Earnings Call: Q3 2018

Oct 24, 2018

Good evening. This is the Chorus Call conference operator. Welcome, thank you for joining the Moncler 9 Month 2018 Interim Management Statement 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, Investor Relations & Strategic Planning Director of Moncler. Please go ahead, madam. Hi. Thank you. Good afternoon, everyone, thank you for joining Moncler's 9 Month 2018 Interim Management Statement conference call. As usual for Q1 and Q3 results, the call is hosted by myself and by our Chief Corporate and Supply Officer, Luciano Santel. Before commenting on our revenue results, I need to remind you that this presentation may contain specific statements that are neither reported financial results nor other historical information. Any forward-looking statements are based upon Moncler's current expectations and assumption of future events, and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied by these statements. In addition, please remember that the media have been invited to participate to the call in a listen-only mode, and that, as usual, I will comment only constant currencies trends if not otherwise stated. Let's now move to the presentation, page three. Let me just make two quick comments. Moncler posted another strong set of results. In the first nine months, consolidated revenues were up 23%, 18% in Q3 only, with all regions and both channels showing impressive trends. These results have been largely supported by the great appreciation of fall-winter collections and by the success of the Moncler Genius project that is really boosting brand's momentum worldwide. Page four, revenue breakdown by distribution channels. Both channels showed strong performances. In particular, retail sales rose by an outstanding 30% in nine months or 26% in Q3, driven by excellent organic growth and by the contribution of new space. All regions showed very good results, with Asia leading the growth. Wholesale also performed very well, driven by fall-winter and Genius collections, and also by the e-tailers growth, which are growing very nicely, and by the development of shop-in-shop. Finally, as we say always, last but not least, by a solid sell-through across all regions. Wholesale results have been particularly strong in APAC, U.K., and U.S. Based on these results and on our current visibility, we now expect 2018 wholesale revenues to grow low double digit at constant currencies. Let me also comment that our e-commerce posted outstanding double-digit growth in both distribution channel. Page five of the presentation, revenue breakdown by region. In the first nine months of 2018, global expansion continued with international markets growing 26% and accounting for 86% of total revenues. Also, our domestic Italian market reported a sound 8% growth. Let's now move to the following pages for a detailed analysis on our revenues results by region. I start to look at EMEA, including Italy, page six of the presentation. In the first nine months, Europe and Italy combined reported a solid 13% growth, driven by local demand and travelers. In EMEA, we continue to see excellent performances in U.K., France, and Middle East. Eastern Europe and Germany showed very good results. Italian revenues were largely driven by the retail channel, benefiting also from the enlargement of the Montenapoleone store and the opening of a new DOS in Florence, which both occurred in Q4 last year. Let's now talk about Asia, which as you know, includes APAC, Japan, and Korea. Asia recorded an outstanding 39% growth in the nine months, or 36% in Q3 only, with China's mainland and Korea as the strongest performer in the quarter, primarily thanks to a sound retail organic growth. We were also extremely satisfied with the results of Japan and Hong Kong, which continue to grow sound double-digit. Japan developments were driven by a robust double-digit growth in the retail channel and by a solid wholesale performance, notwithstanding the ongoing doors selection. Hong Kong record an outstanding results in all the stores, which grew double-digit, but in particular in our Canton Road flagship, our first store in the network, which is really doing very well. Finally, Americas. Revenues in Americas increased 19%, 10% in Q3, with similar performances in the two main markets, U.S. and Canada. Both distribution channels in both markets posted solid growth. Retail continued to grow double-digits also in Q3, both in Canada and the U.S. Last, finally, page nine of the presentation. Let me comment briefly on our store network. At the end of September, our retail stores reached 214 units. In the quarter, we opened five locations, including a store in Oslo, Norway, a new market for Moncler. Two stores were opened in October so far, including a store in Bologna, which is actually doing very well. We confirm that we have two upcoming openings in Q4. One of that is our store in Mexico City, about which we are very excited. Therefore, in 2018, we should open 17 doors, 17. During Q3, we also have relocated our store in New York Soho, and in October, we have