Remo Ruffini

MILAN — Moncler SpA, reporting first half results on Wednesday, marked “the 14th consecutive quarter of double-digit growth” for the company since it was listed in 2013, the group’s chairman and chief executive officer Remo Ruffini said.

In the six months ended June 30, net profit climbed 25 percent to 41.8 million euros, compared with 33.6 million euros in the same period last year.

Sales rose 18 percent to 407.6 million euros, compared to 346.5 million euros in the first half of 2016.

“Group revenues grew by a further 20 percent in the second quarter of 2017, driven by positive contributions from all regions and channels. This has been achieved thanks to the solidity and strength of our brand, while preserving the sustainability of our growth,” Ruffini said. “To be able to develop so consistently reflects not only Moncler’s uniqueness and the valuable work undertaken by everyone here, but also our ability to continuously reinvent ourselves, to look ahead and make key decisions — sometimes boldly — that bear fruit over time.”

During a conference call with analysts, Ruffini said “2017 began in a very positive way, ahead of my personal expectations.” Defining these as “impressive numbers,” and admitting that the months ahead will face tougher year-ago comparisons, he said he was “proud of what has been achieved so far.” The executive emphasized the company’s “new retail culture” and that, including the renovation of the Milan flagship in Via Montenapoleone in the fall, the stores “strongly support the brand perception.”

In the six months, adjusted earnings before interest, taxes, depreciation and amortization grew 24 percent to 97 million euros, with a margin of 23.8 percent.

Adjusted operating profit was up 24 percent to 73.3 million euros.

In Italy, revenues rose 7 percent to 58.2 million euros, driven by good results in all distribution channels. In particular, the retail channel has benefited from solid organic growth, further accelerating in the second quarter.

In the Europe, Middle East and Africa region, Moncler’s sales grew 20 percent to 127.4 million euros. The company cited “particularly strong” growth in the U.K. and France. During the call, Roberto Eggs, chief marketing and operating officer, noted that the performance in Italy and Europe increasingly depended on tourists, around 60 percent of customers, mostly Asians, Japanese, Russians and Chinese.

In Asia and the rest of the world, revenues increased 19 percent to 159.6 million euros, representing 39.1 percent of the total. In Japan, both distribution channels continued to record double-digit growth, driven by the very good performance of the spring collections and Moncler’s strong brand perception in the market, noted the company. Moncler’s board of directors  approved on Wednesday the extension of the Moncler Japan Corp. joint-venture agreement for an additional five years until Dec. 31, 2023.

In the Asia-Pacific region, Moncler’s performance was “largely supported by a good organic growth across the main markets, particularly in the second quarter of the year,” said the company, pointing to outstanding results in South Korea. Eggs said that Moncler has been an exception, compared to its competitors, as it has always been growing in Hong Kong. Asked about Mainland China, this has also “progressed positively.”

In the Americas, revenues grew 19 percent to 62.4 million euros, accounting for 15.3 percent of the total. Asked for a comment on American department stores, Eggs said “the situation is very volatile, we are following it cautiously but so far so good. The way we see our business, we still have ways to improve visibility on different floors. We have experienced a positive course in the U.S.”

In the six months, revenues from the retail channel climbed 22 percent to 299.5 million euros thanks to solid organic growth and the continued development of the network of directly operated stores. In the period, comparable store sales grew 14 percent.

As of June 30, the company counted 191 retail directly operated stores, an increase of one unit compared to the end of December last year, and 46 wholesale shops-in-shop, an increase of four units compared to the end of December. In the second quarter, Moncler opened one shop-in-shop. More than 10 shop-in-shops will open in the second half in new countries for the company, such as New Zealand and Guam. Three points of sale will open at the airports of Paris, Munich and Taipei.

The wholesale channel was up 8 percent to 108.1 million euros, driven by good results in the U.K., Japan and Canada.

Eggs said the company will have opened a total of 14 stores by the end of the year, with the majority slated between September and December. These include the opening of a flagship in Moscow at Gum,  men’s and women’s stores at La Rinascente in the new unit to be unveiled in Rome, a store in Florence and the entrance into new markets with the first stores in Almaty, Stockholm and Dubai. The company’s first directly operated store in a department store in the U.S will open in San Francisco at Bloomingdale’s. By the end of the year, a second banner will open in Toronto and one in Busan, Korea.

Eggs cited the performance following the relocation in July of a flagship in Canton Road in Hong Kong, the largest in Asia, as “encouraging.” The biggest store in the world will stand in Milan’s Via Montenapoleone after the addition of two floors to the existing unit this fall. Also in Milan, the company will transform the Via Spiga unit into the first directly operated store carrying the brand’s children’s wear. In 2018, the number of new stores is expected to range between 14 and 15  and that of new shop-in-shops between 10 and 12.

Luciano Santel, chief corporate and supply officer, also mentioned the Via Montenapoleone store, highlighting the “breathtaking, amazing design,” which will end up being “more expensive than planned,” as the capital expenditure by the end of the year is expected to be closer to 70 million euros rather than the forecast 65 million euros. In the first six months of the year, capital expenditure totaled  34.4 million euros, compared to 28.9 million euros in the same period of 2016, mainly due to investments in the retail network and relocations and expansions.

Advertising expenses totaled  29.9 million euros, representing 7.3 percent of revenues compared to 7.2 percent in the first half of 2016.

As of June 30, net cash totaled 130.2 million euros, compared to 105.8 million euros at the end of December.

Asked about e-commerce, Eggs said it was “stronger” and that the company is merging the retail and digital databases, with the implementation of omnichannel. “By the end of the year, we will offer click and collect.” In the second half of 2018, “it will be complete omnichannel.” He underscored the increased interaction between customers and Moncler.

Asked once again about other categories, Santel was upbeat about the performance of knitwear and shoes.

Regarding potential price adjustments in light of the depreciation of the U.S. dollar or the yen, while admitting this was “an element of concern,” Santel said there would be no changes in the second half.

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