Moncler S.p.A. (MONC) Earnings Call Transcript & Summary

Good evening. This is the Chorus Call conference operator. Welcome, and thank you for joining the Moncler Group First Quarter 2024 Interim Management Statement Conference Call. [Operator Instructions]. At this time, I would like to turn the conference over to Ms. Elena Mariani, Group Strategic Planning and Investor Relations Director. Please go ahead, madam.

Thank you, operator, and thank you all for joining our call today. The interim management statement call is hosted by Luciano Santel, Chief Corporate and Supply Officer; and by myself. I will start providing a brief overview of our results and then Luciano and I will be happy to take your questions. Before starting, though, I need to remind you that this presentation may contain certain statements that are neither reported financial results nor other historical information. Any forward-looking statements are based on group's current expectations and projections about future events. By their nature, forward-looking statements are subject to risks, uncertainties and other factors that could cause results to differ even materially from those expressed in or implied by these statements, many of which are beyond the ability of the group to control and estimate. Let me also highlight that given the nature of our business, interim results can be influenced by seasonal effects and therefore, cannot be taken as a proxy for full year trends or results. Finally, I remind you that the press has been invited to participate to this conference in a listen-only mode. Now starting from Page 3 of the presentation, I'm delighted to announce that as a group, we achieved revenues of EUR 818 million, up 16% at constant FX, with a particularly strong double-digit contribution from our core DTC channel, both at Moncler and at Stone Island. Moving to Page 4. I let me say that there is no better way to start our brands section than commenting on our unique Moncler Grenoble experience. In February, Moncler unveiled its Grenoble full winter 2024 collection during an unforgettable 2-day brand experience in St. Moritz which brought people from all around the world into the Grenoble universe, bringing together high style and high performance. This included, among various events, a ski experience with global athletes such as Shaun White or Perrine Laffont as well as a very emotional show in the forest attended by several celebrities. I'm sure you probably caught a glimpse of this on social media, but the event had a very strong media impact and has been instrumental in further authenticating this distinctive brand dimension which is the closest one to our Moncler DNA. But it wasn't just about St. Moritz, still talking about Grenoble. If you move to Page 5, you can see that in Q1, we continued our all year around journey, launching our second spring summer Moncler Grenoble collection on the back of the successful introduction last year. Together with the new season of our Trailgrip with a very powerful and catchy campaign, which you can see among the pictures. Talking about Moncler Genius, we launched a collection in partnership with Roc Nation by Jay-Z, representing Moncler's first ever TV advertising in the U.S. during an NBA game. The strong narrative around Genius is everywhere, had a strong reach globally, allowing us to connect to new and wider communities. Finally, when it comes to our main collection, I just wanted to flag in particular, the strong plan behind the launch of the Men's spring/summer 2024 Collection with a very powerful campaign featuring actor Joaquin Furriel, which has been extremely well received globally. Moving to Page 6. Let's talk about Stone Island brand initiatives. First, let me highlight that during a signature event on January 12, the first day of Milan Men's Fashion Week, Stone unveiled its new brand manifesto, The Compass Inside. You might remember the video we presented during our fiscal year 2023 results presentation. This was a very important moment for the brand given that it marked the opening of our new brand and communication chapter. And just after this event, we launched a new -- very powerful global advertising campaign for the first time featuring members of Stone Island's cultural community wearing emblematic pieces from the spring/summer 2024 collection. Finally, I just would like to highlight that Stone inaugurated its first ever major U.S. archival exhibition in Los Angeles, coinciding with Frieze L.A., bringing to the U.S. rare and previously unexhibited pieces from the amazing Stone Island archive. Talking