Morning to all of you, and thank you very much for joining this call to present Maisons du Monde Q1 2024 Sales. I am with our CEO, François-Melchior de Polignac, Denis Lamoureux, our CFO, and Gilles Lemaire, Deputy CFO, who will be making today's presentation. It will be followed by a Q&A session. You have no doubt seen the press release we issued this morning. The conference call slides are available on our website. This call is also being audio webcast, and a replay will be available on our website later today. All listeners are reminded to read the forward-looking disclaimer on slide two. I will now turn the call over to François-Melchior de Polignac.
Thank you, Carole. Good morning, everyone. I hope you're all doing well. Today, we'll be sharing our Q1 2024 sales report. I will make a brief introduction, and then Denis and Gilles will present the detailed Q1 numbers, and following that, I will provide more insight into the Inspire Everyday action plans that we have been launching. And last, of course, we will open the floor for Q&A session. So first of all, of course, you see that Q1 2024 sales figures are down 8.1% on a comparable basis, and this is exactly what we had been expecting. These results match the assumptions of our three-year transformation plan, Inspire Everyday. You do remember that 2024 is vital year for transforming our commercial model and setting the stage for future growth. We expect to gradually return to growth in 2025, with significant acceleration in 2026.
This is why, for me, the important thing today is to go over the action plans that Maisons du Monde is implementing to achieve better success. All things have been launched, and our teams are fully onboarded to deliver on Inspire Everyday 2024, 2026 roadmap. I will just now hand over to Denis to go through the details of Q1 sales.
Next slide. Thank you very much, François-Melchior. So can we see the next slide, please? Okay, so thank you very much, François-Melchior, and good morning to everyone. As already mentioned by François-Melchior, our Q1 sales 2024 are translated as it's shown in the brief. So we can see that our sales amount to EUR 247.7 million this year, and we are down 9.5% versus last year last quarter. So we can see it's a decrease of 8.5%, and it includes EUR 4.7 million of non, I mean, discontinued store, and also during this quarter. If we go on slide six, we can see the impact of the store network.
Basically, throughout the quarter, we continued our retail store network optimization in line with our three-year transformation plan outlined last March. It's important to note that our 2026 objective of expanding our network to approximately 400 stores, with around 30% running under affiliation or franchise. At the end of March 2024, Maisons du Monde operated 342 stores, including 4 under affiliation, compared to 352 own stores at the end of March 2023. During this period, we opened three new stores featuring a renewed concept, two relocations in Le Mans and Pau, and one in Hannut, in Belgium. François-Melchior will provide further insight on this later.
So let's move now to the details of our sales performance by channel, category, and country. I'm not going to go through this line by line, but let me just share a few high-level observations. First, let's delve into sales by category. There is a notable discrepancy between decoration, which experienced an 11.4% decrease, primarily attributed to reduced impulse buying. In contrast, furniture saw a 7.1% decline, reflecting a more project-oriented purchasing behavior supported by our Rénov Déco service. However, furniture benefited from improved product availability, promotional initiatives, and flexible payment options. Second, looking at sales by channel, both in-store and online sales saw a decline, with in-store sales down by 8.4% and online sales down by 6.4% on a comparable basis. This drop was mainly due to slow consumer spending.
Marketplace sales saw growth, with Spain, Italy, and Germany showcasing local brands. Third, sales by geography highlights contrasting performance between the relative resilience in France, down by -7.5% on a comparable basis, thanks to its marketplace and international sales, down -8.8% on a comparable basis. On the other hand, Italy performed better, notably thanks to its marketplace growth and sales, and their performance in Switzerland relative to the rest of the group, has been effectively tackled through pricing adjustments.
... the point of our quarterly sales. I will now hand over to François-Melchior to present the Inspire Everyday action plan launch.
So as explained at the beginning of the presentation, our teams are fully on board to deliver the Inspire Everyday journey that we shared with you two months ago, and all action plans are really launched. I will not go, of course, through a full update of all the action plans, but just focus on a few key topics that really have to do with our customers. So in terms of the offer, we have spoken about the necessity to enhance accessibility. We have implemented price reductions on approximately 2,200 targeted products, resulting in the expected sales uplift of about 20% in quantity. This initiative is just one aspect of our commitment to accessibility. Our Inspire Everyday transformation will progressively, as you on classical promotions and more on fair pricing and loyalty.
Therefore, also, by the end of the year, we will introduce a loyalty program to enhance accessibility for our loyal customers. This program will offer rewards, exclusive events, and strengthen brand attachment, and we have been testing this broadly this term already. Second, we spoke a lot about the necessity and the value to empower our retail store network locally. Well, we have implemented a store performance tool, which provides real-time commercial performance analytics on the sales floor, enabling us to drive business more effectively. By leveraging the resources of hundreds of managers and associates who are in close proximity to our customers, rather than relying solely on remote processes from head office, we can and we are enhancing operations significantly. This action plan aligns with our Think Global, Act Local approach, representing another layer of efficiency by better leveraging local initiatives and responsibilities.
