Maisons du Monde S.A. (MDM) Earnings Call Transcript & Summary

Thank you. Good evening, everyone, and thank you for joining us today for Maisons du Monde's third quarter 2025 results. Obviously, this quarter brings us some level of satisfaction as we post positive figures. Yet this comes on a very negative historical basis, of course. Sales reached EUR 224.7 million, up 4.9% and plus 5.9% on a like-for-like basis. This contrasts with a 9-month sales decline of 5.3%. If you look at performance by geography, we can see that growth was stronger outside of France, especially in Southern Europe, where we recorded double-digit increases. This partly reflects our choice to strengthen local adaptation with dedicated teams now in Italy and Spain allowing us to adapt faster and serve customers better. In France, growth was also positive, though more modest. As you know, the macroeconomic environment remains very fragile with political uncertainty still affecting consumer behavior. So while we're seeing progress, we clearly remain cautious for the coming months. What really is key to us is that we keep moving forward in our in-depth transformation throughout the company from its basement to its roof. Without covering all our strategic projects today, I would like to highlight a few key points. The Autumn-Winter 2025 Collection had a very strong start. That tells us two things. First, that our products resonates with customers, confirming that our design and collection choices are right. And second, that our operational execution is improving. For instance, we are able to launch this new collection earlier right at the beginning of July, leveraging the traditional flow of incoming customers during the seasonal sales period. We've also invested in better tools and processes to deliver the right product at the right time throughout the season. A major step has been the rollout of our AI-based replenishment tool across Europe, improving how we manage store inventory. We are, of course, still fine-tuning this new important tool. Better serving our customers remains our top priority. That's why we started to expand our services, including free in-store delivery for furniture items, a simple but powerful way to enhance the customer experience. We are also moving forward with our new store concept dedicated to leading shopping malls now open in Paris La Défense and Milan, building on the excellent results of our pilot stores in Montpellier and Nice, which continue to post double-digit growth month after month. This initiative is key as it also allows us to expose our brand and offer to a massive number of customers, notably younger customers. Last of all on that point, I want to share with you that we are now starting to leverage some key features of this successful concept to further enhance also the more traditional store format. Finally, the best evidence that we're on the right path is customer satisfaction. Our Net Promoter Score has indeed improved by 6 points versus last year. Of course, we're keeping a close eye not only on growth, but also on profitability. Our cost saving plan remains fully on track, and we're maintaining a strong focus on cost discipline to support the bottom line. As we move on to the next page, store network. That's, of course, a key pillar of our transformation and a strong driver of performance this quarter. Our affiliation model has now clearly proven its value. It's resilient and efficient to operate smaller stores, and it has been successfully implemented in France, as you know, and is starting in Spain. Encouraged by these results, we transferred two additional stores to this model during the quarter. At the same time, investing in our physical network continues to create tangible value. Our now 70 revamped stores demonstrate a more resilient performance compared to other locations, while also, of course, enhancing customer experience. This quarter, we also opened our first outlet store. This pilot allows us to offer a curated selection of past collections at reduced prices, helping us manage inventory while reaching new customers, thanks to its location in a high-traffic outlet-dedicated shopping center. Moving to the next slide. Of course, inspiring our customers is at the very heart of what we do. Our new Autumn-Winter 2025 Collection built around three key inspirations, warm ethnic, contemporary design and comforting classic, has been very well received, confirming that our products are appealing and our design and collection choices always speak to the heart of our customers. But we're not stopping there as we want to surprise and inspire our customers throughout the season by adding fresh creative touches on a regular basis. Thus, during this quarter, for instance, we launched two special collaborations that illustrate both our creative ambition and our commitment to sustainability. First, our collaboration with designer Christine Phung presented during Paris Design Week. Together, we created five exclusive pieces crafted from Maisons du Monde upcycled curtains, a true symbol of creative and responsible design. Second, a partnership with Michelin-starred chef Maurice Lacau. Maisons du Monde and Maurice Lacau have joined forces for an exclusive collection of tableware and everyday objects, blending culinary art and design in a way that truly embodies the Maisons du Monde spirit. Moving to the next slide. Of course, staying connected with our customers remains a top priority. That's exactly why precisely 1 year ago, we launched our Maisons du Monde loyalty program, and we are now seeing encouraging results. Indeed, the number of what we call our multi-timers customers who make several purchases per year at Maisons du Monde has grown across all customer profiles from our likers to our addicts. This clearly confirms the relevance and effectiveness of our loyalty program in deepening engagement and driving repeat business. At the same time, we've continued to refine our marketing strategy, working towards a more efficient balance between offline and online investments, aiming at strengthening our brand. In Q3, we focused on brand visibility, combining out-of-home campaigns, broad catalog distribution and targeted media activations, including a special campaign around our collaboration with Maurice Lacau using both TV and social media. And we are seeing the results in terms of traffic. Let's remind that brand awareness increased by 2.5 points in the first half of 2025, outperforming our main competitors during the same period. In Q3, we are observing a significant rebound in online organic traffic, up 1.5x in Q3 compared to last year. This growth is particularly valuable, not only because organic traffic is free of cost but also because it's one of the strongest indicators of brand strength and awareness. Now moving to the next slide and focusing on customer experience. During the quarter, we rolled out our new concept stores in Milan and Paris La Défense, both showing very promising early results. These stores embody what we want Maisons du Monde to be about, warm, inspiring and easier to shop. But beyond the store environment, product availability plays a crucial role in delivering a great experience because we all know that when it comes to a pleasure purchase, immediate availability can make all the difference, which is why we have now fully deployed our AI-based replenishment tool across Europe. This technology helps us optimize inventory allocation at store level, ensuring the right products are available in the right place at the right time. And finally, to further enhance convenience and leverage our omnichannel strengths, we started to introduce, as I said, free in-store delivery for furniture. And now I will hand over to Denis for more insight into the financial results.