about numbers. Let's move to Page 7, where we're going to start with the Moncler brand. We're happy to say that in the first quarter of the year, the brand grew by 20% at constant currencies and looking first at the performance by region, Asia was up 26% in Q1, driven by very strong growth in the Chinese Mainland despite, I have to say, a very challenging comparable base and also a further increase in Chinese consumption outside of the Mainland. Both Japan and Korea also continued to deliver a very solid performance with Japan obviously supported by the significant tourist flows into the country. EMEA was up 15%, accelerating sequentially compared to Q4, and this was supported by a further improvement in tourist purchases, but also by solid consumption among local European customers. Q1 revenues in Americas were up 14%, improving compared to the previous quarter and boosted by a strong performance in the DTC channel, which more than compensated the decline in wholesale. Looking at Moncler revenues by channel on Page 8. We are delighted to say that in Q1, the DTC channel recorded an extraordinary performance, up 26%, improving sequentially, both in the physical and in the digital channel. All regions recorded very good double-digit growth in DTC with both EMEA and Americas improving compared to the previous quarter. Wholesale revenues were down 5%, in line with management expectations due to the ongoing conversions as well as to the progressive efforts to upgrade the quality of the network. Let me take this chance to reiterate that we expect this channel for Moncler to remain negative through the course of the year, and we still expect to end 2024 with wholesale revenues down approximately high single digit. Moving now to Stone Island on Page 9. Revenues for the brand were down 5% at constant currencies with a strong double-digit growth registered in the DTC channel, partially compensating for the decline in the wholesale channel, which is still the most important channel for the brand. Looking at trends by region. Asia grew 27%, mainly driven by the very strong performance of Japan. Trends in Korea improved sequentially compared to Q4, although they remain softer than other parts of Asia. The performance of the Chinese mainland after the internalization of the market was impacted by the ongoing restructuring of the distribution network, which, as you might remember, was started at the end of December 2023. EMEA revenues were down 12%. The DTC channel saw a very solid double-digit performance, but this was not enough to offset the decline in the wholesale channel. And finally, Americas. The Americas region saw a decline of 25% in the quarter, mainly due to the challenging trends in the wholesale channel, but also to the ongoing efforts in upgrading the quality of this channel. Looking more specifically at Stone Island trends by channel on Page 10. The DTC channel performed particularly well and grew by a very solid 31% in Q1, improving sequentially in all 3 regions with a particularly solid performance in Asia and EMEA. Wholesale revenues instead were down 23% as planned. For Stone, this is the largest quarter in the year for this channel, and it was impacted both by the challenging wholesale market trends, but also by the very strict volume control we continued to adopt in the management of this channel. In fact, as you can see from the pie chart, the share of revenues from the wholesale channel continues to shrink, now representing 56% of the brand's Q1 revenues compared to almost 70% in Q1 last year. As a reminder, we expect the Stone revenues in the wholesale channel to continue to decline and to be down approximately high teens in fiscal year 2024, a bit more negative in the first part of the year compared to the second part of the year. Last but not least, let's briefly examine our store network on Page 11. At the end of March, Moncler retail stores reached 275 units, while Stone Island stores were 83. Over the course of Q1, Moncler saw 3 net store openings, while Stone saw 2 net store openings. And finally, as usual, on Page 12 and 13, we have two wonderful examples of recent store network initiatives. For Moncler, we have highlighted the opening of Nanjing IFC in China. And for Stone, we have the relocation of Hankyu Men's in Tokyo. We have reached the end of the presentation. So I will now hand it over to the operator for your questions. I kindly ask you to stick to a maximum of two questions per person, to give all participants the opportunity to ask something. Operator, you can now open the Q&A session. Thank you.

