Moncler in the spotlight: quarterly results hold up despite the challenging environment
In Paris, however, Hermès has taken a hit following a quarter in which turnover fell short of analysts’ expectations
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(Il Sole 24 Ore Radiocor) - Strong resilience in a challenging environment is encouraging buying in Moncler, following the quarterly results released yesterday after markets closed, in which the strong sales performance in China during Golden Week did not go unnoticed. It was a completely different story for Hermès, which opened in Paris with an 8 per cent plunge, following a quarter in which turnover fell short of analysts’ expectations.
Moncler also experienced a challenging quarter, with revenue remaining stable (€605.5 million) but exceeding analysts’ estimates, which stood at €595.1 million, according to Visible Alpha. “The slowdown in the third quarter confirms that the brand is not immune to market weakness,” say analysts at Intermonte, whilst emphasising, however, that the three-month period was influenced partly by unusually mild temperatures and partly by lower numbers of Asian tourists visiting Europe. “As demonstrated by Golden Week,” they continue, “the brand remains very strong amongst Chinese customers and is gaining ground in the United States. Taking into account the positive signs from Stone Island as well, we are revising our estimates downwards but confirm our positive outlook, anticipating a strong recovery in the fourth quarter”. The rating therefore remains ‘outperform’ with the target price reduced from 66.1 to 58.2 euros.
Morgan Stanley has also lowered its target price to 47 euros from 50, but is focusing on expectations for the fourth quarter, the real litmus test for the winter season: “The focus remains on the fourth quarter, given its particularly significant weighting in annual turnover and profits,” say the analysts. Equita takes a similar line, confirming its ‘buy’ rating but revising its estimates downwards, with the target price reduced to €58 from €63. “The indications from the earnings call confirm some potential for sequential improvement in the final quarter” but, in light of the sector-wide context, they are lowering their forecasts. Moncler is therefore not immune to the sector-wide context but “is trading at a 2027 price-to-earnings ratio (excluding cash) of 15 times (compared with peers at around 20 times), which is excessively penalised given the consistent outperformance within the Chinese cluster, the various company-specific growth drivers (Grenoble, the US market, Spring/Summer collections, Stone Island), and margins well above those of its peers”, they conclude.
And returning to Hermès, it is precisely the weakness in the Chinese market that is weighing on the share price : the group recorded turnover of around 4.1 billion euros for the period, up 5.5 per cent year-on-year, thanks mainly to the saddlery and leather goods division. “Hermès continues to be affected by an overall difficult business environment,” noted analysts at Bernstein.
Investors are paying particular attention to sales trends in China, a market that has long been a mainstay of the luxury sector but which has been experiencing a slowdown for the past two years. In the third quarter, Hermès recorded a decline in sales in this very country. In Paris, the entire luxury sector is feeling the impact of the group’s results, from LVMH – which, although had disappointed the markets a week earlier – to Kering.
