The First Half Profit Boost Defies the Industry Downturn Seen from Other Major Groups
Despite a sluggish luxury sector and amidst other luxury groups reporting losses, Moncler Group has reported a sales and profitability gain for the first half of the year. The company also expressed optimism about its business operations in China.
Moncler Group exceeded consensus estimates with a net profit rise of 24.3 percent to 180.7 million euros from 145.3 million euros in the same period last year. For the second quarter, the group reported a revenue increase of 3 percent to 412.2 million euros. The announcement came just on the heels of the news that Kering and LVMH reported a 50 percent drop in net profit and a 14 percent decrease in its bottom line for the first half of the year, respectively.
The total revenues for the first half of the year tallied 1.23 billion euros—an 8 percent hike compared to 1.13 billion euros in the first half of 2020. At constant exchange rates, the sales increased 11 percent. Operating profit also rose 18.7 percent to 258.7 million euros, against market expectations and up from 217.8 million euros, with a 21 percent margin.
Remo Ruffini, Chairman and CEO of Moncler Group said, “We are very pleased with the solid set of results we delivered in the first half of the year amid a generally complex operating environment for the luxury goods sector.” Ruffini credited “strong growth in the DTC channel across all regions” for both Moncler and Stone Island brands.
Ruffini acknowledged the volatile global macroeconomic context and the industry’s continuing normalization process. However, he remains confident in the group’s ability to manage the pressure through their strategic initiatives and a deep connection with their communities. His confidence also extends to the continuous pursuit of product excellence and a focus on high-quality and selective growth, predicting these will further strengthen the Moncler brands in the future.
During a conference call with analysts, Roberto Eggs, Chief Business Strategy and Global Market Officer was asked multiple times about the company’s business in China. He acknowledged the increased Chinese spending in Japan due to the weak yen but also expressed confidence in the strength of the Chinese market, which showed a “double digits in the second quarter, even if normalizing compared with the first quarter.” Eggs also noted that there is still room for the group to penetrate the Chinese market.
On the other hand, Gino Fisanotti, Moncler’s Chief Brand Officer, shared that the upcoming Moncler Genius event in Shanghai, scheduled for October 19, will further strengthen their connection with the Chinese market. Business with South Korea is described as “softer”, but the company is now focusing on the Americas, where Moncler is under-distributed. Eggs views the potential Saks and Neiman Marcus deal as an opportunity and highlighted Moncler’s strong relations with both.
In the first half of 2024, revenues from Stone Island – also part of the Moncler Group – amounted to 188.9 million euros, indicating a decreased of 6 percent as the company shifted its business into DTC from primarily wholesale.
Finally, in terms of capital expenditure, Moncler Group spent 56.1 million euros in the first half, as compared to 69.5 million euros in the first half of the previous year, due to a different sequence of spending.