Lanvin Group Holdings Ltd. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Brand Leadership: Reinforced brand leadership with key appointments, e.g., new Deputy CEO at Wolford, promotions at St. John.
• Retail Optimization: Rightsized 29 underperforming stores in first half, continuing review of retail network.
• Cost Control: Aggressively pushed G&A cost reduction measures; Wolford reduced brand-level G&A by 27%, Sergio Rossi by 25%, St. John by 35%.
• Marketing Initiatives: Deploying targeted marketing for new collections from Lanvin and Sergio Rossi in second half to boost traffic and conversion.

Segment Performance

• Lanvin: Revenue declined by 42% in the first half, primarily due to weak wholesale demand in EMEA ahead of Peter Copping's debut collection. However, D2C revenue grew by 46% quarter-over-quarter in the second quarter. Gross margin improved sequentially from 52% in Q1 to 57% in Q2.
• Wolford: Revenue was down 23%, with wholesale channel showing strong growth of 14% but D2C down 35% due to retail network rightsizing. Gross margin improved in Q2 from 49% to 65%. G&A expenses reduced by 18%.
• Sergio Rossi: Revenue fell 25% as customers awaited Paul Andrew's first collection, but Q2 saw a 17% retail sale and 10% e-commerce increase. Gross margin decreased by 9 percentage points.
• St. John: Revenue remained nearly flat, with core North American market (98% of revenue) growing 4%. Wholesale channel rose 11%, and gross margin was 69%.
• Caruso: Revenue declined 11% due to Maison business slowdown, but proprietary brand order intake grew. Gross margin was 29%, and contribution profit saw slight decrease.

Guidance

• Focus on driving cost efficiencies, marketing optimization, and brand enhancement.
• Continue implementing action plan to reduce costs and improve margins.
• Build brand story and desirability at Lanvin and Sergio Rossi with new creative leaders as catalyst for growth.

Risks

• Global macroeconomic and geopolitical uncertainty impacting performance.
• Creative transitions causing market softness and inventory sell-through issues.
• Residual effect of last year's logistic issues on Wolford's performance.
• Underutilization of production capacity and product mix changes affecting margins.

Question and Answer

Q: No questions A: No questions