LANV

Lanvin Group Q2 2025 Earnings Conference Call Overview

• Company Leadership: The call featured key executives including Andy S. Lew, Executive President, and David K. Chan, Executive President & CFO, who provided insights into the company's performance and future outlook.
• Market Context: The company is navigating a challenging environment marked by global macroeconomic and geopolitical uncertainties, which have impacted performance across some of its brands.

Performance Highlights

• Brand Resilience: St. John brand showed notable strength, particularly in the North American market, despite overall sector softness and creative transitions affecting other brands.
• Cost Management: The company emphasized strong cost discipline and retail footprint optimization, which began to yield positive results in the second quarter of 2025.

Strategic Outlook

• Long-term Strategy: Lanvin Group is focused on long-term growth, with confidence in the foundational work completed in the first half of the year, particularly with new creative leadership.
• Future Demand Capture: The company is positioning itself to capitalize on improving market conditions as it continues to adapt and optimize its operations.

Financial Performance Overview

• Group Revenue: In the first half of 2025, Lanvin Group reported revenue of €133 million, marking a 22% decline compared to the same period in 2024. This downturn is attributed to a general slowdown in the luxury market and the Group's strategic repositioning efforts.
• Gross Profit Margin: The gross profit margin for the Group was 54%, with signs of improvement noted in Q2 as inventory from previous seasons was cleared and efficiency programs were implemented across brands.

Brand Performance Highlights

• Lanvin: Revenue fell by 42% year-over-year to €27.9 million, primarily due to cautious wholesale client behavior in EMEA. However, North American e-commerce showed a strong rebound.
• Wolford: The brand experienced a 23% revenue decline, but wholesale grew by 14%. The gross margin was impacted by lower production absorption.
• St. John: Revenue remained stable at €39.7 million, with a 4% increase in North America and a strong gross margin of 69%.
• Sergio Rossi: Revenue decreased by 25%, with a notable decline in wholesale. However, Q2 showed a 17% increase in retail sales.
• Caruso: Revenue declined by 11%, reflecting a broader reset in the luxury market, but the brand maintained a gross margin of 29%.

Strategic Initiatives and Future Outlook

• Operational Focus: The Group is prioritizing cost efficiency and refining its retail footprint in the second half of 2025. This includes elevating product assortments and launching targeted marketing campaigns.
• Creative Leadership: New artistic directors, Peter Copping for Lanvin and Paul Andrew for Sergio Rossi, are expected to drive brand momentum and consumer engagement.
• Market Challenges: The Group anticipates ongoing market challenges but remains committed to strategic investments and operational improvements to enhance profitability as market conditions stabilize.

Cost Management and Efficiency

• Cost Containment: Despite revenue declines, the Group managed to reduce general and administrative expenses significantly across brands, with reductions of 35% at St. John, 27% at Wolford, and 25% at Sergio Rossi.
• Contribution Profit: The contribution profit for H1 2025 was -€15 million, reflecting the impact of lower revenue and gross margin compression, but proactive cost management helped mitigate some of the losses.

Summary of Financial Metrics

• Adjusted EBITDA: The Group reported an adjusted EBITDA of -€52 million for H1 2025, compared to -€42 million in the previous year, indicating ongoing financial pressures but also a commitment to future growth through strategic investments.
• Revenue by Brand: The total revenue across all brands for H1 2025 was €133.5 million, down from €171 million in H1 2024, with all brands experiencing declines in revenue.

Conclusion

• Lanvin Group is navigating a challenging luxury market landscape with a focus on operational efficiency, strategic repositioning, and creative revitalization across its brands. The Group's disciplined cost management and targeted investments are expected to position it for recovery as market conditions improve.

• Upcoming Financial Results: Lanvin Group will release its unaudited financial results for the first half of 2025 on August 29, 2025.

• Conference Call Details: A conference call and webcast to discuss the results and outlook for the second half of 2025 will take place at 8:00 a.m. EST on the same day.

• Registration Requirement: Participants must pre-register for the conference call to receive dial-in information, which can be done anytime before or after the call starts.

• Company Overview: Lanvin Group is a global luxury fashion group based in Shanghai and Milan, managing several iconic brands and focusing on sustainable growth through strategic investments.