Moncler reports record sales as demand returns in China

Moncler SpA saw sales jump by 24 percent in the first half of the year, beating consensus estimates and crossing the €1 billion mark for the first time.

The Italian luxury outerwear maker reported sales of 1.14 billion euros in the first six months, mainly driven by the Moncler brand, which grew 29 percent year-on-year, according to a statement. Sales drove a 39 percent increase in Asia, including a 55 percent acceleration in the second quarter. The Moncler brand makes up 82 percent of the company’s revenue.

The Moncler brand appears to have largely avoided the worst effects of the US slowdown, growing 3 percent year-over-year in the first half in the Americas. The second quarter saw a slight decline of 5 percent, due to the impact of Nordstrom’s transition of wholesale stores to a hybrid retail model. That pushed the numbers into negative territory. With the exception of Nordstrom, “growth would have been positive, low single-digit,” said Roberto Eggs, chief business strategy and global market officer.

American revenue from the group’s Stone Island brand fell 25 percent in the first half compared to a year earlier, exposing some weaknesses. The company said the second quarter saw a 31 percent decline as wholesale performance continued to be affected by weak sales and a more cautious approach from stores as a result.

After rallying in the first half of the year, European luxury stocks are battling a slowdown in the United States as consumer spending has shown almost zero growth since January after adjusting for inflation. Richemont set the tone last week by reporting a surprising drop in revenue from the Americas in the three months through June. LVMH shares fell today after posting a slight decline in revenue in the US, the only region where this was the case.

Moncler shares fell 2 percent on Wednesday, though the company remained comfortably near the top of the range. Its shares are still up more than 20 percent year-to-date, after peaking in April.

Incorporating Stone Island in 2021 helped the company cater to a broader audience. Although only a fifth the size of the Moncler brand, Stone Island offers a gateway into the sporty youth luxury segment with plenty of room for international growth, according to Bloomberg Intelligence.

Much of the brand’s success hinges on its shift from wholesale sales, which accounted for 63 percent of Stone Island’s revenue in the first half of the year, to direct-to-consumer channels. The Moncler Group said its focus this year will be on expanding and relocating stores to emphasize its brand visibility. The group intends to “increase its penetration into less mature regions with high potential”.

The task of executing this has been given to Robert Trevos, a Gucci and Armani veteran who began his role as CEO on June 1.

The addition of Stone Island is also likely to reduce the company’s reliance on winter outerwear. This, along with Project Genius, which includes collaborations with a rotating team of designers, gives the brand a platform to grab attention year-round. Costly marketing events also seem to resonate. The latest Genius event, held in London in February, drew more than 12,000 people, including many A-list celebrities.

A healthy cash pile leaves room for more growth, though the ongoing slowdown in the US is concerning given the company’s reliance on the consumer market.

By Maggie Scheltag

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