LONDON — Moncler Group barreled through the first half of the year, beating analysts’ expectations with a 46 percent surge in group revenues to 918.4 million euros at constant exchange, bolstered by a double-digit increases at Moncler and Stone Island and a “strong response” to the spring 2022 collections.
Revenue was around 3 percent ahead of consensus, while EBIT was 18 percent above market expectations, according to Bernstein, which described the results as “reassuring,” and Moncler Group as one of the top performers in this latest luxury earnings period. Barclays called the numbers “solid,” as did analysts at UBS.
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Sales at the Moncler brand rose 27 percent to 724.3 million euros at constant exchange, with growth in the second quarter surging past pre-pandemic levels in all markets, with the exception of APAC.
The group’s Asia region, which includes APAC, Japan and South Korea, grew 16 percent in the first half driven by strong double-digit growth in the second quarter in South Korea and Japan. Revenues in South Korea more than doubled compared with pre-pandemic levels in the second quarter, while Japan followed with “solid and accelerating growth” compared with the previous quarter, the group said.
In APAC specifically, Moncler’s performance was negatively impacted by the lockdowns in mainland China. Around a third of stores were shut in April and May, although the group said June showed a “strong improvement” after those units reopened.
In EMEA, revenues increased by 42 percent, driven by “solid demand” from locals, and American tourists in particular. France, the Middle East and Germany contributed the most to Moncler’s growth of the second quarter.
Revenues in the Americas grew by 28 percent, with the U.S. leading the uptick.
First-half revenues at Stone Island reached 194.1 million euros, up 33 percent on a pro-forma basis. The business was consolidated onto the group’s balance sheet in April 2021.
Remo Ruffini, chairman and chief executive officer of Moncler, said the first half was marked by strong macroeconomic and geopolitical instability in Ukraine and Russia, the lockdowns in China and severe supply chain disruption.
Despite those macro pressures, he said the group exceeded expectations, driven by the contribution of Moncler and the newly acquired Stone Island.
“While the overall context remains uncertain and volatile, we head into our most important part of the year with confidence, underpinned by our strategy and the operational flexibility that has always made us stand out, together with a financial solidity and a clear vision oriented toward the continuous strengthening of the brands,” Ruffini said.
During the analyst call late Wednesday, Ruffini gave a special shoutout to South Korea, a market that he described as “best-in-class, and one of the most vibrant” regions for the group.
Looking ahead, he said Moncler needs to play a “long game” with regard to growth, and needs to stay nimble. “There can be no shortcuts,” he said.
In the second half, he also noted that the group will be marking two anniversaries — a 70th milestone for Moncler, and a 40th for Stone Island.
Roberto Eggs, chief business strategy and global markets officer, said he was “quite confident” that China’s rebound would continue into the second half, given that there are no more COVID-19-related lockdowns.
He noted that there was a positive response to the soft launch of Moncler’s brands on Tmall, and that neighboring markets such as Taiwan, Hong Kong and Macau were also coming back to life.
Like Ruffini, Eggs noted that Korea remains dynamic and was one of “the most resilient markets through the pandemic.”
Eggs added that Europe benefited from a flood of big-spending American tourists who accounted for some 10 percent of second-quarter sales in the EMEA region. “In Europe, the American tourists are back but the Japanese and Chinese are still missing,” he said.
The group’s EBIT in the period nearly doubled to 180.2 million euros, with a margin of 19.6 percent, while net income nearly quadrupled to 211.3 million. The increase in net income was due partly to an extraordinary tax benefit of 92.3 million euros related to Stone Island.
The group’s net financial position amounted to 356.3 million euros, compared to 729.6 million euros on Dec. 31, and 233.9 million euros on June 30, 2021. The company said dividend payments, a share buyback program and an upfront tax payment related to Stone Island contributed to the lower sum.
The company has big expansion plans for the second half, its golden sales period. Some 15 Moncler and Stone Island stores will open, with total capital expenditure for the year set to hit 160 million euros.
There are 238 Moncler stores and 54 Stone Island stores worldwide.
The group said it has also been taking control of the Stone Island distribution network. In the U.K., the brand’s most important market in Europe, Moncler is taking control of e-commerce and the Brewer Street store in London’s Soho. There are also plans to open concessions at Harrods and Selfridges within the next 18 months.
Moncler Group has inked a joint venture deal for Stone Island’s business in South Korea, while later this year a new concept Stone Island store will open in Chicago. According to Eggs, the interior design will encourage customers to “live and experience the brand” as they shop.
The group has also been putting a big focus on cultivating its year-round appeal.
While Moncler may have made its fortune selling shapely puffer jackets, it has been broadening its reach via the Moncler Genius brand and designer collaborations; the new focus on Grenoble ski clothing and tech-focused outerwear, and the acquisition last year of upscale street brand Stone Island.
Earlier this year, however, Ruffini’s decision to put a greater focus on the Moncler and Grenoble brands, and tweak the Moncler Genius strategy, was among the reasons the company’s shares fell by almost 6 percent in a single day in early May.
The shares fell after Ruffini announced during a Capital Markets Day that Moncler Genius could also be about “art, music, movies, sports,” in addition to fashion. His announcement coincided with a decision by the U.S. Federal Reserve to hike interest rates, which rattled markets worldwide, and dragged shares down.
A Moncler spokesperson said the strategy presented during Capital Markets Day in May had been “well received” by analysts and investors alike.