[Operator Instructions]. The first question is from Edouard Aubin with Morgan Stanley.

Yes. Good evening, Elena and Luciano. So two questions. So your performance was very broad-based at Moncler, but particularly impressive in Asia. So when we step back, why is the appeal so strong of the brand in markets like China and Korea, and is the growth driven by kind of repeat purchase versus or recruitment or both? That would be question number one. And then question number two, maybe a bit tricky, but if we look at your very strong performance in Q1 at Moncler retail of 26%. The comp base gets easier in the remaining 9 months of the year. So should we expect the momentum to continue at this type of growth for the remainder of the year?

Okay. First question about Asia. And in Asia, I mean, as we reported, did very well in China, but not only because something important to highlight is that all the different markets in Asia performed very well, Chinese Mainland, but also the countries close by China, like Hong Kong, Macau, Taiwan and Japan. Japan did very well, I mean needless to say, because this is something common with other brands. Good business with low cost, but very good and let me say, higher than ever business with Chinese customers coming to visit Japan, and Korea still very solid. Why is that, I mean, difficult to answer? I can tell you that actually, I mean, talking about China Mainland specifically, I mean, our strategy in the past, not something that we implemented over the past few months or a couple of years, has been since ever, very clear -- based on very clear brand strategy that has been driving all our business decisions, including distribution strategy. And this is something very important to highlight because as you know very well, in China, we have a significant number of stores, but not many, not in all the cities. And we have carefully looked at some specific locations in some important cities to open, not only visible stores but also to open, over the past couple of years, some important flagship stores. And this has been very important, first, because with such important stores, we can drive more business, but also because these stores are a very powerful ambassadors of our brand. So overall, I can confirm what you said. Sorry, I can't give you a better, more precise answer, but I think that this is the result of a strategy and not only because also we have an organization in China in the retail, in the DTC and not only that is very, very strong with their very first priority the customer, customer experience, the customer satisfaction. So again, long story short, I think that the brand in China is very strong. And let me say, not only in China itself, but with the Chinese customers because business was very strong in the first quarter, not only in that market, but also in the other markets, still with the Chinese customers. The second question is actually very tricky and important. Thank you for the question, because it gives me the opportunity to clarify something that is very important. The first quarter results have been very strong, and we are extremely happy about this result, but it will be a big, big mistake to extrapolate these results over the next 3 quarters. I mean we maintain our view about this fiscal year that is based on the current very uncertain situation -- scenario that makes us very prudent and very vigilant. So the way we plan our DTC business this year, as always, let me say, but this year more than ever, is very prudent. And again, let me say it again, but we show you know very well that we normally plan our DTC business with a comp of mid-single digit and with the space contribution of mid- to high-single digit. And this is the way we have planned our upcoming full winter season. Of course, we also know that if, for any reason, hopefully, the market demand should be better than what we plan right now, we have developed a quite flexible supply chain, able to react up to more or less 10% to the eventual full higher demand coming from the market. And this is what happened last year, by the way, in full winter '23. But again, this is our current view. Any more aggressive, optimistic extrapolation is something that we don't endorse right now. Another important point I wanted to highlight, and then I'm done, is about Q4 of this year. Q4, of course, is by far the most important quarter for our business. Last year, Q4 was extremely good, specifically November and December were the strongest 2 months of our history for several years, also including weather that was particularly favorable in some regions like China. So this year, we see very difficult to replicate those results. And so again, our view for this year -- notwithstanding a very good results we are reporting today for the first quarter, our view for this year is still unchanged, very prudent and prudent. We are, as a management team, very vigilant on what may happen or may not.

The next question is from Louise Singlehurst with Goldman Sachs.

I just wondered, firstly, on Stone, absolutely fantastic results. And I presume, obviously, we've had the transition, more focus on DTC. But I presume what we're seeing now is the fruits of the rebranding, the relaunch, so i.e., it's upwards and onwards from here, just to make sure that we're not seeing anything else in the past for Stone Island. And then just on the second question, I wonder if I could just ask about the U.S. Obviously, a very nice performance again in Q1, bit of an acceleration from Q4. Obviously, the wealth indicators and the wealth signals that we see in the U.S. are very constructive to luxury consumption. But do you think now that we are on a forward trajectory for the U.S. consumer and seeing a bit more or less volatility. I know at the full year, you talked about quite a volatile pattern that was happening to the U.S. consumer week on week.

Thank you, Louise, for your questions about Stone Island. I mean the first quarter reflects exactly our view for the year, more or less. Honestly, what we said on Stone Island for this year is that we expect a flattish top line. Q4 was down 5%, but there was an impact of wholesale in Q1 and the same will be in Q2 as on in the first half of the year, higher, deeper than what we expect in the second half of the year. But having said that, behind this flat or slightly negative number, there is a nice positive -- strong positive number in DTC and of course, a deep decline -- a deep negative number in the wholesale. This is exactly what we expect for this year. Wholesale will be down for sure in the high teens, as I have said before, hopefully offset by a strong, good performance -- a good increase in the DTC channel. That, of course, is something that we are strategically planning and trying to execute for the brand. Of course, it will take time because, again, if at the end of the year should make what we expect right now, what I just told you, we would be very happy, but still very cautious that -- I mean this will be still a long and longer story to build -- to change -- to convert the business model from wholesale to DTC, but also to convert the business again, something I said several times, we need to build that kind of retail DTC culture that needs some time. So this is -- I hope I answered your question about Stone Island. About the U.S., yes, you're right. The first quarter was very good also because -- something important that Elena highlighted is that the wholesale business in the U.S. was negative -- was negative for several reasons. I mean, first of all, because the wholesale channel is under pressure everywhere, but in the U.S. even more than in another regions. And also there is the negative impact of the conversions of Nordstrom and Saks that we did last year, bla, bla, bla. Something you know very well. So the DTC business actually did well -- having said that, you touched the world volatility. Honestly, I have to tell you that in the U.S., we still see the business more volatile than in other regions. And so results are good. But I mean, we are very vigilant in all the regions, but in the U.S., even more because business has been good in the first quarter, but with ups and downs. I mean, of course, the average was a significant up, but again, it's not still that stable a growth you can expect or you will probably thinking about. So U.S. is good but still volatile.

