Moncler Spa Unsp/Adr

Welcome and thank you for joining the Montclair Group First Quarter 2024 Interim Management Statement Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, then we signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Elena Mariani, Group Strategic Planning and Investor Relations Director. Please go ahead, Madam.

Thank you, Operator, and thank you all for joining our call today. The Interim Management Statement Call is hosted by Luciano Santo, Chief Corporate and Supply Officer, and by myself. I will start providing a brief overview of our results, and then Luciano and I will be happy to take your questions. Before starting, though, I need to remind you that this presentation may contain certain statements that are neither reported financial results nor other historical information. Any forward-looking statements are based on group current expectations and projections about future events. By their nature, forward-looking statements are subject to risk uncertainties and other factors that could cause results to differ even materially from those expressed in or implied by these statements, many of which are beyond the ability of the group to control and estimate. Let me also highlight that given the nature of our business, interim results can be influenced by seasonal effects and therefore cannot be taken as a proxy for full-year trends or results. Finally, I remind you that the press has been invited to participate to this conference in a listen-only mode. Now, starting on page three of the presentation, I'm delighted to announce that as a group, we achieved revenues of €880 million, up 16% at constant effects, with a particularly strong double-digit contribution from our core BTC channel, both at Moncler and at Sun Island. Moving to page four, let me say that there is no better way to start our brand section than commenting our unique Moncler Grenoble experience. In February, Montclair unveiled its Grenoble Fall-Winter 2024 collection during an unforgettable two-day brand experience in St. Moritz, which brought people from all around the world into the Grenoble universe, bringing together high style and high performance. This included among various events a ski experience with global athletes, such as Sean White or Perrine Lafond, as well as a very emotional show in the forest attended by several celebrities. I'm sure you probably caught a glimpse of this on social media, but the event had a very strong media impact and has been instrumental in further authenticating this distinctive brand dimension, which is the closest one to our Moncler DNA. But it wasn't just about St. Moritz. Still talking about Grenoble, if you move to page five, you can see that in Q1, we continued our all-year-round journey, launching our second spring-summer Montclair Grenoble collection on the back of the successful introduction last year, together with a new season of our trail grip with a very powerful and catchy campaign, which you can see among the pictures. Talking about Moncler Genius, we launched a collection in partnership with Rock Nation by Jay-Z, representing Moncler's first-ever TV advertising in the U.S. during an NBA game. The strong narrative around genius is everywhere had a strong reach globally, allowing us to connect to new and wider communities. Finally, when it comes to our main collection, I just wanted to flag in particular the strong plan behind the launch of the men's spring-summer 2024 collection with a very powerful campaign featuring actor Joaquin Forel, which has been extremely well received globally. Moving to page six, let's talk about Stone Island brand initiatives. First, let me highlight that during a signature event on January 12th, the first day of Milan Men's Fashion Week, Stone unveiled its new brand manifesto, The Compass Inside. You might remember the video we presented during our fiscal year 2023 results presentation. This was a very important moment for the brand, given that it marked the opening of our new brand and communication chapter. And just after these events, we launched a new, very powerful global advertising campaign for the first time featuring members of Sun Island's cultural community wearing emblematic pieces from the Spring Summer 2024 collection. Finally, I just would like to highlight that Stone inaugurated its first ever major U.S. archival exhibition in Los Angeles, coinciding with Freeze LA, bringing to the U.S. rare and previously unexhibited pieces from the amazing Stone Island Archive. Talking about numbers, let's move to page seven, where we're going to start with the Moncler brand. We're happy to say that in the first quarter of the year, the brand grew by 20% at constant currencies. And looking first at the performance by region, Asia was up 26% in Q1, driven by very strong growth in the Chinese mainland, despite, I have to say, a very challenging comparable base and also a further increase in Chinese consumption outside of the mainland. Both Japan and Korea also continue to deliver a very solid performance, with Japan obviously supported by the significant tourist flows into the country. India was up 15%, accelerating sequentially compared to Q4, and this was supported by a further improvement in tourist purchases, but also by solid consumption among local European customers. Q1 revenues in Americas were up 14%, improving compared to the previous quarter, and boosted by a strong performance in the DTC channel, which more than compensated the decline in wholesale. Looking at mutual revenues by channel on page 8, we are delighted to say that in Q1, the DTC channel recorded an extraordinary performance, up 26%. improving sequentially both in the physical and in the digital channel. All regions recorded very good double digit growth in DTC, with both INEA and Americas improving compared to the previous quarter. Wholesale revenues were down 5% in line with management expectations due to the ongoing conversions as well as to the progressive efforts to upgrade the quality of the network. Let me take this chance to reiterate that we expect this channel for Montclair to remain negative through the course of the year, and we still expect to end 2024 with wholesale revenues down approximately high single digits. Moving now to Sun Island on page 9. Revenues for the brand were down 5% at constant currencies, with a strong double-digit growth registered in the DTC channel, partially compensating for the decline in the wholesale channel, which is still the most important channel for the brand. Looking at trends by region, Asia grew 27%, mainly driven by the very strong performance of Japan. Trends in Korea improved sequentially compared to Q4, although they remained softer than other parts of Asia. The performance of the Chinese mainland after the initialization of the market was impacted by the ongoing restructuring of the distribution network, which, as you might remember, was started at the end of December 2023. EMEA revenues were down 12%. The DTC channel saw a very solid double-digit performance, but this was not enough to offset the decline in the wholesale channels. And finally, the Americas region saw a decline of 25% in the quarter, mainly due to the challenging trends in the Joseau Channel, but also to the ongoing efforts in upgrading the quality of this channel. Looking more specifically at Stone Island trends by channel on page 10, The DTC channel performed particularly well and grew by a very solid 31% in Q1, improving sequentially in all three regions with a particularly solid performance in Asia and India. Wholesale revenues instead were down 23% as planned. For Stone, this is the largest quarter in the year for this channel, and it was impacted both by the challenging wholesale market trends but also by the very strict volume control we continue to adopt in the management of this channel. In fact, as you can see from the pie chart, the share of revenues from the wholesale channel continues to shrink, now representing 56% of the brand's Q1 revenues compared to almost 70% in Q1 last year. As a reminder, we expect stone revenues in the wholesale channel to continue to decline and to be around approximately high teams in fiscal year 2024, a bit more negative in the first part of the year compared to the second part of the year. Last but not least, let's briefly examine our store network on page 11. At the end of March, Moncler retail stores reached 275 units, while Stone Island stores were 83. Over the course of Q1, Moncler saw three net store openings, while Stone saw two net store openings. And finally, as usual, on page 12 and 13, we have two wonderful examples of recent STO network initiatives. For Montclair, we have highlighted the opening of Nanjing IFC in China. And for Stone, we have the relocation of Hankyu Men's in Tokyo. We reached the end of the presentation, so I will now hand it over to the operator for your questions. I kindly ask you to stick to a maximum of two questions per person to give all participants the opportunity to ask something. Operator, you can now open the Q&A session. Thank you.

Thank you. This is the Coruscall conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. We will pause for a moment as participants are joining the queue. The first question is from Edward Owen with Morgan Stanley. Please go ahead.