Good evening. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Moncler first half 2019 financial results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing Star and Zero on their telephone. At this time, I would like to turn the conference over to Ms. Paola Durante. Please go ahead, madam.
Thank you. Good afternoon. Good evening, everybody. Thank you for joining our call today on Moncler first half 2019 financial results. First of all, as usual, let me introduce you to the executive team on today's call. Our Chairman and Chief Executive Officer, Mr. Remo Ruffini, Luciano Santel, Chief Corporate and Supply Officer, and Roberto Eggs, Chief Marketing and Operating Officer. Before starting the presentation, I need to remind you that this presentation may contain certain statements that are neither reported financial results nor are they historical information. Any forward-looking statements are based on Moncler'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 the statements. Many of which are beyond the ability of Moncler to control or to 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. In addition, given the later starting of this call, I anticipated that we would make our best efforts to conclude it within one hour. Therefore, I ask all participants to limit it to two questions at a time. Finally, I remind you that press has been invited to participate in this conference in a listen only mode. Let me now hand over to our Chairman and CEO, Mr. Remo Ruffini.
Good evening, everyone. Welcome to Moncler first half 2019 result conference call. There are many things I would like to discuss with you tonight, starting from the result that even this semester have been above markets and my own expectation. In order to make our call focused and productive, I will concentrate on few important points. Our Moncler Genius project continued to give us very positive results and insights. It increases brand attraction, support traffic in store and online, and attract new customers. Half of the Genius customers are new client. They represent an important asset on which we have to leverage in order to make them loyal clients. This is a focus for the organization, not only for the retail, CRM, marketing, and digital, but also for design and the merchandising team. We already have evidence that we are moving in the right direction.
We are also starting to think to several ideas on how to leverage the project. It should help us to reinforcing our community, the Moncler community. As our new advertising campaign said, "Genius is born crazy." How crazy we were when we decide to create a jacket from a sleeping bag, or an icon product from down jacket, or when we first launched our Moncler Genius project. Maybe we were a bit crazy, but always with a clear vision and a great rigor in the execution. Few days ago, we had the first Moncler Hackathon, a 24 hours innovation marathon that brought together more than 450 employees from several nations, divide on a different age, which were able to design not only innovative but also actionable project. I was really impressed by the quality of them.
In Moncler, we are learning how to invent our future, how to be extraordinary, how to find new way of working together to encourage the creativity, the talent, and the inner genius that is in all of us. I strongly believe that this, along with our strong capacity to delivery on goals, will make our company and our brand even more unique. On the result, let me only highlight that 18% growth in revenues in Q2, 9% comp sales stores growth in the semester. All economics result up double-digit, represent another very good achievement. Beside the number, what is important in what you don't see, the quality of people that work in Moncler, their energy, passion, commitment, competence, their culture of innovation and ability to work cross-function. I know that there is still a lot to do.
The next six months are, as usual, very difficult, but I believe the path is clear and well-traced.
Let me now leave the floor to Roberto and Luciano for some more comments. Thank you very much.
Good evening. I'm Roberto Eggs. We'll comment the results that we have achieved, starting by the breakdown by region. It has been a very good second quarter that has been in acceleration with a +18%, bringing the total result of H1 at EUR 570 million, which is a +13% in acceleration compared to the first quarter that was at +10.6%. Italy show a very positive trend in the Q2, accelerating strongly from the first quarter, with a strong double-digit organic growth in the retail channel. EMEA grows by 15% had a growth that was double digit in both distribution channel, leaded by U.K. in acceleration, Germany, as well as France overperforming. Asia rest of the world continue to register outstanding results led by the Chinese market, mainland China, the Japanese market, and the Korean market.
Japanese and Korean market accelerating strongly in the second quarter. Americas deliver positive results, positive performance in Q2 in both distribution channels, wholesale and retail, and in both markets, main market, which are Canada and the U.S. market. If we go on the following chart, which is the revenue breakdown by distribution channel, we see that both channels have been performing very well. You see that retail has been accelerating from a +10% in the first quarter to a +20% in the second quarter. This has been strongly pushed by the comp sales that rose by 9% in H1. Online strongly outperform during this first semester, and has been growing at more than twice the retail pace. Wholesale revenues rose double digit at +12%. Second quarter has been also growing on double-digit growth with a +10%.
