Lanvin Group Holdings Ltd. Q4 FY2023 earnings call

• Achieved revenue growth of 1% in 2023 despite macroeconomic headwinds, with gross profit increasing to €251 million and margin improving to 59%. - Lanvin brand improved growth trend in the second half of 2023 through targeted product and marketing campaigns. - Wolford completed restructuring efforts, showing improved profitability despite market challenges. - St. John saw DTC revenue growth, launched foundation collection, and updated e-commerce platform. - Sergio Rossi experienced growth in North America and APAC, with e-commerce and like-for-like sales increases. - Caruso achieved adjusted EBITDA breakeven in 2023. - Established a fabric center with strategic partner, launched U.S. digital platform, reacquired Lanvin's Japan license and trademarks, and planned new Middle East boutiques.

Lanvin Group: In 2023, revenue was €426 million, a 1% increase from €422 million in 2022. Gross profit was €251 million with a margin of 59% (up from 56% in 2022). Lanvin brand: Saw growth in the second half of 2023, with revenue decrease of 7% for the year but improvement from 11% decrease in the first half of 2022. Wolford: Achieved over €10 million improvement in profitability, 1% same-store sales growth, 11% wholesale revenue growth, 32% growth in APAC, retail faced -3% decline but had new openings and W.O.W. Leggings with 137% growth. St. John: DTC revenue growth, foundation collection grew to 23% of business, 10 top stylists sold over 1M each, opened 4 new boutiques, e-commerce updating to Shopify. Sergio Rossi: Revenue €60 million (-4%), DTC growth, 70% growth in North America, e-commerce +5%, like-for-like +6%. Caruso: Men's sportswear revenue +30% to €40 million, adjusted EBITDA breakeven in 2023.

• Expect continued macroeconomic challenges in 2024 but confident in growth and profitability. - Aim for two additional brands to achieve adjusted EBITDA breakeven in 2024. - Focus on expanding retail footprint and digital strategy, including further development in the Middle East and APAC. - Capitalize on operating leverage built to amplify profitability.

• Macroeconomic headwinds persisting in 2024. - Challenges in the wholesale channel industry-wide. - Adverse weather conditions affecting sales, particularly for Wolford. - Geopolitical tensions and inflationary pressures impacting operations.

Q: Could you give a sense of how your business has trended year to date and talk about that regionally?

A: Business saw softness in Q1 2024, with brands re-shifting strategies to attract certain audiences. Lanvin Lab has been performing well with different drops providing revenue and cultural affinity.

Q: My follow-up is on CapEx. It was up significantly this year. What were the drivers and what are you targeting for CapEx in 2024?

A: CapEx drivers included store openings and rationalization efforts. Targeting CapEx to be at a single digit percentage of sales, with continued rationalization and focus on Wolford's leisure wear and legging initiatives.

Q: Could you discuss margin trends and key initiatives underway to get to group-wide breakeven on EBITDA margin?

A: Aiming for cash breakeven at group level by 2025. Key initiatives include focusing on accessory and leather goods business for higher margins, being selective with wholesale partners, and focusing on D2C model. Also rationalizing costs while building revenue and changing product/channel mix.