relocated our Sloane Street store in London. Both of them are giving us very good results. For 2019, as usual, in November, we anticipated the secure store for the next year. I can anticipate that we have some 15 doors, 15, secured, and on top of it, in addition to it, some important relocations. In terms of shop-in-shop or sale mono-brand, we have opened two shop-in-shop in Q3 2018, and we expect further eight to be opened in Q4. Next year, I can anticipate that we should open something around 15 shop-in-shop. It's all for me right now. I will now leave the floor to your question and Luciano and I will answer to them. Thank you. Excuse me. This is the 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 touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question comes from Anne-Laure Bismuth with HSBC. Please go ahead. Yes. Hi, good evening, Paola and Luciano. Just a quick question. I know that you are not disclosing the split between the retail, between the like-for-like performance and the contribution from new space, but would it be possible to have an indication? Is it fair to assume a like-for-like performance in Q3 in the high teens? My second question is about the FX impact, which was -3% in Q3. Can you give us an indication why it was negative? If so, should we think about the FX impact for Q4? Also, can you give us an update about the Genius activities, the Genius project? I know that you have a lot of activities planned for Q4, and you have secured already a number of new collection, new capsule collection for next year until May, but do you plan to introduce a new collaboration? If it's the case, when do you plan to announce these collaborations? Thank you very much. Yes. Hi, Anne-Laure. This is Luciano. About your first question, like-for-like indication, as you said, we don't report any number in Q3, but your calculation is fair. Our like-for-like in Q3 was very good. Your indication is a fair indication. About FX impact, we reported a negative FX impact in Q3, much lower than before because now FX are more in line with what they were last year. You have seen correctly that in some regions, specifically North America, there was a little, a small impact due to the fact that we post in our sales line the impact, negative or positive, and in this case it was a negative impact, of our hedging policy. We hedged the US dollar at the time we developed our pricing policy at 120. Of course, as compared to the current 115, 116, this delivered a couple of million EUR negative difference that was posted in our sales line. About Genius, as we said other times, is a building with open doors. We started with the designers, you know very well. Now, we will announce the occupants of the building for the next year in February. Again, we can't anticipate anything, but, again, the building has open doors with new designers that may come. Thank you very much. Just about the FX impact, it should still be negative in going forward given the hedging policy? In Q4, yes, we may have a similar impact, but again, I don't want to say something that may be misleading, Laura, because we don't have, on our margins, any negative impact. Because at the time we developed the pricing policy, we developed the pricing policy based on the existing level of currencies, of exchange rates. At that level, whatever it is, we hedge the currencies. This is very important because in this way, we protect our margins. Whatever may be the currency in Q4 or next year, or whatever it will be, it is only a technical accounting posting. Okay? Because it's not correct to talk about a negative impact. It's just something that impacted technically the top line, but not at all the gross margin. The gross margin is protected by the pricing policy and the hedging policy. Okay. Very clear. Thank you very much. The next question comes from Omar Saad with Evercore. Please go ahead. Hi. Thank you. I was wondering if you could talk about, in discerning the fact that you've rolled in the Moncler Genius and the collaborations and the collections, has that affected the cadence of growth? Is there something we should incorporate into our models as we think about the trajectory, taking into account those collections flowing into the stores periodically? Omar, sorry. Could you please speak a little bit closer to the microphone, please? Sorry about that. Is this better? Yes. Thank you. Thanks. Luciano, can you talk about the Moncler Genius collections? As those have been flowing into the stores and the consumers have the opportunity to buy them, the timing of those collections, has it affected the cadence of sales growth in the quarter or this year-to-date? Is it something we should think about smoothing out across the quarters in terms of figuring out what the proper trajectory is for the brand globally? Thanks. Yes, Omar. Thank you for your question. Genius is an extremely important project for our brand. It is a communication project, a product project, a design project. It's not a project that we expect and expected at the time it was designed to develop important, significant