Next question is from Anne-Laure Bismuth with HSBC.

I will stick with questions. So the first one is on current trading. Could you give us a bit of color on current trading and some granularity by region, please? And the second question is on Stone Island and more broadly on M&A. So we have heard in [indiscernible] you could do another acquisition. Is it fair to assume that this won't happen until our Stone Island is right on track. Thank you very much.

Okay. Let me start from the second question because it's very easy. No, we are not looking, not even thinking of any potential acquisition, not now, I mean, maybe in the future, who knows. But definitely, that is not now, also because we are all as management team, including also Mr. Ruffini, very busy all the day long with the 2 brands, Moncler and Stone Island, because both of them have a great potential. But in order to take advantage of this potential, we need to take care and to work very hard. So the first question, current trend, I mean, current trend, of course, I'm talking about the first quarter, let me say again that the results were good. Let me give you some more color. I mean, January, very good, March very good. February, extremely good. Because in the back of the Chinese New Year, business was extremely good everywhere. Of course, in Chinese Mainland, but not only because something important to highlight for this quarter was that Chinese customers traveled around the world, of course, in the countries close by China, but also in Japan, more than ever, we said before, the contribution of Chinese customers in Japan was very good and more than -- not more than ever, but much more than last year, they traveled to Europe. And the contribution of the Chinese cluster in Europe was still a little bit behind what it was in 2019, but not so far and getting closer. So again, thanks to Chinese customers, but not only thanks also to the other nationalities, thanks to local customers, business in Q1 was very good. And in February, particularly good. Current trend, of course, for what is worth, because we are talking about 3 weeks only of business in the, let me say, least important month of the year for our business that is April, also with some -- and comparability due to the Easter date that this year was in March, last year was in April, blah, blah, blah. But in any event, April is good, is positive, but on a much more normalized trend. So good, positive, but not strong as much as the results we report for the first quarter. Again, something that we keep observing, positive, but is strictly related to 3 weeks of business, so not necessarily particularly meaningful.

The next question is from Chiara Battistini with JPMorgan.

Okay. First question, on your performance within the Moncler brand by category, within that 26%. I was wondering if you could share some color on how to think about the different categories within the Moncler brand and also in outerwear, the sort of carryover versus newness performance? And the second question, I was wondering on the return on events, like the one you had in St. Moritz. I was wondering if you could share some snippets on how to translate these events into financials, for example, the store traffic you've seen after events or conversions or e-commerce? Any idea on how to convert these events into results?

Okay. Thank you, Chiara. About your first question, product category. I mean all the different categories performed very well, quite well. Something important to highlight because first quarter is at the intersection between the end of winter and the beginning of the summer season. And what I can tell you that, I mean, to some extent, may have helped our results was the weather. I mean, you know that, I mean, we don't like to talk about weather because it is totally meaningless in the long term, but, I mean, in some specific weeks, in 1 month or 2 months, may help the business or may not. January and February were quite cold. And this has, not only the end of the full winter season, but in particular, the category, the outerwear category, and that's, of course, contributed to some extent also on the average selling price. So outerwear in the first quarter performed very well. But again, for this specific reason, looking at the collection overall, I can tell you that the appreciation for the new Spring/Summer collection was, still is very good, which makes us very, very happy about the future. And of course, I mean, the appreciation for the end of the full winter season was very good. I mean, overall, outerwear is still our leading category. But needless to say that -- I mean not just in the first quarter, but overall, the knitwear is growing faster than outerwear and also other categories that are still smaller, are growing faster. I mean our strategy, product strategy, is still what you know very well, to increase the [indiscernible] of our collection and to invest more and more in the other categories. But in the first quarter, again, outerwear performed very well. About the return, of course, the financial return is something quite difficult to evaluate, even more in the shorter term. These kind of investments, like the event we held in St. Moritz, the event was literally extraordinary. Also for the impact -- the immediate impact of that event, of course, the immediate impact is constantly measured through all the different metrics that are reach, that are the engagement, that are the media pages. And so again, without giving you specific numbers, but I mean, the impact was very good. Of course, this is very important, just not only for the first quarter, but for the future of this brand, because you know that Grenoble is one of the 3 pillars, let me say, the second, by importance, pillar of our strategy. And we all as Moncler team, honestly, strongly believe in the potential of Grenoble because it totally represents the heritage of Moncler. And so again, something important to highlight is also that the -- was not only the event very strong, very impactful, but the collection we presented during the event was really beautiful and this is not just my opinion, but everyone said that the collection we presented was something literally better and different than any other collection we presented in the past.

