy for Litur only in September of last year. And I mean, altogether, we expect an about 30% in our production for the end of this year. Talking about dilutive or accretive business if customers move from one region to the other. Honestly, this is not something particularly relevant for us. You mentioned Japan.
Honestly, Japan for for historical reasons, but, I mean, our profitability in Japan is not much different from China. And talking about your current example of American customers that may come to Europe to buy, let me say that, first of all, the price gap with The US at the current exchange rate is much, much lower than than in the past. So this makes Europe more convenient, but not significantly more convenient. Also, I mean, any dollar and euro people spend in Europe or in America on a business, retail business that is mostly fixed rent is additional margin. So the main difference talking of eventual dilution of accretion is the structure of our lease contracts.
In some regions, like in Asia, is mostly variable. Europe and in America, it’s mostly fixed. So when rents are fixed, an additional euro of business is an important contribution to margin. So again, I follow your thought, not honestly something we see and we look at as relevant issue.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group1: Thank you very much. This is very helpful.
Conference Operator, Chorus Call: The last question is from Figerio Fujimori, Stifel. Please go ahead.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group2: Hi, Luciano and Elena. I have just one quick follow-up on China. I was just wondering if you could elaborate on what you were experiencing in terms of shopping more traffic in China in March post Chinese New Year? Thank you.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: I mean, the post Chinese New Year, of course, was softer as expected. I’m not sure I understand the question, but I mean, before the the Chinese New Year, business was very good and better better than last year after the Chinese after the Chinese New Year, of course, traffic traffic was down, but this was something totally expected. Honestly, we don’t see any other component in traffic that we can consider relevant about the customer behavior in China, except what I said. But tell me if this was the question or I misunderstood the question.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group2: That’s clear. Thanks, Lucian.
Luciano Santo, Chief Corporate and Supply Officer, Moncler Group: You’re welcome.
Conference Operator, Chorus Call: Gentlemen, there are no more questions registered at this time. I turn the conference back to the management for any closing remarks.
Elena Mariani, Group Strategic Planning and Investor Relations Director, Moncler Group: Thank you. Thank you, everyone, for participating in this call. And for any follow-up questions, as usual, you can contact myself or the rest of the IR team. And as a reminder, our H1 twenty twenty five interim management statement will be released on July 23 after market close, and our quiet period will start on June 24. Thank you again and have a great rest of the evening.
Conference Operator, Chorus Call: Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your telephones.
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