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Moncler Group’s revenues dropped 3 per cent year-on-year in the third quarter to €632.5 million, thanks to poor wholesale demand, the company said on Tuesday. Despite that, revenues for the full year stayed stable, up 6 per cent year-on-year at constant exchange rates in the first nine months of 2024, reaching €1.87 billion.
“Our industry is facing a period of continuous volatility, characterised by a more difficult global macroeconomic context, which has been impacting consumer confidence in several markets. In light of these ongoing uncertainties, we remain focused on what we do best: building long-lasting connections with our customers, and, most importantly, creating energy and emotions around our brands,” said Remo Ruffini, Moncler Group chairman and CEO, in a statement, referencing its latest City of Genius event in Shanghai. “As we head into the final part of the year, with a number of exciting initiatives planned for both Moncler and Stone Island, we remain committed to our brand-first, long-term oriented strategy, which I believe will position us well to navigate these challenging times.”
Moncler’s results, while modest, outpace the market, which is facing an overall slowdown spurred by soft demand in China and a backlash to price hikes. Sales in LVMH’s fashion division fell 5 per cent, while Kering was down 16 per cent in the same quarter. In a note, Bernstein luxury analyst Luca Solca said that, “Despite difficult comps, Moncler remains a candidate to get through the year-end better than most.” In September, LVMH acquired a 10 per cent minority stake in Ruffini’s investment vehicle Double R, which owns a direct stake in Moncler. LVMH chairman and CEO Bernard Arnault called Moncler “one of the most significant entrepreneurial stories in the industry over the past twenty years”, at the time of the announcement.
The Moncler brand’s sales were down 3 per cent, negatively impacted by wholesale, which dropped 9 per cent in the period (wholesale sales represent 20 per cent of revenue for the brand). Direct-to-consumer (DTC) sales — which make up 80 per cent of revenue — grew 13 per cent in for the first nine months of the year, but were flat in Q3. Chief corporate and supply officer Luciano Santel told investors during the call that a weak e-commerce performance in Europe is what impacted DTC.
“The online business is facing difficulties for everyone — companies that are pure online businesses have been struggling and some of them have disappeared, others are in serious trouble — and this is because it’s not something new, they lost an important part of their customers,” he said.
Moncler brand sales in Asia were down 2 per cent in the region, as the tourist flow to Japan normalised and macro conditions continued to knock consumer confidence, especially in China. “Japan was positive but it was much better in July and August, less in September because the price gap between Japan and China made for less convenient shopping in Japan,” Santel said. EMEA fell 3 per cent in Q3 due to a combination of challenges across both wholesale and DTC. The Americas declined 6 per cent in Q3, again due to challenges in wholesale.
Stone Island, which makes up 16 per cent of the group’s sales, saw sales drop 5 per cent to €292.4 million in the first nine months, while Q3 was down 4 per cent year-on-year. DTC sales for Stone Island soared 28 per cent, but were almost entirely offset by a 22 per cent drop in the wholesale channel (wholesale makes up 54 per cent of revenues for the brand, while DTC represents 46 per cent). Sales in Asia grew 23 per cent year-on-year in the nine months (also driven by Japan), but EMEA dropped 9 per cent and the Americas sank 24 per cent, impacted by wholesale declines.
Santel also said prices at Moncler will increase mid-single digits next year, driven by inflation. “Unfortunately, our production costs keep growing — not as much as two years ago, but in the region of single digits. Due to the increase of labour cost, that is the most important driver of such an increase,” he said. For Stone Island, he expects a mid to low-single-digit price increase.
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