Moncler Spa Unsp/Adr

Good evening. This is the Corusco conference operator. Welcome and thank you for joining the Montclair nine-month 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, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Miss Elena Mariani, Strategic Planning and Investor Relations Director of Moncler. 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, I need to remind you that this presentation may contain certain statements that are needed 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 risks, 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 or 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. Let's now move directly to page three, where we briefly comment the group nine-month revenue development focusing on growth at constant effects. In the first nine months of the year, the group generated 1.87 billion euros of revenues, up 6% year-on-year, with Q3 at 636 million euros, down 3%. The Moncler brand was up 8% at constant effects in the first nine months and down 3% in Q3, which remains the largest wholesale quarter in the year, so the one with the channel mix mostly skewed towards wholesale. Stone Island revenues were down 5% at constant effects in the first nine months and down 4% in Q3, with a strong double-digit positive DTC and a negative wholesale channel, as our focus remains on elevating the quality of our distribution network. Now, moving to page four of the presentation, I would like to highlight some key Moncler brand initiatives launched during the course of the third quarter. First, the collaboration with Love From, which marked the first ever outdoor product creation by Sir Johnny Ive, the historical Apple designer. We're very proud to have worked with him, a true design legend, and the products have been extremely well received, particularly in the U.S., The collection included three very sophisticated shell jackets that connect to a central Moncler down jacket with the help of a magnetic button, the symbol of the collaboration, which you can see in the picture. Secondly, the launch of the fall-winter 2024 Moncler collection, accompanied by a very strong campaign shot in Paris. The products, the fabrics, the textures are bringing a clear sense of sophistication, capturing the essence of Moncler's wide range of timeless offerings. Moving on to page five, let's focus also on Moncler Grenoble as we always try to balance the three dimensions of the brand. As you might recall, Moncler Grenoble is now an all year round dimension. In fact, this year we launched our second pre-fall collection inspired by outdoor lifestyle, trekking and hiking activities. Finally, we launched the first eyewear collection for Fall Winter 24 under the exclusive licensing agreement with SLO Luxottica, which we had signed in November 2023. This partnership, as you might remember, encompasses the design, production and global distribution of Moncler eyewear. So this is the first of many future launches in partnership with them. Moving on to Stone Island on page six, let me highlight a couple of important initiatives launched in Q3. First, we unveiled the next chapter of the community as a form of research project, as distinctive members from the Stone Island global community were captured in archival icons and signature items from the New for Winter collection. In the new campaign, we featured personalities from the worlds of music, entertainment, sports, and art, including Liam Gallagher, Philip Stark, and even Peggy Gu, our first ever female ambassador. We're very happy about this campaign that has been enhancing the brand's visibility globally. Secondly, over summer, we introduced the New Stone Island website, fully aligned with the brand DNA and its philosophy. The site was entirely rebuilt to create a truly authentic Stone Island experience, And all the technical capabilities and operations were brought in-house. So all the aspects of our e-commerce business are now fully internalized in line with our ongoing efforts to take control of our distribution channels. Now, let's focus on revenues, starting with the Moncler brand on page seven, where we analyze the performance by region. The first consideration is that in all the three geographies, the DTC channel continued to outperform the wholesale channel. So this is true for Asia, India, and also America. Starting with Asia, that as you know, includes APAC, Korea, and Japan. Revenues in this region decreased by 2% in Q3 due to more challenging macro conditions affecting consumer confidence in the whole region, and also a normalization of tourist flows into Japan following the appreciation of the local currency. In EMEA, revenues were down 3% in Q3, mainly due to a decline in the wholesale channel. The DTC channel instead remained in positive territory, but it was impacted by a sequential deceleration in tourist inflows into the region and also by a weak direct online channel. And finally, the Americas region was down 6% in Q3, where the sequentially weaker performance compared to Q2 was entirely due to the wholesale channel, while DTC trends remained broadly aligned with what experienced in the previous quarter. So moving on to the revenues by channel on page 8, the DTC channel in Q3 was flat year-on-year, impacted by more difficult macro conditions that affected consumer confidence in several markets, but also impacted by a relatively weak performance of the direct online channel, which underperformed the physical retail channel in all regions. The wholesale channel instead was down 9% in the quarter, with America being the weakest region. Here revenues were impacted by challenging market trends in the wholesale channel, but also even more importantly by the ongoing efforts to upgrade the quality of our distribution network. I also wanted to stress that the guidance for the year in terms of development of the wholesale channel is unchanged. We continue to expect for the Moncler brand a decline of the wholesale channel in the region of high single digit, somewhere between minus eight and minus nine at constant effects. And as mentioned earlier, Q3 is still the most significant wholesale quarter in the year, so the quarter where the share of wholesale is the largest. However, if you look at the big picture and at the development of the channel mix for Montclair, you can notice that compared to last year, in the first nine months, we have gained further three percentage points in the mix in favor of DTC, and we expect the positive channel mix to continue. Now, moving on to Stone Island regional trends on page 9, you can see that Asia revenues grew by 17% in Q3, driven by a continued strong performance of Japan, boosted in particular by local consumption. When looking at Korea, trends improved compared to Q2, but remained relatively soft. And finally, China and the rest of APEC slowed down sequentially due to a more difficult macro backdrop. EMEA revenues were down 6% in the quarter, but this masked a very different performance of the two channels. DTC continued on a very solid double-digit growth trajectory, while the wholesale channel declined due to the actions taken to improve the quality of our distribution. And same for Americas, which saw a decline of 28% in Q3. The positive performance of DTC, which accelerated sequentially compared to Q2, was more than offset by the ongoing decline in the wholesale channel. Looking at trends by channel on page 10, you can see more clearly the different development of wholesale versus DTC. In Q3, DTC was up 28% for stone, with revenues up double digits in all regions, with Asia outperforming in particular. Wholesale instead was down 19% in the quarter, negative in all regions and impacted both by the still difficult market trends in this channel, but also even more importantly, by the very strict volume control, which we adopt to continuously improve the quality of the network. Also for Stone Island, the guidance for the year in terms of development of this channel is unchanged. We continue to expect a high team's decline in wholesale revenues for fiscal year 24, just a touch less than minus 20% at constant effects. And let me take one second to highlight also for Stone Island the ongoing evolution of the channel NIC. with BTC now accounting for 46% of revenues, gaining more than 10 percentage points compared to the first nine months of last year. Finally, let's briefly examine our store network on page 11. At the end of September, the Moncler DOS store network reached 285 units, a net increase of 8 units compared to the end of June, including the opening of Suzhou Metro and Huan Shinkan Place in China, as well as the relocation of our Royal Hawaiian Store in Honolulu. And for these last two, you can see some beautiful pictures on page 12 and 13. The Sun Island Network instead counts 91 stores, and this quarter we would highlight in particular the opening of the Shanghai Taikulin Kiantan store, for which you can see some pictures on page 14. I'm going to stop here now and I will hand over to the operator for your questions. As usual, I kindly ask you to stick to a maximum of two questions per person. Operator, feel free to open the line. Thank you.

Thank you. This is the Corusco 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 social 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. The first question is from Melania Grippo, BMP Paribas. Please go ahead.