MILAN — Growth across all markets and distribution channels helped Moncler SpA report net profits in the first half that were broadly in line with the same period last year, on the back of a 17 percent rise in revenues.

In the six months ended June 30, net profit inched down 1.1 percent to 33.6 million euros, or $37.6 million, from 34 million euros, or $39.8 million in the same period last year.

Revenues totaled 346.5 million euros or $388 million, compared with 295.8 million euros, or $346 million, in the first half of 2015.

During a conference call with analysts, chairman and chief executive officer Remo Ruffini said he was “very proud of these outstanding results, above market average” in a “generally complex” scenario for the luxury goods sector. “These results flow from our clear strategy, increasingly strong brand perception and the valuable contribution of all the exceptional people working in our group. We still have six important months ahead, as we continue to pursue our strategy of high-quality, selective and controlled growth,” said Ruffini.

In particular, he highlighted the slashing of the group’s net debt and “the capacity to generate strong cash flow, the most important number to look at, the one I value more.”

Ruffini said Moncler’s “flagship program remains on track.” After a London opening, units in Seoul and New York will bow before the end of the year. “At least” nine stores will open in the second half of the year, he added. He also pointed to very good results with the spring 2017 collections and a “strong double-digit growth” of products that complement the brand’s core outerwear category.

“Although the macroeconomic and political environment remains uncertain and volatile, I believe the strategic projects that we are carrying out in the collections, the development of product categories that complement our core business, and our activities in the retail network and with our consumers, will all continue to strengthen our brand. I am therefore confident that our results will again increase in 2016,” concluded Ruffini.

In Asia and the Rest of the World area, revenues increased 30 percent to 134 million euros, or $150 million, showing a positive trend in line with the first quarter. In particular, mainland China and Japan recorded above-average growth, driven by the brand’s retail network. Chief operating officer Roberto Eggs noted that Japan is a “more mature market” for Moncler, but that the country now also relies on Chinese tourists and that the opening of a flagship in Ginza in October also helped boost business. Eggs pointed to Taiwan, Macao, Singapore and Hong Kong as all showing a good performance, as well as Korea, where Moncler opened a store in Seoul Incheon airport at the end of June, confirming the importance of the travel retail channel for the future development of the brand.

In the Americas, sales rose 23 percent to 52.5 million euros, or $58.8 million, representing 15.2 percent of the total due to solid growth in both the retail and wholesale channels. Andrea Tieghi, head of retail, said the company is working “on quality and good locations,” not the number of stores, citing the opening on Madison Avenue in New York; San Francisco; Washington, and the relocation of the store in Miami. “We look at the mix of wholesale and retail and we are quite satisfied, we are getting close to our [ideal] network in the U.S.,” said Tieghi.

Eggs said wholesale expansion in the U.S. is also strong with six shops-in-shops opening this year with the likes of Bergdorf Goodman, Saks Fifth Avenue and Neiman Marcus, among others.

In the Europe, Middle East and Africa region, sales rose 7 percent to 105.8 million euros, or $118.5 million, accounting for 30.5 percent of the total, lifted in particular by the U.K. and Germany. Eggs said that France was improving at the end of the second quarter and before the attacks in Nice, with “a very positive reaction from locals — in the first half the weight of locals increased.”

Eggs said the U.K. showed a “strong second quarter prior to Brexit and an acceleration after Brexit because of the currency devaluation, consolidating locals and seeing a strong double-digit growth of tourists, with an increase after Brexit.”

Tieghi said the company in 2017 plans to open new retail markets in Scandinavia, the Middle East and Australia.

Retail sales climbed 22 percent to 245.9 million euros, or $275.4 million, lifted by organic growth and the development of directly operated stores. Wholesale revenues rose 7 percent to 100.6 million euros, or $112.6 million,  supported by a good performance in the North American market.

At the end of June, Moncler had 179 directly operated stores, an increase of  six units compared with the end of December, and 36 wholesale shops-in-shops, an increase of two units.

Capital expenditure totaled 28.9 million euros, or $32.3 million, compared with 21.6 million euros, or $25.2 million, in the first half of 2015, mainly due to investments made in the retail channel, such as the opening of flagships in London, New York and Seoul. Free cash flow in the first half was positive and equal to 13.2 million euros, or $14.7 million, compared with a cash absorption of 15.1 million euros, or $17.6 million, in the same period of 2015. “This is the first time we have a positive free cash flow,” said Santel.

As of June 30, net debt stood at 84.9 million euros, or $95 million, compared with 175.3 million euros, or $196.3 million, at the end of June last year.

load comments
blog comments powered by Disqus