The next question is from Thomas Chauvet with Citi.

Good evening. Two questions, please. The first one on the Moncler brand. Q2 used to be just 10% of sales historically. Given seasonality, it's trending towards 15% of your full year sales as part of your all year around product strategy, as you discussed. Can you comment on how you're approaching this, particularly Q2 '24, from a product standpoint, communications, events. And then related to that, Luciano coming back to your April comments of more normalized retail growth. Consensus Q2 retail is about plus 15 % for the Moncler brand. Is that a good estimate for April? Secondly, on Stone Island, strong retail growth, plus 31%. Could you provide an indication of how much space contribution there was in the quarter. I think the network was up about 20% year-on-year. I guess that includes some conversions. And then within like-for-like, I'm sure you're measuring that, particularly for this brand. What was the components between volume, price and mix? I would guess it's probably still a lot of volume growth.

Yes, Thomas. And starting from your last question, of course, we can't provide this kind of detailed information about Stone Island. But what I can tell you is that the 31% incorporates space for sure because something important to highlight, I mean, we converted some shop-in-shop in department stores like [indiscernible], like in Milan and Rome, like De Bijenkorf in Amsterdam from wholesale to retail. And -- but also the organic growth was quite important. I mean, let me say half and half, okay, 50% space and 50% organic growth. Okay, volume and price, I mean, it's totally meaningless, honestly. For 1 quarter only. The other question, which was your first question about Spring/Summer second quarter, okay? I mean, Spring/Summer, is doing well. I mean, let me say that last year, as you know, we reported a very, very strong result. And so this was good last year, but the bad of this year is that we face and we compare with a very, very tough, very difficult numbers of last year. But again, the current trend is good, as I said before. Whether or not we can make consensus is something I don't know, but what I can tell you is that second quarter specifically, our view is much, much softer from the results point of view than in the first quarter for several different reasons. One reason is that the second quarter is still quite weak from a DTC point of view. And there was [indiscernible] that historically last year also, in the second quarter, made an important contribution of business, this year will be down for the reasons we said before. So second quarter specifically, I don't know, but we do not expect a strong growth rate. First, because again, we compare with last year, it was particularly strong second for what I said about wholesale. Something important to highlight about Spring/Summer collection is that we keep investing in product and category, but we invest more than ever in communication, something I like to highlight, remind everyone is that, last week, during the design week, we held that event that was very, very successful to take over the train station in Milan. And this is something that, again, was particularly impactful and was purposely held in that week, not only because it's a very high traffic week in Milan, not only in Italy, but also because, I mean, in a season, [indiscernible] season is a season that is different from the past, is becoming more and more important for Moncler.

The next question is from Charles Scotti with Kepler.

Yes. I have two. The first one, would you mind sharing with us the breakdown of the Moncler 26%, constant FX, DTC growth between space volumes and price mix. And more specifically, if you could tell us what was the comparable top sales growth did you see for Moncler in America because I'm quite impressed by the performance there. But I just want to check if there is a disproportionate impact of space in the region compared to the group's average. And then my second question relates to pricing. You have been particularly active between February and May last year. So in this context, is it fair to assume that the pricing impact will remain quite relevant in Q2 again and then will vanish during the remainder of the year. And year-to-date, it seems that you have raised prices by 3% to 4%. Are you satisfied with the current price levels and price gap that has narrowed to, I guess, around 33%, 35%, I think? Or should we expect further price actions during the rest of the year?