business. Business developed by Genius Project overall is expected to represent mid-high single digit of our total business. In Q3, we have delivered several drops, several collections of our Genius project. After Fragment in June, we delivered Noir in July, then Craig Green, then 1952, Simone Rocha. In early October, we delivered Palm Angels, Pierpaolo Piccioli in the mid-October. All of these drops have been very successful. They have generated a lot of traffic in our store. The events have been very successful. You live in New York, and you may know, I think, that October 4th, when we launched our pop-up, the event was very successful. What is very important, again, the traffic generated by the events was very helpful for our overall business. Our sales have been benefiting from these events. Overall, the Genius project itself does not represent a material component of our business, and this is not what we aim it to be. If I just may add one quick thing. Genius is our new way of working, as Mr. Ruffini several times said. You will, and you should expect monthly launches over the next years. In Q4, just to remind, to recap, we have Moncler Grenoble Genius, which is going to be launched in November, and the second drop of Fragment that is going to happen in December. Got it. Thank you. That's helpful. Are you finding that the Genius project is bringing in new types of customers to the brand, or is it resonating more with your existing customers? Omar, this is a good point. What is very interesting of this project is that we saw in our stores coming more and more new customers, different typology and different age also, because some of the drops, specifically, the first one, Fragment, and one of the last one, which is Palm Angels, drove traffic of younger people, younger customers. This is something that, of course, makes us happy. Of course, we saw in our stores not only new customers but also the existing customers, also because we developed a very strong clienteling activity with our existing customers. As you know, all the different drops have a different target customer. The way we have approached our customer has been different depending on the different drop. Noir rather than Simone Rocha for very sophisticated ladies. Again, Fragment and Palm Angels, younger people, Craig Green, sophisticated men, and so on. 1952, more traditional lovers of the brand. Thank you. Best wishes. You're welcome. The next question comes from Marianne Horn with Berenberg. Please go ahead. Hi. Good afternoon. It's Marianne Horn from Berenberg. I had two questions, please. The first one, if you could give us a bit of more color on the trends that you've been seeing in mainland China. I can see the comments that you made on Golden Week, saying that it was above the performance that you saw last year, and that also mainland China was an outperformer in Asia in Q3. If there's any trends that are particularly interesting, if you could comment on that. The second is on the Americas region, which in Q3 appears to have seen a bit of a slowdown. I was wondering if you could comment on the reasons for this, if it might have been weather related, what we can expect for Q4, and any other sort of comment around that. Thank you so much. Okay. About Chinese cluster, Chinese demand has been very strong in Q3, totally in line with the first half of the year. As you remember and as you said, in the first couple of weeks of October, the Chinese demand is still very strong with the Golden Week that has been, this year, better than last year. Talking about. In mainland China specifically, the demand has been even stronger than overall. The Chinese demand has been very strong everywhere, in all the regions. In mainland China, in the local market, has been even stronger. About America, the apparent slowdown, actually, I would not talk about a slowdown. In any event, it's not due to weather, even if important to highlight the fact that weather is not particularly favorable everywhere so far. Notwithstanding the weather, notwithstanding that winter still has to come, again, the results are very strong everywhere. About the U.S., the third quarter is a quarter mostly driven by the wholesale business. In North America, wholesale is very important. We reported a very strong wholesale growth in second quarter also because we anticipated some deliveries of the current fall/winter season in June in order to meet department stores' expectations that want to receive fall/winter product earlier in the season. What makes us happy and confident is not only the amount of sales we do with the department stores, the so-called sell-in, but what is very important is their sell-out, which is very good and better than last year. This is something that makes us very happy and confident about our wholesale business in the U.S. Talking about retail. Retail was very good, growing double digit, notwithstanding, as you stated, which is correct, a winter that still has to come. Thank you so much. Thank you. Thank you. The next question comes from Elena Mariani with Morgan Stanley. Please go