This growth has been leaded by shop-in-shop openings and airports performance, as well as the Moncler Genius to launch in the different channels. If we look at the monobrand store network evolution, we see that the total retail store is now at 196, which is a three net opening. The three net openings have been providing, basically, we have been opening five new stores. We have had one conversion in wholesale, which is a small store that we had in the northern part of Germany, and one temporary closure of the Fiumicino Airport. We still plan to open our 15 doors this year with a six door opened that are planned for the Q3 and another six store that we plan to open in the last quarter of the year.
Monobrand wholesale store and shop-in-the-shop are now at 60, which is a plus five new openings in the first semester this year. We plan another 10 openings. Also, they are balanced, five in the third quarter and another five in the last quarter of the year, bringing the total number at around 70 for the wholesale and 208 for the retail channel. I leave the floor to Luciano Santel. Thank you.
Okay. Thank you, Roberto, and good evening, everyone. Thank you for attending our call today. As you know, for the first time, we report our financial results under the new IFRS 16 accounting principle, which changes the way companies recognize their lease obligations. However, for the sake of clarity, consistency, and continuity in the way we comment our business results, we will still comment H1 results excluding the IFRS 16, providing in the slide at page eight, a reconciliation table that shows the impact of IFRS 16 on our income statement. The impact on balance sheet and the cash flow statement is reported in separate slides in the appendix of this presentation. I'm not going to comment page eight, but I'm more than happy to answer your questions on this topic, if any.
We can move now to page nine, where again, we report our income statement excluding the IFRS 16. That shows a top line of EUR 570 million, with the growth rate of 16% at current FX, and a remarkable, let me say that, gross margin of 76.6%, higher than the 76% we reported same period than last year, in part because of the channel mix, also because each distribution channels report a better gross margin than last year. Retail channel, particularly, gross margin was better than last year, also because our regular stores performed and are still performing better than our outlets. Selling expense is 37%, slightly higher than last year, totally in line with our plan. G&A at 12.6%, substantially in line with the 12.5% we reported last year, they include all the investments we keep making in our organization.
Of course, we are working to make our structure, our organization, stronger and stronger for all the projects that we have in our pipeline. Marketing at 7.5%, slightly higher than last year, but only because of a timing effect. We still expect for the year end, the same 7% we reported last year. Stock-based compensation, 2.3%, higher than the 2.5%, but again, only because of a timing effect. We expect for the year end this year to spend more or less the same amount we spent last year, in the region of EUR 30 million with, of course, hopefully a lower impact on our revenues. EBIT, EUR 94.6 million with a 16.6% margin. A little bit lower than the 17.4% we reported last year, but of course, with the timing impact of the two items I told you before, it would have been very close to the 17.4% we reported last year.
Net income, EUR 71.3 million with the same margin, 12.5% than last year. Last but not least, our EBITDA, which is a metric that probably is becoming meaningless in the future under the new IFRS 16, but it is still an important metric for the management team and I believe also for the market. EBITDA, we reported EUR 143.6 million with a 25.2% margin against the 25.1% we reported last year. Let's move now to next page 10, where we report the CapEx. CapEx at the end of June this year, we spent EUR 41 million, increasing the amount as compared to last year where we reported EUR 34.5 million, but something important to highlight, again, the allocation of the budget is more and more allocated to our corporate investments.
We still spent EUR 17 million in our retail network, but an increasing amount of our CapEx is allocated in what we call corporate, which includes, as you know, information technology, logistics, and the important new e-commerce website we implemented in Korea. As you know, the project started last year. The new website in Korea is up and running since June, so it started about one month ago. Very good results. Important to highlight, to anticipate that we are spending much more in the second half than what we report for the first half. We expect for the year end, a total CapEx amount in the region of about EUR 115 million. Okay, let's move now to page 11, networking capital, which reports a 5.5% on revenues, is slightly higher than the 4.8% we reported last year.
