Moncler Group Revenues Exceed 1B Euro Mark in First Half
Sales climbed 24 percent in the first six months of the year, compared with the same period last year.
Moncler, fall 2023ADAM DUKE PHOTOGRAPHY
MILAN — For the first time in its history, Moncler Group revenues exceeded the 1 billion euro mark in the first half of the year, chairman and chief executive officer Remo Ruffini underscored proudly Wednesday.
The group reported revenues of 1.13 billion euros in the first six months of the year ended June 30, climbing 24 percent compared with 918.4 million euros in the same period in 2022.
Ruffini said the milestone was a “testament to the great teamwork, innovative thinking, and customer-centric approach that defines our group. At Moncler, we are driving a new level of engagement with our customers all around the globe, leveraging all the dimensions of the brand. At Stone Island, we have just started the second chapter of the evolution of this unique brand under the leadership of the newly appointed CEO.”
As reported, Triefus, previously CEO of Gucci Vault and Metaverse Ventures and senior executive vice president, corporate and brand strategy at the Italian luxury brand, joined Stone Island on June 1.
Asked about Triefus’ purview and tasks during a call with analysts at the end of trading in Milan where the group is publicly traded, Ruffini defined Stone Island as “an amazing brand very close to our mentality and vision,” and that after an initial control of its distribution, the second phase will focus on the direct-to-consumer channel, “changing the culture in the company, a most difficult” step, and also on raising the brand in “a more premium world” with new stores. “We have very clear ideas and we are very optimistic that we can develop this journey in two or three years.”
Luciano Santel, the group’s chief corporate and supply officer, was asked about other potential merger and acquisition opportunities, given Moncler’s strong net financial position of 470.7 million euros. “Stone Island is an amazing brand, we are building the team, also with a new CMO and digital director, but we bought it because of the love for the brand and we were able to connect the two families. Now there is no specific project and no thought of an acquisition, which may happen in the future but independently of the cash.”
If it were to happen, “it would have to be like with Stone Island,” Santel added.
Santel also responded to a question about peer luxury companies buying into the supply chain, saying that the group’s most important investment last year was building the second production factory in Romania to double its manufacturing capacity, and that no acquisition was on the horizon. The group did buy two small outerwear suppliers at the end of last year, however, and Santel said it continues to look at potential acquisitions, in knitwear for example, while investing in its own factories.
“While remaining mindful of a still-uncertain and complex environment, we will continue to invest in our organization and in our people to enable our brands to express their full potential,” said Ruffini.
In the second quarter, group revenues totaled 410.2 million euros, up 26 percent at constant exchange rates compared with the same period of 2022. In the second quarter, the Moncler and Stone Island brands reported revenues of 330.2 million euros and 80 million euros, respectively.
In the first half, Moncler brand revenues totaled 935 million euros, up 29 percent, with a strong double-digit growth continuing in the second quarter, up 32 percent at constant exchange rates, accelerating sequentially compared to the previous quarter. Moncler’s direct-to-consumer channel rose 45 percent at constant exchange in the second quarter driven by solid double-digit growth in all of its three main regions.
Revenues of Stone Island amounted to 201.6 million euros in the half, up 4 percent compared with the same period of 2022. The second quarter was up 5 percent at constant exchange rates compared with the same period of the previous year, in line with the first quarter, driven by Asia and the Europe, Middle East and Africa region.
In the first half, group net profit totaled 145.4 million euros, compared with 211.3 million euros in the first half of 2022, which included an extraordinary tax benefit of 92.3 million euros for the Stone Island brand tax value realignment.
Group operating profit amounted to 217.8 million euros, compared with 180.2 million euros in the previous year.
During the year Moncler will further strengthen the three dimensions of the brand — Moncler Collection, Grenoble and Genius. The latter is entering a new phase of co-creation, as seen in London last February. Moncler Grenoble will continue to strengthen its awareness, with dedicated marketing initiatives and a wider and more complete performance-oriented collection, said chief brand officer Gino Fisanotti.
“There is great potential for Grenoble, and our strong summer collection proved we are becoming relevant year-round,” he said, noting the brand had launched its first summer campaign. Speaking of the expansion in footwear, he said sales of the category were up high double digits in the second quarter.