ahead. Hi. Good evening, everybody. I just wanted to go back briefly to the current trading question. In particular, I just would like to understand how we should think about, particularly the like-for-like development in the upcoming fall/winter season, given that there is a very tough comp base ahead. Last year, winter was very cold and very long, this year, at least in Southern Europe, it's still summertime. How can we match your very positive current trading comment with these elements, which I think we should consider when looking at the rest of the year? The second question, very quick, is about the quarter and in particular, the retail performance. Is the price versus volume mix of your like-for-like still the same? Mostly driven by volume then a little bit driven by price? The third question is about margins. I've been following you for a while, every year you keep giving cautious messages on margins, they keep going up. At the moment, I think consensus is expecting, for the full year, another acceleration. How we should think about this for the rest of the year, H2. Thank you. Okay, your first question, Helena, about the like-for-like. First couple of weeks of October are doing very well. Honestly, as you stated, Q4, we have a very tough base of comparison because last year our like-for-like was very strong also. Needless to say, but important to highlight the fact that in Q4 our sales density is already very, very high. Of course, we are very happy with the current trend, but we are also totally cautious that the base of comparison is aggressive. If I look at the consensus, I think that the implicit like-for-like in the consensus is reasonable, is something that is doable. About the growth in Q3 volume price, most of the growth comes from volumes. Volumes have been generated in our retail business by an increase in traffic, but also by an increase in conversion rate and in the units per transaction. All the key performance indicator of our retail business have been doing very well. Margins for the year end, looking at consensus, margins are not easy as usual. Honestly, considering the very strong results of the first nine months of the year and the very good current business trend in October, we are very, very positive. Perfect. Thank you. Just one quick follow-up. You're saying that in Q3, basically 100% of your like-for-like has been driven by volume. You didn't have any pricing component, or you didn't take any price action. Is that correct? Actually, not 100%. The vast majority. Let's say more than two-third. Okay. Thank you. The next question comes from Mélanie Flouquet with J.P. Morgan. Please go ahead. Yes, good evening. Thank you for taking my questions. I just wanted to maybe clarify what you meant by the Golden Week delivered even better results than last year. Did you mean it is up year-over-year, or did you mean it is faster growth than what you saw at the Golden Week last year? Just to confirm what this actually means. My second question is on going back to Genius. My impression, and that was probably a wrong impression based on your earlier comment, but was that Genius was going to be bigger than Gamme Rouge and Gamme Bleu in prior year, and therefore closer to 10%-12% of sales. You are mentioning mid-single-digit to high-single-digit. I just wanted to confirm this was right. It is much smaller than what I had anticipated anyway. Maybe Q2 and Q3 being quite small quarters, could you help us understand whether that means that Genius had an over proportionate impact in these two quarters in particular? In other words, as a percentage of sales these two quarters, what would it have been? Thank you very much. Your first question, about Golden Week. Golden Week was better than last year. It means that sales generated during that week in mainland China and in the other countries with Chinese customers were double-digit higher than last year. This is the meaning of what we meant. Genius. Genius, the comparison with the Gamme Rouge and Gamme Bleu, Genius volume base is expected to be bigger than Gamme Rouge and Gamme Bleu, even if, again, our expectations for this year and I think for next year, this is something that we don't know yet. Our expectations for this project is that the project will represent not more than a high single-digit. Okay. This is something that important to highlight. This project is doing very well in the e-commerce, in our online site, and also with the retailers. An important portion of this business can be generated by this channel. Again, overall Genius is not a project intended to develop important volumes. Your question, how much Genius may impact in Q2 of next year, I think that it's difficult to anticipate that. In any event, strategically, looking at the impact of Genius in June, for example, with the very first drop, that was a Fragment that was very successful, again, not only for the volumes, but for the traffic that collection developed, generated in our stores. That helped for sure the retail business in our stores in a month, which was June, that is not historically particularly