Thank you, Francois-Melchior. Hello, everybody. Let's go into more details of the sales in this chart. So basically, what you can see that there is an improvement in all channels, which is a good news, but not at the same speed. On top of that, as mentioned by Francois-Melchior, we have a favorable comparison basis in last year because the Q3 last year was not so good, plus the fact that we have some store closure, remember that we had a huge revamping period at that moment last year. If you look at the figures, so the total -- the like-for-like sales is at plus 5.9% and the total sales are at plus 4.9%. We can see strong dynamics outside France, but France is quite better than what we have seen during the first semester. International is doing on retail plus 15% while France is doing plus 3.5%. So we can see this big dispersion comparing France and international. If you look at the non-like-for-like, remember that we are closing some boutiques. Some are transferred to affiliate but we are closing some boutiques. This is the impact. And we can see after the online. Regarding the online, important thing, the traffic is back. Remember that during Q1 mainly, but also all the first semester, we have suffered from a strong decrease of the traffic because of a too high decrease of the SEA expense, something that has been corrected during this quarter. So the traffic is back. And part of the traffic is SEO traffic. The increase -- we have a strong increase of, I would say, free traffic, but it is linked to all the marketing efforts we are putting outside the web, but this traffic is very important for us. And we have also within this online part, I would say, web MDM a little bit flat, and the increase is coming from the marketplace. This marketplace is the fact that there is more vendors, namely in Italy and Spain. It's important to have in mind that for online, we cannot see the same discrepancy that we see in retail. There is more homogeneous effect within the various countries where we are. If we go into more detail, so meaning the next slide, what we can see in a nutshell is that decoration is performing better than furniture, which is quite logical in view of the dynamism of the physical retail compared to online. I remember you that the online share of business for furniture is very high, not far from 80%. So that's logical to see this effect. You can see also that based on the mix and the dynamism of like-for-like in retail, the share of business of digital is a little bit declining, but it is clearly linked to the dynamics of the retail network. And we can see the increase of the share of international. As mentioned in the slide before, international is growing in this quarter far above France. But again, all the channels and all the markets are growing during this Q3. And now I hand over to Francois-Melchior again.

Thank you, Denis. Moving to the next slide. What are our key priorities for the last quarter. Our focus is very clear, offer inspiring products while performing strongly across both sales channels, in-store and online. When it comes to products, we remain loyal to our DNA, innovating and creating warm emotional collections for the festive season. Our festive Christmas collection invites customers to travel through 6 unique destinations from Mexico to Quebec to Paris. As with our Autumn-Winter 2025 Collection, we have anticipated the rollout to capture the full potential of this launch. All efforts will be made to drive growth across both channels. In stores, teams will be fully mobilized to deliver the best possible customer experience. Thanks to newly implemented flexible work schedules in France and a more performance-based incentive system, we want to ensure maximum team availability and strong motivation during this key period. At the same time, we are closely monitoring the launch of our new concept store in La Roche-sur-Yon in France, specifically designed for Zones d'Activité Commerciale locations and which builds upon all learnings of past remodelings both at ZAC and at shopping center level. It does also include some very new features and services that we will comment with you in a few months. On the digital front, we continue to pursue selective SEA strategy, leveraging learnings from earlier this year and capitalizing on the strong SEO traffic observed in recent months. We also continue to boost brand visibility through press, catalog and off-line activations. All this while maintaining, of course, financial discipline, even more so as the current political context in our domestic market remains very uncertain. Such financial discipline can be summed up as controlled promotional activity, close monitoring of expenses and reduction of inventory levels. And with that, we have finished our presentation, and we'll be ready to answer questions.

[Operator Instructions].

So there is a question about the current trading and the expectations for Q4 and beyond. So I will not comment on the top line growth. That seems to be expected from the consensus at plus 2% next year. What I can tell you is that we did expect beginning of October to be under pressure, and this is what we are observing, and we are making all efforts, and we are working on a slight positive figure for Q4 of this year. There is a question on the gross margin and the discount pressure. So [ Florent ], we have, of course, planned that the promotional pressure on the markets will remain strong. So this is really embedded in our forecast. We don't expect it to be more aggressive in Q4 than it has been in the past, but it's certainly taken into account in the way we monitor the company, given the fact that the market really has not been stepping down from the increase of promotional pressure of the last quarters and even year. So there is a question or maybe even a request about our plans to stimulate the performance of the stock and are we increasing our activity to show an investment case. So maybe Denis will complement that one. But on my part, what I will say is at the level of the stock we have now, I think what we really have to prove to the market is a succession of positive quarters and that will by very far be the best way to showcase MDM investment case and certainly the one that we fully prioritize on. I don't know, Denis, if you want to elaborate or complement that.