Still, I can say very healthy net working capital with very good credit control and very good inventory management. Nothing to add. Let's move now to page 12, where we see our net financial position that is positive for EUR 395.7 million, and which includes a gross cash of EUR 490.5 million. Of course, important to highlight the impact of the new IFRS 16, that it is EUR 562 million, which makes the net financial position negative for EUR 166.2 million. We can now move to page 13, where honestly, I don't have any comment on balance sheet unless, of course, you have questions. Last slide, with a few comment is at page 14, a cash flow statement where we report a free cash flow of EUR 71 million, higher than the EUR 66 million we reported last year.
With the net cash flow negative for EUR 54 million, impacted by the over EUR 100 million dividend distribution and the buyback program we implemented in late January of this year. I'm done with the presentation, and we are now ready to answer your question. Thank you.
Excuse me, this is the Chorus Call Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please speak up the receive of an asking questions. Anyone who has a question may press star and one at this time. The first question is from Elena Mariani with Morgan Stanley. Please go ahead.
Hi. Good evening, everybody. I'm going to limit myself to two questions. The first one is on your like-for-like trend in the second quarter. I calculate in high teens like-for-like, in Q2, I hope it's correct. I guess this is partly due to an easier sell sensitivity comp base in the second quarter. Could you perhaps elaborate a little bit more on the underlying drivers? Was it Genius and Palm Angels attracting a lot of traffic to your stores? Was it more contribution from your spring/summer products? Any sort of color would be highly appreciated. Perhaps also a bit of help on how to think about the like-for-like profile through the rest of the year, given the difference in sell sensitivity across the different quarters. Also maybe, on current trends as well, what you've been observing in the third quarter so far.
My second question, probably is for Mr. Ruffini and Mr. Eggs. I was hoping to get their opinion on this large and big debate we have in the market, around the large conglomerates in luxury winning against the mono brands. This is a very clear trend, probably because of the ability to attract talent or to leverage investments across several brands. Moncler seems to be an exception. Could you tell me your opinion about why Moncler is an exception in your view, and do you see a future also for mono brands in this industry? Thank you.
Good evening, Elena. It's Roberto speaking. I will give you some flavor on what happened in terms of like for like for the second quarter. As you rightly mentioned, we have seen an acceleration in Q2 also because Q1 we had a very high base on comparison. The second quarter was also high, but not as high as the first one. I think there are many reasons to explain. It's a mix of these elements that have been showing this acceleration. First of all, very good results for the spring/summer sales that we had both in wholesale and also of course, in retail, if we talk about comp. We are going to finish the spring/summer collection with the highest sales flow we have had since I joined the company since the past four years.
Of course, we have been helped also by having a Genius collection that was present in Q2, while last year we just at the start in June. This year we benefit from the Genius shows launch both in April and in May. This has clearly helped also driving traffic to the stores. The third element is the calendar effect of Easter, that has been slightly penalizing the months of March, and that has helped the results of the months of April. With the mix of these three elements combined explain this acceleration of the like for like in Q2. To give you some flavor on the Q3, we are in currently in line with the comp, that we have had for the first semester and with stronger launches in terms of June that are planned for the months to come. We remain confident.
Honestly, talking about the big group around the world, especially in our industries, I understand they're very strong, but we talk many time here when we make a meeting around the table, but we really feel very confident to stay alone. We really feel our strategy is very different than any other company. We feel we are quite unique and our uniqueness for sure help us to talk with our customer. Having said that, I don't feel we can have big advantage to being part of the big group except maybe some real estate. I think it's more the good strategy. They have every brand part of this group. We feel, as we say, the uniqueness. We feel that we change our business model in the last couple of years, and we feel very good, honestly.
Thank you very much.
The next question is from Susy Tibaldi with UBS. Please go ahead.
Hi. Thank you for taking my question and congratulations for the amazing results. Can I ask one more thing on the like for like actually? Q2 was really strong and I was wondering if there was any specific product or category which you think that really helped to drive this growth. Secondly, I wanted to understand a little bit better on the OpEx, because you have been very clear in flagging since, I would say at least six months ago that H1 last year obviously the like for like was amazing and so you cannot reasonably expect to have the same level of leverage and that was very clear. Still if I look at the selling cost specifically, I can see that in H1 they were growing faster than the pace of the retail sales.
I was wondering if there was any sort of something to keep in mind like any phasing or was it on the rent, on the personnel, or anything that you can comment on that will be very helpful. Thank you.