strong. Honestly, what we expect is that in Q2 of next year, Genius may generate additional traffic and consequently, volumes, not just with the Genius collections themselves, but with the overall collection. Can I just clarify, how was Gamme Rouge and Gamme Bleu together then? I was under the impression that was already high single-digits. It was less. It was about mid-single-digit. Okay. Thank you very much. You're welcome. The next question comes from Janet Kloppenburg from JJK Research. Please go ahead. Hi, Luciano. Hi, Paola. How are you? I just had a couple more questions. First, if you could talk about the mix of the business, what you're seeing in the outerwear business, as opposed to some of the knitwear, the footwear, and the accessory business. Also, I just wanted to understand how you're thinking about the trend in China as we go forward with very challenging comparisons, how you think we should think that the sequential growth rate should unfold. Thank you. Hi, Janet. Thank you for your questions. About the other categories, we keep investing in the other categories. We keep investing in knitwear first because knitwear is doing now very well, getting better and better and growing faster than outerwear. This is because of everything we did in the past, the decision to invest in the technology, in the technicality of this category. Shoes are doing better and better, even if we started a couple of years later after the decision to invest in knitwear. We started to do last year exactly what we did two years or three years before in knitwear. We hired technical people, a new technical director. Now we are developing knowhow inside the company. This is very important, to develop a high-quality product, to become owner of the knowhow of this category, and at the end, to get the credibility on that specific category with our customers. Overall, these categories are doing well. We are encouraged by the results of these two categories. About your second question, going forward, of course, we don't know, Janet. We don't know. Even if we read newspapers we know what you do, what I can tell you, that based on our current visibility, and current means sales of today, the Chinese demand, it is still very, very good. Honestly, we are very, very happy with our Chinese customers in their local market and in all of the other different markets where they shop. Again, everything that we hear, the duty war, and about restrictions or even stricter rules on import of goods is something that I can't comment. I think that probably this fact or this specific small event has been, to some extent, over-evaluated, over-estimated. In any event, based on our current visibility, we don't see any sign of slowdown. Great. That's nice to hear. Thank you, and congrats on the great figures. Thank you. You're welcome. The next question comes from Kirillandenia with Bank of America. Please go ahead. Hi, good evening, Luciano, Paola. Thank you for taking my questions. I have two on China, please. Firstly, could you just give us an update on your Tmall shop-in-shop, which I believe was originally planned to be a pop-up. How is that performing from a sales and traffic perspective? How much contribution did that have in the third quarter? Is that planned to be more permanent now based on what you've seen so far? Secondly, just following up on that, obviously, you cut prices in China in the second quarter. Has that had any impact on demand in the mainland market? Thank you. About your first question about Tmall. Tmall, it is a very, very important project, a very, very important test now to understand the validity of this project. Honestly, based on the results, we are very happy. We are very happy. Even if volume-wise, I can't tell you that the impact of Tmall on our volumes is material. Not yet. Again, the results are very good, so we are happy so far, of course, because Tmall started just a few weeks ago. Yes. The price reduction, driven by the custom duty reduction, has been honestly very, very helpful and very healthy to further adjust our price gap with China. It's not just a matter of impact on demand, on the Chinese demand, honestly, but it's more a matter of, let's say, brand integrity, because you know that in the past, our price gap with China was very high. Now it is still pretty high. Probably we still have room for further adjustment down, but it is now much, much more reasonable also thanks to this price reduction. Great, thanks. Could you maybe just confirm what % of total the Chinese nationals make up now as a % of sales? Our % in 2017 was one third. Of course, now, considering that this year the Chinese cluster is growing faster, it may be a little bit higher this year. On retail. On the retail business. Okay, brilliant. Thank you. The next question comes from Francesca Di Pasquantonio with Deutsche Bank. Please go ahead. Yes. Hi, good evening. I have one remaining question, please, which is, given what you said about China and how the mainland Chinese trends are developing, I assume Daigou is not a big issue for you. No, Francesca, I don't