Canada Goose and Moncler, the key strategy is to strengthen the brands

The luxury sector is in the spotlight more than ever, and not only at fashion shows. Any signal coming from China has a direct impact on stock prices (on the other hand, Chinese consumers generate 30% of luxury revenues), and there is no shortage of mega-deals such as the announced sale of Ynap by Richemont to Mytheresa in exchange for 33% of the share capital. In all this tourbillon, how are Canada Goose and Moncler, both specialising in luxury garments for the coming winter season, doing in all this?

The Canadian group (which closes its financial years on 31 March each year) in the first quarter of 2024/2025 (April - June 2024, obviously low seasonality) saw revenues rise by 3.9% to Can$88.1 million, but the high incidence of operating costs resulted in negative, albeit improving, profit margins. The operating loss fell 2.8% to 96.9 million and the net loss fell 4.6% to 77.4 million (Canada Goose has tax benefits from prior losses). On an adjusted basis, however, the operating loss rose 5.4% to 96 million and the net loss rose 4.1% to 76.1 million. Moncler, for its part, saw revenues grow 8.2% to 1.230.2 million (+11% at constant exchange rates), and even more pronounced was the increase in margins: ebit rose 18.8% to 258.7 million (ebit margin rose from 19.2% to 21%) and net profit by 24.3% to 180.7 million, thanks to a strong reduction in net financial charges, which fell from 11.3 to 1.6 million thanks to higher financial income driven by higher interest rates. It is worth mentioning that Moncler had net cash of EUR 845.8m at 30 June 2024 after the payment of a dividend of EUR 303.1m.

For the full financial year 2024/2025, Canada Goose has indicated a 'low-single digit' revenue increase, driven by the Dtc channel (while Wholesale sales are expected to fall by 20%), an adjusted ebit up 100 basis points compared to the previous year, and an adjusted net profit growth of around 15%. The opening of three new mono-brand shops and four 'shop-in-shops' at as many shopping centres is planned. Moncler, on the other hand, did not provide numerical guidance for the 2024 financial year, emphasising the volatility of the reference sector; it did, however, confirm its intention to continue to invest in strengthening the Moncler Collection, Moncler Grenoble and Moncler Genius brands with targeted marketing initiatives, and in the Dtc channel, both physical and digital, for the Stone Island brand, while the wholesale channel will be the subject of a very selective strategy.