Good evening, Susy. Regarding the like-for-like and the growth per category, as you know, the spring/summer is less dependent on the outerwear. We have the other category that are usually, especially for the men, working much better. The cut and sew, what we call the T-shirt and the polo, are clearly categories that are performing and that are helping also to increase the unit per transaction that we have. The good performance we have out of the spring/summer, and we always say that we see room during the second quarter to further grow in the future, is part of the explanation of the growth of this category. The fact that we have also now put in the best sellers in the cut and sew.
I saw the T-shirt and the polo in auto replenishment has helped also to improve the total sales through of the spring/summer collection and has helped overall the like-for-like.
Hi, Susy. About your second question on selling expenses. As you stated, last year our selling expenses were particularly good, particularly low, and this was because our top-line growth was driven mostly by a very strong retail organic growth, which made our stores productivity to be particularly strong. The main difference is on productivity. Again, this year is okay. Last year was unusually very strong. Another impact, which is minor but important to highlight, is that in our selling expenses, we report also the impact of D&A, depreciation and amortization, of all our construction costs. This year, the impact is higher than last year because of the important CapEx we have reported over the past few years. This is the explanation. Again, 37 is totally in line with our plan.
Again, 36.2%, you may remember if you look back at first half of 2017, last year was lower than the year before, which is honestly quite unusual.
Thank you. For the rest of the year, is there anything that we have to keep in mind, or can we just expect sort of in line with last year for H2?
In line with the last year H2, yes.
In terms of % of sales? Yeah.
Oh, yes. I think it's a good guess.
Okay. Thank you.
The next question is from Janet Kloppenburg with JJK Research. Please go ahead.
Good evening, everyone, and congratulations on a great quarter and great half. I was just wondering if you could give us a little bit more of the metrics of the like-for-like. It sounds like the UPTs were up nicely. I was wondering about AUR trends. Also, overall, as we look forward, what pricing might look like. Do you anticipate that there will be a lift in your average selling price as we go into the fall season? Secondly, I was wondering if you could talk a little bit about the U.S. market. You had a nice gain there, but the smallest of all the regions, and I think it's been volatile. Perhaps you could give us an outlook for the region, both on a wholesale and retail basis looking forward. Thank you.
Okay. Thank you for your question. I don't know if I correctly understood your first question regarding the like-for-like and the different metrics that we have. Basically, we have seen positive metrics on all elements. The traffic of the store has increased middle single digit. We have had an increase also of the conversion rate.
Sorry, there are some noises. I don't know.
No, I think now it's back to normal. Average selling price has been in line with the result of the first H1 of last year. This is explained by the fact that having a much higher level of non-outerwear, we are happy to have these results in terms of average selling price that is increased, and basically then is the unit per transaction that has been driving a higher comp. We are now overall for the first H1 at 1.41 coming from 1.04 in 2015. Year after year, semester after semester, we have consistently increased our average transaction. Usually the UPT is going slightly down in the second semester, having more sales driven by your higher selling price from the outerwear and a little bit less of the other category. We expect here also for the full year an increase compared to last year.
Regarding the results of the American market, as you know, there is some turmoil on this market regarding especially the American department store. There we have had some positive results driven by the fact that we have started conversion of Bloomingdale's. We had the first conversion in June this year with two new openings ground floor that are planned for the second half of the year. This is peaking out a little bit, especially during the second semester, we'll see some business shifting from wholesale into retail business, where we believe that we can probably provide better results by managing that directly. We have two other openings with Bloomingdale's that are foreseen for this year, and we are currently actively working with Holt Renfrew in the Canadian market to drive some conversion during the first semester 2020.
The results on the wholesale has been also impacted by the current news that we have had on Barneys. We don't know if they are going to fill or not the Chapter 11. Here we have had some discussion internally and took the right measure to protect our sales and our investments. In terms of credits, we are fully covered. This has been resulted, especially in the month of June, in some delays in the delivery of the fall/winter season, both with them and with Neiman Marcus that have probably shown some slowdown in the results were expected in June. We hope that we can recover these results in July and August.
Does the impact of that change your outlook for the wholesale business in its entirety for the second half of the year?