think that Daigou is particularly relevant for our business. Also, something important to remember that we have set very strict rules in our stores in order to limit the amount of product that any customer can buy. Moreover, the Chinese demand was very strong everywhere, but even stronger in mainland China, in the local market. Honestly, I don't think that Daigou have any material impact on our business. Thank you. The next question comes from Paola Carboni with Equita SIM. Please go ahead. Yes, hello. Can you hear me? Yes. Good afternoon, everybody. Ciao, Paola. Hi. Ciao, Paola. I have a few questions left. First of all, if you can give us a rough idea of how much of your Chinese consumer base is represented by millennials, if possible. Secondly, if you can confirm your indication of an expected about 10% space contribution for the whole of full year 2018. Finally, as for the Genius contribution for 2019, I understand your point that you don't want these collections to account for too big % of your revenues. Would you suggest us to think about 2019 as a year when Genius can give a further contribution to grow? Or, on the contrary, once the novelty effect disappears, would you expect some normalization in the contribution of these collections? Thank you very much. About your first question, Paola. Hi, Paola. Your first question, the contribution of millennials in our Chinese. Overall, they represent about 40%. This is based on our customer database. In China, we don't have a precise number, but for sure, more. They represent more than the average. The second question was space contribution. Space contribution, yes, you're right. We still plan space contribution to represent about 10%, low double digit 10 rather than 11, more or less. No change on this. For the next year, if there is a normalization expected? In 2019, it is difficult to say. On one side, normalization, this will totally depend on our capability to develop something that is not normal. On this, we have proven to be very pretty successful. I will not talk about normalization. I would say that next year, needless to say, but important to reiterate, Genius project will be for all the year long, not only in full season like this year, 2018, but it will start also in the spring season. I think that it will be even more impactful than it has been this year. Sorry, the very last question, if I may. As far as the new categories are concerned, they used already to outperform outerwear. Would you say that this gap, so this outperformance, has expanded even further, most recently, thanks to Genius or possibly also thanks to the warmer weather? Thanks. Yes, I think so, Paola. In Genius collections, outerwear is still the leading category because it represents our DNA. The other categories, specifically knitwear and cut and sew even more, have been particularly important in these collections, and also with very good results. Cut and sew, but not only, also shoes, also backpacks. Categories on which we normally don't do great volumes. With the Genius projects, these categories have been pretty important. More important than what they normally are in our overall business. Okay. Thank you very much. You're welcome. The next question comes from Flavio Cereda with Jefferies. Please go ahead. Hi, good evening. Just three quick questions, please. First one, I was wondering on wholesale. I was looking at your wholesale number, and I understand the shift there has been in North America. Given the Genius drops and the performance of the online multi-brands, I'm wondering whether you are still closing down accounts there. Are you still rationalizing that channel? Secondly, you touched on the price gap in mainland China that was dropping compared to before. Can you be a little bit more specific, perhaps, and tell us in terms of your price architecture today, what your best estimate is of the price gap between mainland China and, say, Italy and Hong Kong and Italy, please? Lastly, just a quick reminder, what percentage of your volumes now are sourced internally, please, in terms of manufacturing in your Romania plant? Thank you. Hi, Flavio. About the wholesale. Our wholesale business overall is growing very nicely. As Paola said at the beginning of this call, we now expect and we now communicate that for the year-end, we expect the wholesale business to grow low double digits. To achieve the 10% or whatever it will be. Notwithstanding what we have been doing for years and what you just mentioned correctly, that is the continuous reduction selection of our existing customer portfolio. In some regions, more than others. In Italy, for example, rather than Japan, more than in other countries. Again, important to remember that in Italy, we used to have 1,500 customers many years ago. Now we are below 400, 350, and we keep selecting our customers. Notwithstanding this ongoing selection, we keep growing. First, because the amount of revenues we develop for the existing remaining customers is higher than before. The average volume is higher. Second, because we are developing very nicely with