A general exterior view of the Moncler luxury fashion label store in Sloane Street, Knightsbridge on February 17, 2025 in London, United Kingdom.
John Keeble Getty Images News | getty images
Moncler Stocks struggled on Wednesday despite better-than-expected quarterly results on Tuesday.
The earnings decline followed a series of disappointing reports from European luxury players last week.
lvhm, KeringAnd hermes Investors were disappointed by the earnings decline last week, which was in its seventh straight week due to slowing sales amid the conflict in the Middle East.
But Moncler saw less impact from the Iran war and solid performance in Asia. This indicated that the momentum had started to fade in March. Shares fell as much as 3% in morning trading, but later pared losses to less than 1% by 8.56 a.m. London time (3.56 a.m. ET).
Performance of luxury stocks over the last 12 months.
Bernstein analyst Luca Solca said the company “broke” expectations in the quarter, but he added that the “seasonal lull” coming after a positive surprise could prompt investors to take profits on a rise in the share price.
Many luxury players have seen their business impacted over the past few years as demand surged during COVID-19, leading to price hikes and customer alienation. Consumer demand from China – previously one of the region’s main growth drivers – has also been weak.
Moncler’s first-quarter group sales came in at 881 million euros ($1.04 billion) at constant currencies, while analysts polled by FactSet had expected 827 million euros.
Sales in Asia, about half of group sales, rose 22% year-on-year, while those in the Americas rose 7% in the quarter.
Jefferies analysts saw “remarkable strength” of double-digit growth in China as they raised their price target on the stock to 60 euros from 54 euros.
However, EMEA sales declined 1% from a year earlier, “punished by relatively low tourism trends in the region and weak online performance,” Moncler said.
The €16 billion market cap company, known for its high-end outerwear, is engaged in a campaign to expand the brand beyond its winter heritage to all-season luxury apparel.
“Wonder how much of this (China sales) was driven by Moncler’s ‘100 days of activism,'” said Barclays analyst Carol Madjo.
Chinese consumers responded strongly to several brand activations tied to the events in Aspen and the Winter Olympics this quarter, Madjo said, adding: “This led to a significant improvement in the mix, as Chinese consumers reached for the heavier jackets in the Edit and Grenoble collections.”
“Whether consumers will continue to take Moncler into consideration during the warmer months remains the brand’s main doubt.”