For the second half, what we have is one shift, which is the store that is in New York on the 5th Avenue. It's a shift of part of the business that are going to have a positive impact on the retail revenues and the two openings that are foreseen in the last quarter of the year. I think that we are going to see positive impact for the North American market more on the first half of next year with already probably some acceleration towards the end of the year. It remains a market with much higher volatility than the other one. Also the political tension with China are not helping to drive tourism in the U.S. It has become more a local market than in the past, and we are benefiting less from the traffic, especially from the Chinese.
Thanks so much.
The next question is from Anne-Laure Bismuth with HSBC. Please go ahead.
Hi, good evening. Anne-Laure Bismuth from HSBC. I have two questions. The first one is on the contribution from new space in Q2. Is it fair to assume that it was around 2% or 3% based on the comments you made on the like-for-like performance for H1 and also for Q2? How should we think about the space contribution for the full year? I know that in the past you mentioned a high single-digit contribution, but could it be a bit below given the low contribution from new space that we saw in H1? The second question is about the performance in Hong Kong. Have you been impacted by the protest in June? If you can give us some comments about the situation there. Thank you very much.
Yes, hi Anne-Laure. This is Luciano. The space contribution for the first half space contribution was about 6%, a little bit lower than what, as you correctly stated, we normally plan, we anticipated for the year-end. Honestly, I believe that we will improve the space contribution the second half of the year. We still maintain our indication for the year-end of a high single digit space contribution.
I maybe add some flavor to what Luciano just commented. As you know, we on purpose plan our expansion refurbishment, relocation of stores and opening of stores usually on the third and the fourth quarter because it's where we think we have the better start having the full fall/winter collection in place. If I look at this year, we have had roughly 30% of the openings during the first half of the year. We'll have two third of the opening and the relocation during the third and the fourth quarter of the year. Some of these openings or relocation are major. I'm thinking about the flagship store of Munich Maximilianstraße that is going to open in November this year.
Some other relocation on the very important store on the Japanese market with Isetan and Matsuya, where we finally find an agreement with them to double the space or Kobe Daimaru or Takashimaya still in Japan. We have another one where we are finally going to get the ground floor in Hong Kong in SOGO. I think these positive news and elements are comforting us on the fact that we can achieve the result that Luciano just explained. Regarding Hong Kong, we have had an acceleration of the sales on our Hong Kong market in the second quarter of this year. I must say that with the opening of the SOGO ground floor store, we are confident for the result of the year-end.
A small impact on the traffic, a small slowdown in traffic linked with the political protests that we have seen lately, but overall, a positive growth on the Q2 for Hong Kong.
The next question is from John Guy with MainFirst. Please go ahead.
Yes, good evening. Thank you very much for taking my questions. One for Roberto, please, just to start with, in terms of e-commerce engagement and thinking about what you've done on social media. Certainly, looking at some of our metrics, you've had a very strong uptick in terms of Instagram engagement. Google Trends were very supportive as well. What have you been doing to drive, besides obviously Genius, is there anything else that you can point to, in particular, where you think you've had an exceptional success in driving social media and traffic, either through your e-commerce platform or certainly into the stores via that particular channel? Remo, if I could ask you a question, just with regards to not necessarily being part of a larger group in the future, but whether or not you believe there are some other brands out there that you find interesting.
Whether it's especially in dyeing or outerwear or where they do something maybe slightly better or equivalent to your expertise. I'm thinking of Stone Island as one example. Are these the types of brands that if you are looking to potentially leverage the kind of expertise and know-how that you have already, could make strategic sense? Thank you.
Good evening, John. First on the e-commerce part and the digital social media part, I think the changes we have seen has been mainly brought by the launch of Genius in June last year. As you know, social media is, in a way, it's a battle of content. You need to have something to say on a regular basis, almost on a daily basis. We have changed the way we are getting prepared. We are leveraging much more on each launch. We go on the behind the scene. I think also that the new campaign featuring Will Smith is also going to give us some additional visibility and acceleration on that matter. Finally, we have been really shifting now the media spend that we have, where we have an increase of plus 50% on the digital media investment.