strong double-digit growth. Other two sub-channels. One is the shop-in-shop sub-channel. As we said before, we have many shop-in-shop, and we are planning to open other shop-in-shop. This is a wholesale sub-channel because shop-in-shops are operated by our department store's partners rather than airports, but still under our strict and close control of the business, of the way they run the business. Second sub-channel of the wholesale business is the so-called e-tailers that are growing very well, strong double digit. I am talking about MATCHESFASHION, Net-a-Porter, Mr Porter, SSENSE, Mytheresa, and all the other e-tailers players in the market. Your second question about the price gap. Price gap with China is now in the region of between 40% and 50%, let's say about a 45% average. Next year it will be closer to 40% than 50%. There will be a further slight reduction of the price gap. The ideal price gap, you know that other brands have a lower price gap. I can tell you that we aim to further reduce the price gap, but we want to do it step by step. Probably, something in the region between 30% and 40% is something ideal for the next future. As compared to what it was our price gap in the past, honestly, I think that now it is much, much more reasonable. About supply chain and sourcing. In our own factory in Romania, we develop now, in 2018, about 15% of our total needs with a target to achieve the 20% we said that at the beginning of this project. The factory is doing very well. The efficiency is getting better and better, and the opportunity to develop more volumes is pretty good. I think that next year, the percent of in-sourcing will be closer and closer to 20%. Great. Thank you very much. Thank you. Thank you. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is a follow-up from Mélanie Flouquet with J.P. Morgan. Please go ahead. Yes, good evening. Excuse me. I have a follow-up. You mentioned that you thought that consensus for the like-for-like in Q4 was reasonable. Could you share with us what you think the implicit like-for-like in consensus is for Q4, that is reasonable, please? Thank you. The implicit like-for-like in consensus, this is our own calculation, but it is in the region of 7%. Again, 7% is not easy. Okay? It's not easy, considering what I said before, the very tough base of comparison, because last year in Q4 we did very well, and also something that sometimes we forget is our sales density in Q4, which is extremely high. It's not easy, but I think that is something that we believe it is doable. Can I just confirm a follow-up link to this, probably the space growth, you confirm that your space growth contribution from new stores will be around 10% this year. In our space growth calculation, there is also the outlet performance. It's a balancing figure, right? There is a like-for-like, and there is this space growth, which is actually a lot of things in it. Do you still think that this space growth, which I take out the like-for-like that you just mentioned, will be around double digit, in the full year? Are we talking the same thing? I think so. A double digit, of course, low double digit. We're talking about 10%, 11%. This is what, based on our visibility, should be the space growth for this year, as we said in the past, and we confirm it now. This is space growth, not only from your stores, it's everything. The outlets are also in this number, right? It is the average for all the new space. Yes. Okay. That means Q4 will have a big bounce up of the space growth. If we're not mistaken, the nine months trend is around 7%. Yes, a little bit. Space growth in Q3 was not far from the number we said, the double digit. We have 9%, but that means because H1 was lower, that means that the nine months is around 7%, isn't it? Q4 needs to bounce quite a bit. Honestly, I don't understand where the seven comes from. In any event, for the year-end, we still expect the 10%, let's say 10%, or whatever it will be, not far from 10% space growth. Okay. Just the 7% comes from the fact that H1 was at 6%. Q3, even if it was close to 10%, you end up with nine months on 7% space worth contribution. Yes. You remember that in H1, actually was higher than that. This is technicality. In any event. This is what I wanted to check out, the technicality precisely. It's a question of definition. I just wanted to make sure that when you're talking about double digits, we're talking about the same number, the one that we analysts model compared to the six. Let's say that is your mind, because this technicality difference may be impacting in the short term, but in the fiscal year does not have any material impact. Again, you may remember that this difference comes from the fact that we relocated, expanded many stores in 2017 that were not comparable in 2018, but they contributed to the space growth. That's why there was this difference. But in the 12 months, the difference will be totally meaningless. Also, there is the impact of outlets. Thank you very much. You're welcome. For any further questions, please press star and one on your telephone.