I mean, your first question, of course, we are not providing all these detailed numbers. But I mean, just to give you some colors about the 26%. Of course, space and comp, let me say that comp was the highest contribution of that number. That's for sure. How much price, how much volumes. I can tell you that, I mean, back to what I said before about the collection of the [indiscernible], blah, blah, blah. I can tell you that price, but more specifically, price mix was higher than volumes in the first quarter of the year, differently from what we normally plan in the long term. I mean the long term in 12 months period of the business. You know that we normally expect volumes a little bit higher than price. But in the first quarter, price -- but again, the price mix and not the price itself was higher. About the pricing policy, specifically, you know that our price increase we are planning. I mean, we plan for this year is around mid-single digit. A little bit higher in the first half of the year than in the second half of the year, to your point. And of course, much lower, much lower than last year. So in price increase, let me say, inflation itself on our product this year will be much, much more moderate. About the price gap, I can tell you that for the first time and not now, but in the upcoming fall winter season, our price gap with China will be slightly below 1.40, which is good because, as you know, we are working to decrease this price gap. I mean we have been working since many years ago, together with Roberto, on price gap, to reduce it and to achieve one day in the future, but hopefully soon, probably in a couple of years, our target that is 1.3. So for the first time, it will be slightly below 1.40. Normally, a price gap, I'm talking about with China, is the same also with the other 2 markets, important markets in Asia that are Korea and Japan. But this year specifically, something, of course, you know very well, the prices in Japan due to the deterioration of the local currency, are lower, about 5% compared to China. So Japan right now and then also we plan for fall winter, the same is more convenient 5% as compared to China. I don't know if I answered your question.

Yes. And Charles-Louis, just to be a little bit more precise on your first question. So no, there is no abnormal space contribution in the first quarter. You know, we didn't report it separately, but I just wanted to reassure you that there is nothing really standing out compared to the yearly indication of something in the region of 5% to 6%. And then in terms of price mix and volume, it was about 2/3 price mix and 1/3 volumes.

The next question is from Piral Dadhania with RBC.

So my first question is just on revenue performance in Q1 by product line. Obviously, there's a lot of positivity around the Grenoble launch at the end of last year. Could you just help us understand what the -- whether between your mainline -- main collection, Genius and Grenoble, there was -- and either any of those which outperformed the other? And what your expectations are for Grenoble for the rest of the year? Can you see that increasing as a percentage of the mix, which I think is around high single digit currently. And then my second question is just on the APAC region again. Obviously, very strong growth, as others have alluded to, perhaps you could provide a few more details in terms of the growth rates, which you called very strong in Mainland China. Are you able to quantify that for us? And maybe also give us some indication of maybe what the Japan growth rate was? And also if you could, what percentage of revenues are being generated by Chinese nationals, onshore versus offshore?

Okay. I mean about your first question, product-wise, I mean categories, I mean, something I said before also were stronger in Q1, I mean, not extremely strong, and I mean, not too much different from Q4. But in any event, thanks also to the positive weather, we sold outerwear very well. Talking about, I mean, what we call the pillars of the brand. Grenoble performed very well. Honestly, very well, but not much, much better as compared to the rest of the collection. Of course, Grenoble is again something strategically we strongly believe in because we believe there are great opportunities, and we are very happy to see the business keep growing. Of course, it will take time. Grenoble's contribution is already quite strong high single digit, I mean, close to the double digit. And so again, we expect to pass the double-digit soon. So again, Grenoble collection, that also was not what we presented during the event, but the Grenoble collection performed very well. Again, something that -- you will never see overnight big, big difference, a big result. But in any event, we are very happy with the performance of Grenoble.

And then your second question was about some more color around Asia Pacific. So APAC growth in Q1, China, Chinese cluster, Japan. And then in particular, you asked about Chinese cluster, how much was local versus tourist right? Sorry, just to make sure we didn't miss anything.

It was. I'd appreciate -- sorry, I know there's two questions. Give just a bit more color on APAC to the extent that you can give, it would be great.

Okay. About the Chinese cluster, I mean, China, I mean we just said, I mean, Chinese cluster performed very well in China, but also in APAC and in Japan, and this is something everyone highlighted and we did highlight because there was something not unusual, but much stronger than in the past was the inflow in Japan of Chinese customers. So Japan performed very well, thanks to a single-digit increase growth of the Japanese cluster, but also thanks to an important contribution of Chinese customers. Other countries, I mean, Korea still performed very well. I mean Korea, as you know, has been very solid since 2019, including the COVID period when -- it's also the only currency that kept growing and it is still doing quite well. So I mean, this is the color I can give you about Asia. Again, Chinese cluster is still very good, but all the different nationalities are very good. Japan, of course, local customers in Japan still good. But of course, Japan situation, I mean, behind deterioration of the local currency, there is also the reaction of some brands including Moncler to increase prices in order to protect our margins. And this is having some impact on the local consumption. But nevertheless, the Japanese cluster is still positive.

And Piral, so all the countries you mentioned, so Mainland China, Japan, Korea, they all grew double digits. So there wasn't one specific country that massively outperformed others. So China Mainland was up double digit. The Chinese cluster was up a very good double digit. About 70% of spending for the Chinese customer -- cluster was local versus about 30% outside of Mainland China. And about the cluster. So it's actually still around 1/3 more or less of total retail sales because other clusters grew quite nicely as well in Q1.

