Moncler shares drop 7% as European tourism slowdown hits sales

Moncler's stock fell more than 7% after the luxury outerwear maker reported a slowdown in sales growth, highlighting its exposure to disruption in European tourism.

"Our priorities include strengthening the brand in regions with significant growth potential and renewing efforts to become an all-season brand," Chief Executive Officer Leo Rongone, a former Bottega Veneta executive, said on the earnings call.

Group revenue totaled €409.3 million in the April-to-June period, up 5% at constant exchange rates and slightly ahead of the €405.8 million analyst consensus. First-half operating profit rose to €245.4 million from €224.8 million a year earlier.

The results add to tentative signs of recovery in the luxury sector, though the second quarter is a relatively minor contributor for a company best known for winter puffer jackets. Rongone said innovation in materials would play a key role in broadening the brand's reach beyond its Alpine heritage.

Asia Leads, Europe Lags

Revenue at the Moncler brand rose 12% in Asia, with China and South Korea leading growth. In the Americas, where the brand is still building its presence, sales increased 4%. The European weakness reflects a broader slowdown in tourist spending that has hit luxury retailers across the region.

The stock decline puts Moncler at its lowest level in recent months, testing investor confidence in the company's strategy to evolve into an all-year-round brand. Investors will watch the third-quarter trading update for signs that the European tourism headwind is easing and that Rongone's expansion plan is gaining traction.

This article is for informational purposes only and does not constitute investment advice.