Moncler reported Q1 results on Thursday, with the luxury outerwear company generating 365.5 million euros ($438.92 million) for the first three months of 2021, up by 21 percent compared to the same quarter last year. The Milan-based brand pointed to “strong contributions” from Asia – where sales were up by 53 percent as a whole and up by triple-digits on the Chinese mainland, in particular – and North America (up 34 percent), and “strong acceleration of e-commerce” as driving its growth for the quarter ending in late March, including a 22 percent boost to retail revenue to 279.2 million euros ($335.25 million) and a 17 percent rise in wholesale sales to 86.3 million euros ($103.64).
Reuters noted on Thursday that the company’s quarterly growth was just “a touch better” than the 19 percent that analysts expected, which is due, at least in part, to the brand’s reliance on the European market, where sales were particularly weak during Q1 in light of enduring COVID-19 lockdowns. Such high exposure in European means that Moncler had to “pay” in terms of overall growth for the quarter, which is “not overly surprising,” according to Bernstein analyst Luca Solca, who says that Moncler “is less globally developed than larger peers.” At the same time, he asserts that Moncler’s traditional Euro focus means that it still has plenty of room for growth.
The Remo Ruffini-run brand’s physical retail network, for instance, “still has ample opportunity to grow globally,” and at the same time, “its digital distribution” is in the midst of a revamp, with the company stating last year that it aims to double its share of online sales across the globe by 2023. In this vein, Moncler brought its e-commerce operations in-house in the U.S. and Canada in October 2020; it revealed that e-commerce in the Americas posting triple-digit growth for Q1. The brand is planning to internalize its Yoox Net-a-Porter-run online operations in Europe this year in furtherance of a larger effort to ensure that every project is “digital first.”
Solca says that Bernstein “remains confident on the brand momentum and its ability to produce strong organic growth going forward.”
And this momentum is being reflected across multiple metrics. For instance, Moncler landed in the number two spot of Brand Finance’s recent “strongest brands” ranking (following only behind Rolex), with the London-based brand valuation consultancy touting the “marketing investment and customer familiarity” with the Moncler brand, among other things. Meanwhile, in a recent review of brands’ pricing strategies, Bernstein asserted that Moncler has been at the forefront of recent price increases, alongside Louis Vuitton and co., “apparently masking the most of” the “strong momentum” that it has been experiencing over the past year.
In a call on Thursday, the group’s chief corporate officer Luciano Santel addressed the price hikes, stating that “Moncler only raises prices to protect margins from currency deterioration and plans an uptick in the second half, ‘not much in Europe,’ but in the United Kingdom because of duties to be paid, and versus the dollar and the yen,” as reported by WWD.
In a testament to the power of a company’s staple products, which routinely drive the bulk of sales, and the need to balance that with excitement-driving novelty offerings, Moncler revealed that “the vast majority of sales” – some 90 percent – “come from the core collections.” Meanwhile, its Genius collection – which sees the brand partner with designers like Craig Green and Valentino creative director Pierpaolo Piccioli, among others – represents less than 10 percent of total sales, but “acts as a perfect communication and traffic generating tool.” (“The foundations of fashion consumerism stem from the innate human desire for new things,” after all, as CNN aptly asserted, noting that this has only need for newness has only been intensified by “the rise of social media, online shopping and digital journalism”). Going forward, Moncler has a “continuous commitment to its Genius collections and other collaborations to attract customers in stores,” its management revealed on Thursday’s call
As for its acquisition of Stone island, which closed in late March, Moncler revealed that the Italian apparel brand enjoyed a “strong performance” for Q1, with its “brand identity, solid infrastructure and IT and logistics” expected to “further support its growth and integration in the future.” The Ravarino-headquartered brand is expected to expand in the U.S. and Asia under the watch of Moncler, with a focus on the brand’s direct-to-consumer “potential.” And in a nod to the fact that revenue reports are not just about the numbers, Moncler outlines its Environmental, Social, and Corporate Governance initiatives in its Q1 presentation, pointing to its contribution to a Milan-based COVID-19 vaccination site, which is expected to begin providing 10,000 doses per day beginning on April 25, and asserting that it aims to boost its use of renewable nylon, up from its current 5 percent use to 50 percent. It also cited its plans to introduce an initiative to “extend product life” by way of repairs, which is expected by 2022.
Reflecting on the “important” year ahead, Moncler chairman and CEO Remo Ruffini that Moncler is “working together on bold plans to develop the Group” (potentially a hint about future M&A?), and with a “zest for new projects.”
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