The next question is from Chris Gao with CLSA.

I have two. So the first question is related to the Olympic impact on the timing of your new product introduction and promotions. So we know that this year, Paris Olympics will happen in late July to early August, and just wondering if it will impact your full collection introduction. Do you consider to introduce your full collection earlier than normal years? Or do you plan to do some core customer CRM events possibly earlier, maybe in the late June. So just wondering about if there's any seasonality impact, timing shift in terms of a certain event as well as new product launch. So the second question is related to the Grenoble. Luciano just mentioned about the very strong growth momentum of Grenoble. And as I also cover China sports goods. Right now, we definitely note a very explicit trend that Chinese cluster strongly uphold the functionality, technical apparels, carbon plate running shoes are selling very well. So I wonder for Grenoble as a strongly functional product collection, do you see Chinese growth is even higher than overall collection? And what's your detailed plan in terms of Grenoble stores launch, maybe in China offshore.

Okay, Chris, thank you for your question about Olympics. Honestly, we don't see any impact coming from Olympics and we are not tacking specific actions for the upcoming Olympics in Paris. So nothing, honestly, I can add -- I can tell you about Olympics. Talking about Grenoble. Of course, Grenoble is doing very well. Again, is growing double digit, but I mean all our business has been growing double digits in the first quarter. Honestly, I can't tell you that, I mean, we see strong results coming from Grenoble in China, not much stronger than in other regions, but I can tell you for sure -- not for sure, but I mean this is what we believe that the potential in China, for exactly what you said before, is very, very high, something that will grow step by step. And -- but we see a potential for Grenoble growing very, very strong in China for the next years. I don't know if I answered your question, but if you have some follow-up, let me know.

Yes. Just for the first question, I just have some follow-up. Actually, my question is related to your -- if the Olympic timing will impact any of your fall collection introduction on shelf? Or would it have any impact on your CRM events timing Yes? This is my question.

No, no impact on our deliveries honestly, and no specific change in our CRM activity. That, of course, is still very intense, but not more -- nothing different from what we do normally.

The next question is from Rogerio Fujimori with Stifel.

I have two questions. The first, I was hoping if you could help us how to think about the phasing of marketing investment this year given that you had the Grenoble event in February, and you have the Genius event planned for the second half. And my second question is about China. Could you remind us about your store opening plans in China this year?

About your first question, marketing phasing, important question, because this year will be different from last year. You may remember that last year, in the first half of the year, there was an important impact and much higher on a percentage basis than the second half of our marketing activity, and this was due to the event we held in London for Genius. This year, we expect a much more balanced marketing budget between the two different periods, first half and second half. This is because, I mean, of course, in the first half of the year, I mean, we are activating many, many initiatives, not only the event at St. Moritz we talked about, but the event of last week in Milan and also a very constant campaign -- advertising campaign and the communication whatever. So our voice is constantly in the market, but also because, as I said before, we have an important investment planned for the second half of the year. When, where and what is something that we have not disclosed yet, but details will come soon. And store openings in China, I mean, of course, overall, we have for -- not China only, I mean, worldwide, we have, as you know, about 15 new openings. And for this year, in China, we are talking about 6.

The next question is from James Grzinic with Jefferies.

My question has been asked, but for the sake of making most of my time. Can you perhaps -- talking about clusters again, on the European side of things, if we split out from the 15% growth you reported in Q1, could you tell us what locals would have grown by in Q1, please?

So the growth of Europe on locals only.

Yes, please.

Correct. Of course, we don't report this kind of precise number. But again, I'm happy to give you some color, but not much more than what I said before. Europe was very good in the first quarter, of course. And it was very good because the business with the local customers is still very strong, very good, but also more than last year, the business with other customers coming to visit Europe, specifically Chinese customers, was very good. And this was much better, much better than last year. Of course, together with the business we did with Americas, with Korean -- these 3, American, Korean and Chinese customers are the 3 most important nationalities in Europe. So the new fact I want to highlight is that the Chinese cluster contribution in Europe in first quarter of this year was good and much higher than last year. But, overall, also the business we did in Europe with local customers was very good.

The next question is from Antoine Belge with BNP.

I've got only one question. If you do a follow up on one question. Regarding the store openings, I think you mentioned out of 15, there should be 6 in China? Is it possible to have a bit of a breakdown of the 9 others? And also taking into account that you've sort like enlargement plans. What sort of increase in the average selling surface are you -- average surface of the store are you planning. I think last year, it was a low single digit, if I'm not wrong.