A key goal is to develop the Stone Island brand at an international and d-to-c channel, said Roberto Eggs, chief business strategy and global markets officer. In the year the brand will continue to strengthen its position in core markets, such as European countries, and increase its penetration in less mature regions with high potential.
At the group level, Eggs said he had seen a strong rebound of tourism for the Chinese cluster, which has become the first nationality in Europe now. Koreans are the second in Europe, aligned with the Americans.
Eggs was asked about his contract at the group, perhaps following a report that he was seen in the industry as a potential successor for Francesca Bellettini at Yves Saint Laurent. But he said his contract was “aligned with his mandate and [he is] fully committed to Moncler and the group.”
Moncler sales in Asia in the half rose 37 percent to 456.7 million euros, representing almost 49 percent of the total, including an acceleration of 55 percent in the second quarter. The Asia-Pacific region recorded a strong sequential improvement, favored by an easy comparable base in mainland China, whose performance in 2022 was negatively impacted by the lockdowns that caused the closure of around a third of Moncler’s local stores in April and May. June had seen a strong improvement with the reopening of all the stores. Japan and Korea continued to record solid double-digit growth in the second quarter.
In the EMEA area, revenues grew 29 percent to 340.6 million euros, accounting for 36.4 percent of the total, with an increase in the second quarter of 30 percent, supported by demand from local customers and a continued improvement in tourist flows, said Eggs. American, Chinese and Korean customers were the strongest contributors to tourist purchases in the region.
Revenues in the Americas recorded a 9 percent gain to 137.6 million euros in the first half and declined 5 percent in the second quarter, due to the impact of the conversion of Nordstrom from a wholesale to a hybrid business model, which drove the wholesale channel to negative territory in the region in the quarter, Eggs explained.
In the first half of 2023, the d-to-c channel recorded revenues of 757.5 million euros, up 36 percent. Revenues in the second quarter rose 45 percent, supported by strong double-digit growth in all three regions, with Asia outperforming. The direct online channel also continued to grow by double digits.
In the first half, like-for-like sales climbed 34 percent.
The wholesale channel reported revenues of 177.5 million euros in the first half, up 5 percent.
As of June 30, Moncler had 257 directly operated stores. The brand also operates 59 wholesale shops-in-shop.
Stone Island reported sales of 145.6 million euros in the EMEA region, up 5 percent on the same period last year. In the second quarter, revenues grew 8 percent, driven by a positive contribution from both distribution channels, with d-to-c outperforming.
Asia reached revenues of 38.8 million euros in the first half, growing 17 percent. In the second quarter, the region grew 13 percent, boosted by a solid performance in mainland China and Japan, and to some perimeter effects following the 2022 wholesale to d-to-c conversions in Japan. The Korean market’s performance was softer, also due to the ongoing changes in the business model.
The Americas were down 24 percent. The second quarter saw a decline of 31 percent, as wholesale performance continued to be impacted by a softer business trend and a more cautious approach from department stores.
The wholesale channel recorded revenues of 127.8 million euros in the first half of the year, down 4 percent. In the second quarter, revenues grew 2 percent, despite the impact of the 16 Japanese conversions from wholesale to d-to-c in 2022, the negative performance in the Americas and the strict volume control adopted in the management of this channel.
The d-to-c channel grew 21 percent to 73.7 million euros in the first half, representing 37 percent of the total. In the second quarter, revenues in this channel were up 9 percent, mainly due to solid double-digit growth in EMEA, APAC and Japan, which more than offset more difficult trends in the Americas and Korea.
As of June 30, Stone Island had 74 directly operated stores, an increase of three units compared to the end of March, and 19 mono-brand wholesale stores, in line with the first quarter.
At the group level, in the first half, marketing expenses amounted to 101.6 million euros, representing 8.9 percent of revenues, compared with 5.4 percent in the first half of 2022, due to a different phasing of marketing activities. Santel said he expected an incidence on revenues of around 7 percent at the end of the year, in line with the previous fiscal year.
In the first half, capital expenditures totaled 69.5 million euros, compared with 36.5 million euros in the first half last year. Investments related to the distribution network amounted to 37.9 million euros, of which more than half were dedicated to renovation and expansion projects. Investments related to infrastructure were equal to 31.6 million euros, mainly related to IT, production and logistics.
As of June 30, the net financial position stood at 470.7 million euros in net cash compared with 818.2 million euros at the end of December 2022 after a payment dividend of 300.3 million euros.