Moncler: Margins Intact, but Growth in Question

Moncler continues to deliver robust margins, although its growth trajectory is softening. The Italian company has some of the finest profitability in the luxury sector, backed by a debt-free balance sheet. However, existing boutiques are no longer driving growth. Future performance will hinge on its ability to broaden the product offering without diluting its premium margins.

Moncler lacks the product depth of LVMH or the multi-brand portfolio that cushions cyclical downturns. Its strength lies in a core product, making the model more concentrated and, therefore, representing higher risk. A down jacket born in 1952 for high-altitude mountaineering has been transformed into an urban uniform retailing for over €1,000. Moncler's masterstroke lies in selling a simple, seasonal item at a significant premium. Remo Ruffini pivoted the brand toward true luxury starting in 2003, a bet that paid off for two decades. Between 2021 and 2025, revenue climbed from €2bn to €3.13bn. The brand has shifted in scale, just as its momentum has begun to slow.

Growth is now bought in-store

Post-Covid growth has finally normalized. Following the 2022 surge, sales grew by 15%, then 4%, and finally just a token 1% in 2025. The warning signal comes from comparable store sales, which actually declined by 1%. The existing retail footprint is no longer driving the business. What remains of the growth is primarily fueled by network expansion and Asia. By the end of 2025, the Moncler brand alone operated 295 directly-owned stores, with Asia accounting for 52% of sales, up from 49% in 2021. Europe is retreating, penalized by softer tourism. Asia continues to advance, supported by a more favorable trend in China.

Margins that are the envy of the sector

While this slowdown could have eroded profits, it has done nothing of the sort. Its gross margin actually improved, rising from 76.6% in 2021 to 78.1% in 2025, driven by direct-to-consumer sales, which now represent nearly 87% of the brand's revenue. By selling through its own boutiques, Moncler captures the full value chain and maintains strict control over pricing.

However, this control comes at a cost. Each boutique adds rent, staff, and operational overhead. In 2025, selling expenses rose to 30.5% of revenue, compared to 28.8% in 2021. Operating profit slipped to €913m, and EPS fell for the first time in five years. Profitability has been preserved, but growth has not. The next chapter must therefore be written elsewhere.

Stone Island: A relay yet to be proven

The most obvious candidate for growth is Stone Island. Moncler acquired the brand for €1.15bn in 2021 to reduce its dependence on its heritage label. The brand brings a different clientele, a distinct product territory, and exposure less tied to the down jacket. It is reducing wholesale exposure, pushing direct sales, and expanding in Asia.

Four years later, the transformation is tangible, but the financial impact remains modest. In 2025, Stone Island accounted for approximately 13% of group sales - too little to shift the overall trajectory. Other initiatives remain fragmented, spanning footwear, accessories, lifestyle, and "Genius," its program of guest-designer collections. Financial reports have yet to show a secondary driver powerful enough to significantly reduce reliance on the core down jacket and the retail network.

The balance sheet provides ample time for this transition. Net cash approached €1.46bn at end- 2025 (excluding lease liabilities and financial debt), and the payout ratio rose to 61%. Moncler is returning more cash to shareholders, a sign that internal projects are not yet absorbing all the generated liquidity. This is the primary challenge for Leo Rongone as he takes over as CEO, with Ruffini retaining the Executive Chairmanship and creative oversight.

A valuation awaiting a rebound

The market is already pricing in a recovery. At around €54, the stock is trading at 22x 2026e earnings and about 10x EBITDA. This is a leader's multiple, close to that of LVMH, for a house that is significantly smaller and more concentrated.

Such a valuation assumes a return to growth. Forecasts incorporate this, with €3.8bn in sales expected by 2028. Q1 2026 offered some reassurance, with sales up 12% at constant exchange rates. However, this growth still stems from Asia and the retail network - the same levers as before.

Moncler maintains its margins, its brand equity, and its balance sheet. Stone Island and new categories must now take the lead. Otherwise, Moncler will remain a prestigious house, but one with growth too sluggish to justify its price tag.