On top, we brought in-house now a Chief Digital Officer that is also technically helping us to improve, and we are learning every day on this. The impact has been very good on Instagram, which is the focus we are having on the social media. If I'm looking also on the e-commerce side, we have seen an acceleration compared to last year, where we have seen higher conversion rates, lower bounce rates, so people are staying longer on our website, and we have had less returns. Overall, all the metrics on the e-commerce are positive. We think also that the experience and the knowledge and the know-how we are currently acquiring with the launch of the current market are going to have further positive impact on the culture and the know-how internally in Moncler regarding both social media and e-commerce.
It's clearly a very strong focus that the company has now. I think referring to what Remo was saying at the beginning, the Hackathon has been another accelerator of developing this internal culture and this digitalization of the company.
Roberto, just on that, is it also fair to say that the success of Genius is also driving, obviously first-time traffic into store, but also on having engaged and maybe bought something via Genius, they're coming back, and the loyalty is also being driven now towards some of your mainline collection. You're getting almost a double benefit, if you like, in terms of driving that.
I think you're completely right. I think the purpose of-- We always say that for us, Genius is the first digitally native project of the company that's been thought to be at the same time, something that is containing, developing content for the communication, but not only for the brand, but also for the store. They have something to say now on a weekly basis. We have really accelerated the number of events we do in store, the appointments we have that are driven by our client advisor. Clearly this is helping to improve further the metrics of the store, the traffic to conversion, but also the loyalty that continues to improve.
Thank you very much.
Remo.
Hi, John. Yes, I think there is few company interest on the market. I don't see many, especially in the reasonable size. The one you mentioned, for example, Stone Island, I think is a very good brand. I always say this, especially in the last 12 months, 15 months, I always say it, I really feel Moncler is like in a startup company. We really changed the model of business. We really changed the approach, basically in every area in this company, starting for supply chain, go to the marketing, then retail. I really feel a lot of energy in this brand, and I really feel that we have many things to do, and we really feel we can build one of the modern company in this market.
We want to really be very concentrate, and we really feel good, honestly, to continue to develop these new ideas, this new way to work, to improve energy, for sure, in the people in the company, to improve energy also to our customers. We feel we're quite unique in the luxury world. We want to continue to develop this idea. Having said that, at the moment, we don't see anything honestly interesting for us, but the doors are open. We will also watch around the market.
Okay, Remo. [Foreign language]. Thank you very much.
The next question is from Paola Carboni with Equita SIM. Please go ahead.
Yes, hello. Good afternoon, everybody. I have very short questions. One is, in terms of nationalities, if you can provide us a bit of color on what you have seen specifically in Q2. Secondly, in terms of current trading, you mentioned for July a trend similar to the H1 in terms of comps, so something similar to plus 9%. I just want to be sure I have correctly understood, and if so, I just wanted to elaborate in case you have seen any slowdown in the last few weeks compared to the strength of Q2. Thank you very much.
Good evening, Paola. One point regarding nationalities, they are pretty balanced. As we say, Chinese, they remain what the number one nationality. At the same time, the mainland China, which is the bulk of our Chinese customer, is continuing to perform very well, higher than the average of Moncler in H1. We have seen also an acceleration of the Chinese in Europe, especially on the Italian market and in England. A slowdown on the French market because, as you know, when we have this type of event like the one of the yellow vest, even now the market is quieter since a couple of months. It usually takes between three to five, six months for the Chinese traffic or Chinese travelers to go back to normal. At the end, it's something that is balanced.
The Japanese market continue to perform very well. We have seen an acceleration for the South Korean market. The local markets in Europe are performing very well. I see something that is very balanced and still a very strong demand from the Chinese market. Regarding the current trading, honestly, the big part of the year is in front of us. We see a trend that is not slowing down, but as we usually say, the mountain starts from September, the peak is in September till the end of the year. We are confident, but there is still a lot to do till the end of the year.
Yes, sorry. Just a follow-up. I forgot another question. Actually, on Genius, I wanted you to comment, if possible, on how the June launch performed, which was the first chance to compare with last year. Basically, to annualize this Genius project. If you can elaborate a bit on what you've seen in June.
