Moncler’s Earnings: Moncler’s Stock Declines by 6% Amid Slower Sales Growth in the Third Quarter

Narrow-moat Moncler MONC reported a sales slowdown during the third quarter, with revenue growth for the group at 7% from 26% during the second quarter and 23% during the first quarter. The slowdown was mainly due to a challenging year-on-year comparison and a decline in the wholesale channel’s performance, especially within the Americas region. During the earnings call, management also highlighted the presence of unusual warm weather in the September to October period. The market reacted negatively to the results, with a 6% decline at the time of writing. However, our model already considers normalization of growth for the year, so we don’t expect to make a material change to our fair value estimate of EUR 47.5. Shares remain in 2-star territory.

Moncler’s brand revenue growth during the third quarter decelerated to 9% at constant exchange rates, a significant slowdown from the 32% growth seen in the second quarter and the 28% achieved in the first. Meanwhile, Stone Island’s growth stagnated in the quarter and also slowed from its 5% average performance in the first half, primarily because of restrictions on volume in the wholesale channel.

The Americas region experienced the most significant impact, with revenues declining by negative 14% at constant exchange rates, in contrast to the negative 5% observed in the second quarter and the 9% growth recorded in the first quarter. This decline was mainly attributed to the transition of Nordstrom and a segment of Saks from a wholesale to a direct-to-consumer business model. That said, sales trends in Europe also decelerated, with 6% growth in the quarter, down from around 29.5% in the first half, caused by a normalization in local demand and a slower recovery of tourism flows compared with the first part of the year. Asia grew at a robust pace of 22% but also slowed from 55% and 32% in the second and first quarter, respectively, because of a lower comparable base affected by the lockdowns in mainland China.