Moncler Group Q1 Sales Boosted by DTC, Asia Pacific

MILAN — Lifted by its direct-to-consumer channel, the Moncler Group posted a strong set of results in the first quarter of the year, as revenues rose 13 percent to 818 million euros, compared with 726.4 million euros in the same period last year. At constant exchange rates, sales were up 16 percent.

Chairman and chief executive officer Remo Ruffini touted the “excellent” performance of the group, and expressed his pride in the “distinctive brand experiences we created over the past few months, building stronger and stronger connections with our communities.”

Referring to the Moncler Grenoble fashion show held in St. Moritz in February, Ruffini said “we brought people from across the globe into the universe of Moncler Grenoble, bringing together high style and high performance, while further authenticating this unique brand dimension. Meanwhile, Stone Island unveiled its new brand manifesto, The Compass Inside, with a signature event in Milan, and launched a new global campaign featuring members of its cultural community.”

While “very confident in the strong potential” of both Moncler and Stone Island, he underscored that he was “ also conscious of the still volatile macroeconomic environment and of the normalization trends in our sector, which require us to remain prudent and reactive in light of these ongoing uncertainties.”

This caution was reiterated by chief corporate and supply officer Luciano Santel during a call with analysts on Wednesday evening at the end of trading, as he underscored that the three months ended March 31 were “very strong” but that at the same time “it would be a mistake to extrapolate this for the next three quarters. We maintain a very prudent and vigilant view based on an uncertain scenario. We don’t endorse any more aggressive and optimistic extrapolations. Last year we did extremely well in November and December, the two strongest months in our history and it’s difficult to replicate those, despite the strong first quarter.”

That said, the mood of the call was upbeat as Santel fielded several questions on China and the Chinese cluster.  The latter accounts for one third of total retail sales and out of the 15 new store openings this year, six will be in China.

“January and March were good and February  was extremely good on the back of the Chinese New Year. Chinese customers traveled around the world and in Japan and more than last year to Europe. The number is  still behind 2019 but not so far, it’s getting closer,” said Santel. Asked about current trading, he said April is the “least important month” for the group, still “positive but showing a normalized trend and not as strong as the first quarter and not meaningful” overall.

Stone Island Men's Fall 2024

Stone Island Men’s Fall 2024

Courtesy of Stone Island

In the first quarter, sales of the Moncler brand rose 17 percent to 705 million euros, compared with 604.8 million euros in the first three months of 2023. At constant currency, they were up 20 percent. 

In the first three months of 2024 revenues in Asia (which includes Asia Pacific, Japan and Korea) grew 19 percent to 362.6 million euros, driven by very solid growth in the Chinese mainland despite a very tough comparable base and the increase in Chinese consumption abroad. Japan and Korea continued to deliver strong performance, due to positive contribution from both tourists and locals. “We implemented a very strong and clear brand strategy in Mainland China, including distribution, for years,” said Santel, when asked about the strong performance in China. “We don’t’ have many stores and not in all cities, we carefully looked at important cities  and they are powerful ambassadors of our brand.” He also paid tribute to “a very strong organization, whose first priority is the customer experience and satisfaction.” 

In the Europe, Middle East and Africa region, revenues climbed  14 percent to 246 million euros, lifted by tourist and local spending. Chinese, American and Korean customers were the strongest contributors to tourist purchases in the region.

Revenues in the Americas were up 14 percent to 96.4 million euros accelerating compared to the previous quarter, with the strong performance in the DTC channel more than offsetting the decline in the wholesale channel. The performance of the region in the two channels continued to be influenced by the conversions of Nordstrom and part of Saks from a wholesale to a DTC business model.  “The first quarter in the U.S. was very good but that market is still volatile, more than in other regions, with ups and downs, and wholesale is under pressure,” said Santel.

In the first three months of 2024 the DTC channel recorded revenues of 608.5 million euros, up 21 percent  at constant currency.   

The wholesale channel was down 7 percent to 96.5 million euros mainly impacted by the above-mentioned conversions of Nordstrom and part of Saks in the U.S. and by the ongoing efforts to upgrade the quality of the distribution network. 

As of 31 March 2024, the network of Moncler mono-brand boutiques comprised 275 directly operated stores , three more than at the end of December last year. The Moncler brand also operated 56 wholesale shop-in-shops, a decrease of one unit.

In the first quarter, Stone Island revenues amounted to 113 million euros, down 7 percent  compared with 121.6 million euros in the same period last year, dented by the streamlining of its wholesale channel.

“The first quarter reflected the views for the year, we expect a flattish top line, and the impact of wholesale will be felt also in the second quarter,” said Santel. “Behind this is a strong direct-to-consumer strategy, wholesale will be down in the high teens in the year. We are conscious it’s still a long story to change and build a direct-to-consumer culture.”

In the period, the Europe, Middle East and Africa region, the most important for the brand, recorded revenues of 77.7 million euros, a decline of 12 percent compared with the same period in 2023, with the strong double-digit performance in the DTC channel not enough to offset the decline in the wholesale channel. 

Sales in Asia rose 19 percent to 27.4 million euros, mainly driven by the very strong performance of Japan. At constant currency sales rose 27 percent. Trends in Korea remained softer than other parts of Asia, but improved sequentially. Following the internalization of the market, the performance of the Chinese mainland was impacted by the ongoing restructuring of the distribution network started at the end of 2023. 

The Americas region was down 26 percent to 8 million euros. The positive performance of the DTC channel was more than offset by the decline in the wholesale channel, which continued to be impacted by challenging trends mostly among department stores, as well as by the ongoing efforts to upgrade the quality of this channel.

In the first three months of 2024 the wholesale channel, which continues to be the most important channel for the brand, recorded revenues of 63.6 million euros, down 23 percent compared to the same period of 2023.

DTC revenues reached 49.4 million euros, up 26 percent year-on-year. Growth in this channel improved sequentially in all three regions, with Asia and EMEA outperforming. 

As of 31 March 2024, the network of Stone Island mono-brand stores comprised 83 directly operated stores, an increase of two units compared with the end of  December 2023. The Stone Island brand also operated 13 mono-brand wholesale stores, a decrease of two units. 

Responding to an analyst, Santel said the group is “not looking or even thinking about potential acquisitions , we are all very busy with Moncler and Stone Island. Both have great potential and we need to take care of them and work hard.”

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