Paola, you're not following the rules of the question, but still I'm pleased to answer your third question regarding Genius. I think it will be a mistake to compare year on year the different launches, because each launch has a different target. We know that when we launch our couture collection with Pierpaolo, that we are not expecting the sales that we have with Hiroshi when we sell Fragment. I will comment more on the fact that if the latest launch has been successful or not, and we have had two lately, one is the one of Simone Rocha, where we had a launch and an event both in Paris and in Seoul in Korea. The other one with a very strong launch that we had the month before with Palm Angels.
I must say that if we think about Palm Angels, which was the volume driver, we have had results that have been above expectations. Strong results with a target, again, completely different if we see these two late Genius launch, something much more sophisticated for Simone Rocha, more in line with what we had in the past with Gamme Rouge and something very energetic, younger generation, very successful. We have seen a crowd that we usually didn't see in Moncler since many years. With the strong performance both on the outerwear and the cotton front, where most of the items regarding Palm Angels, they have been sold out within the first week. We are confident about the further launches that are foreseen for this year.
We will continue now with an agenda that is really full, and we will bring back all the collection of the spring, summer, and of the fall, winter season in November this year on the 7th, where we will have this year not two, but three House of Genius.
One in Omotesando in Japan, another one for the first time with Galeries Lafayette on the Champs-Élysées, the third one here in Galleria in Milano, where we'll then, in the year after, we will open our flagship store. This will be reinforced also by around 10 shop-in-the-shop in department store and in wholesale partners, supported with e-commerce. Again, very strong energy that is expected this year. What will change, we have slightly changed the timing of the House of Genius. Last year, they were October through December. This year, we'll bring them from the 7th of November until the end of January, so even more on the peak season for us.
Okay. Thank you very much. The next question is from Melanie Flouquet with J.P. Morgan. Please go ahead.
Yes, good evening. Thank you for taking my questions. I have a first question, actually, sorry, it's just a clarification. You're mentioning space growth in H1 was 6%, but you've given the like-for-like at 9%, that implies a calculation at 4%. I'm just trying to clarify that the 6% relates to the true space growth and that the 4% includes is just not exactly the same, still the same story because of the outlets, et cetera, included in it. I'm just trying to understand what we are talking about when we talk about 6% against 4%, whether we had the wrong rounding in the like-for-like and in the total organic retail sales. That's my first question. Actually, the second question I had is when I look at your D&A, as you rightly pointed out, it's going up due to the CapEx spend of the previous years.
Also the former non-recurring charges is going up, which is your long-term incentive plan. How should we think about those lines moving forward? We should expect it to grow more in line with sales as that continues to weigh on the profitability and you compensate it elsewhere? Thank you.
Hi, Melanie. About the space growth contribution, the 4% is the difference between the retail growth and the comp. Of course, we know that the comp is related only to regular stores. Outlets are performing less well, still fairly well, but less than regular stores. The real space growth contribution is what I said, it is 6%, which, again, is lower than what we normally plan for the year-end. We still plan to do better in the second half, we still maintain the high single digit. This is the explanation.
Thank you.
About your second question, the D&A are higher. The impact of D&A is higher in the first half, and it will be higher in the second half and in the year-end than last year, and last year was higher than the year before. This is something that is totally incorporated in our plans because, as I said before, and as you correctly stated, the CapEx we made over the past few years are having an impact on our D&A, which is growing. Of course, not materially, honestly, but of course, talking about the selling expenses that incorporate the D&A of all the investments we made in our retail network, of course, in that specific item, there is an impact that is not a big impact. When I answered the question before, I highlighted this small impact. About the stock-based compensation, the timing in this item is very particular.
To make the long story short, as I said, we expect for this year to spend exactly the same, about EUR 30 million, which is the same amount we spent last year. Of course, the impact of the EUR 30 million this year on our expected sales is awfully lower, and again, lower than last year and probably lower than 2%. I'm not sure if I answered your question, but feel free to ask.
Yes, you did. Perfect. Thank you.
Okay. Thank you.
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Perfect. Actually, Thank you, everyone, for participating to this late call. I just give you a quick reminder. Q3 2019 interim management statement will be released on October 24, and our quiet period will start on September 25th. I don't have much more to say, just say if you have follow-up question, we are ready tonight or tomorrow, anytime. For sure, we wish you a very nice summer break. Thank you, everybody. Bye.
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