The new openings, Antoine, the 15 new openings are pretty equally distributed over the different regions. In China, as I said, 6 new openings. But in all the different markets, we have some openings. Talking about the expansion projects. Of course, there are some projects, most of them are associated with relocation of some stores. I can give you some example. We are relocating in America, the store of Atlanta, the store in Hawaii, Kalakaua. There is also an important project in China, is our Nanjing Deji store. That is one of the most powerful stores we have, not only in China but worldwide, for sales density and we are expanding that store to take advantage of the high traffic and high business. And many, many other, but these are the most important.

And perhaps, Antoine, the only thing to say is that when it comes to openings, they are concentrated mostly in Asia and in Americas, partially, so broadly equally split. While for EMEA, there is a much more significant activity when it comes to relocation and expansion actually, probably just relocations and expansions in EMEA. So maybe that's the only thing that is important to flag.

And maybe on the average increase of the size of the store this year. Would it be much different from last year and that low single-digit number.

I mean it will be more or less in line. I can tell you that maybe a little bit less because again, I don't have the number, but -- and even if I had, I could not disclose this number, not for the quarter, Antoine. But in any event, last year, we did some very important expansion projects. Just to mention a couple. I mean, Plaza 66 in China, in Shanghai, Zurich store, the game store and so forth. This year, we don't have such an important number of expansions. I would say that the most important is what I mentioned before, which is Nanjing, that again is a very important store and we will double the space. But also the new stores we are opening, of course, note that the average size of our new openings is higher than the average, of course, depending on where we open. Because department stores -- when we open a concession store in department store or in [indiscernible] retail store because we have some project [indiscernible] retail, normally have a lower size than the average. But again, nothing particularly significant, not this year, not as much as last year, when again, some projects were particularly important for size.

The next question is from Paola Carboni with Equita SIM.

I have two. The first one is about the normalization you have mentioned for Moncler in April. I was wondering if you can provide us some more color in terms of nationality. So which nationality has slowed down most compared to the trend of Q1 and also, if you can comment specifically about volume, is it fair to assume that volume is still positive in any case in the last few weeks? And second question is instead about Stone Island, particular following up on your comment on the like-for-like trend or kind of like-for-like performance, you have mentioned in the mid-teens range. Can you comment on that by region? So just to understand which region is performing better, is driving the DTC performance of Stone Island excluding space, let's say.

Yes, Paola. About normalization. Again, we are talking about a 3 weeks business, so not particularly meaningful. Honestly, there are no regions that are performing particularly well or particularly bad. A region -- but I mean not only the region but the cluster that is, of course, of particular attention for everyone in China and Chinese cluster. And I can tell you that the performance is still good, still positive. But overall, with no exceptions, again, good performance, but not strong as the results we reported for the first quarter. So honestly, again, I don't know what other color I can add, but I think that this is the explanation I can give you about Stone Island, I mean, an important question because something I did say even if it was in the speech of Elena. There is a market for Stone Island that is definitely outperforming, it is Japan. So in Japan, yes, we are doing particularly well. And it is totally, totally organic growth. Of course, in the future, I mean, we are planning, we are thinking of potential expansion. But right now, I mean, again, our strategy is to keep building the business organically. And I can tell you that Japan was, still is very good. Other regions, just to give you some more color, still good, but less. I mean Europe is still good. Korea, good, positive, but honestly still struggling. China, I mean it is still premature, but something important to remind you is that we source internalized the distribution of China on January 1 of this year. But the first action we took, as you know, was to close half of the stores because locations were not something we were particularly excited of. So right now, we have really to build a new chapter about the brand, about the distribution. And so China is something that I hope to have a more element to talk about, maybe, 1 year from now. But again, long story short, a market that is definitely outperforming is Japan. And not something that they suggested me with local customers because the business of Stone Island is not particularly affected by the inflow of Chinese customers.

Okay. So thank you very much to everyone for participating in this call. I think we're done with the Q&A session. For any follow-up questions, do not hesitate to contact myself or the rest of the IR team, we are here tonight. So just drop me an e-mail in case you need to get other questions answered. And as a reminder, our H1 2024 interim management statement will be released on July 24 after market close. And our quiet period will start on June 25. Thank you again, and have a great evening, everybody.

Ladies and gentleman, thank you for joining. The conference is now over. You may disconnect your telephones.