In terms of sustainability also, we are taking our first step into the circular economy with our Second Chance offering, which has already now been rolled out in all our retail stores. The initiative further boosts Maisons du Monde's brand attractiveness. Additionally, by the end of the year, we will launch a dedicated online platform to sell slightly damaged or previously used Maisons du Monde products at a reduced price and to offer repair options. We have also launched the action plan to elevate in-store experience and streamline the customer journey to provide greater inspiration. You may remember from what we said when we presented the plan, that the key insight from our customers were that our offer is great, our store staff is great as well, but definitely there would be value in delivering a simpler, clearer, more inspirational experience in the stores.
So already at the moment we're speaking, we have opened three new pilot stores, Barentin, Nirvan, Pau, in the south of France, and Hannut in Belgium, close to the town of Liège. These stores showcase a profoundly revitalized concept and a significant reduction in the assortment. The response from our customers has been overwhelmingly positive as a result of this initiative. So you should be seeing on your screens a couple of images that have here to share with you the renewed inspiration of the products, the capacity to showcase better the products and innovation and inspiration of our Maisons du Monde collections on the left. In the middle, you will have seen that we are also regrouping some universes, rather, by lifestyle, and on the right side, you will see an increased functionality in some universes.
You can see, just as one example, the lights that are regrouped, as opposed to being spread all over the stores in the standard concept. This is proving very effective to combine for our customers a reduced, more specific assortment, inspiration at its best, and yet more functionality for their shopping. Again, this is, of course, an early stage, but all signals, customer feedbacks, and of course, turnover, are proving to be extremely promising at this stage. This will be a key milestone, of course, of the evolution of our store concept and our relation to our customers. That's a key milestone. We will further improve some tiny bits of the concept and then roll it out, of course, to gain a full benefit and full speed of this huge step forward.
Now, before we move to the questions and answers, I would just like to remind you of the financial trajectory that we shared with you and that we, of course, stick to. Inspire Everyday translates into a progressive return to growth and into cash flow generation. We committed last March to achieving over EUR 100 million of cumulative free cash flow over three years, with each year contributing positively to the total, including, of course, 2024. For those who may have concerns about our financial situation, you can be confident that we are generating cash and that we will certainly continue to do so, as explained. I suggest now, with this overall brief introduction, a reminder of the key figures that we can open the Q&A session. Thank you, all.
Thank you. As a reminder, to ask a question, you will need to press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. If you are connected on the webcast and wish to ask a question, please dial on your phone and press plus... star one one, or please type into the box and click submit. We will now take our first question. Please stand by. And the first question comes from the line of Marie- Line Fort from Bernstein. Please go ahead, your line is now open.
Yes, good morning. Thank you for the presentation and for the figures. My first question is about the impact of the store closing over the year. So you publish roughly minus EUR 4-5 million for Q1. Does it mean that for the full year, we can multiply by four, these figures? This is my first question. The second question is about the marketplace. Would it be possible to have an idea about the marketplace GMV during the Q1? And last question is about the stores that have been refurbished, and also Pau, and one in Belgium. Would it be possible to have some ideas of how the sales per square meter are performing after the renovation? Thank you very much.
Thank you for your questions. I will take the last one on the renewed stores. Of course, at this very early stage, I'm remaining very careful, but I can tell you, and please take that as, you know, initial figures, that we have between 15%-30% in terms of sales growth and store sales by square meter from a couple of stores. And again, I'm sharing this with you at a very, very early stage, I'd be advised to take that into a PNL forecast.
Okay,
clear. Regarding the evolution of the GMV of the marketplace, there is a growth of the marketplace, Q1 2024 compared to Q1 2023, of 13%, 14.6% of the GMV.
So this growth comes from both topics, mainly from Italy and Spain, and it's also linked to more local vendors in this market, which is part of the Inspire Everyday plan. Regarding the-
You mentioned 13%? How do-
113-13.6.
Okay. Okay, thanks.
Regarding the store closure, can you elaborate anymore to be more precise?
Yeah. Looking to the slide, page five, I think we've got minus roughly 4%-5%—4-5 million EUR impact on your Q1 sales for store closures. I just try to anticipate what could be the impact over the full year, assuming that I don't have your closure calendar. On a simple math, can we just multiply your, these figures by four, or do you see an increasing or decreasing impact all over the year?
Basically, we cannot. It's not so easy to anticipate, because for sure, store closure are between what is forecasted and what is really the reality. There might be some impact, but yes, you can do this kind of simplified mathematics, maybe a little bit higher, maybe around more 15 than the 12 that you will arrive to. Or then 16 is, yes, multiplied by four is good.
Okay. Thank you. And just a last question, in your plan for 2024, do you expect to renew more stores? And at which speed, in fact?
Okay, so we are definitely planning to move on with the implementation of some stores. In fact, we'll do that in different ways. So first, the stores that we have been speaking about are commercial activity kind of stores, so typically 1,000-1,500 square meters in commercial areas outside of city centers. We are also going to test evolution, the concept in the other store formats, namely cities and namely commercial centers. Second part of the answer is that we are going to both roll out quick wins to many stores, and we are going, of course, to further analyze the results, primary results of those stores, to see if we can accelerate full revamping of stores by the end of the year.
In fact, you may remember that from the presentation two months ago, we said that we would clearly stick to a Free Cash Flow-only cumulative forecast, because we wanted also to keep the opportunity to accelerate on the different levels of the transformation plan whenever they would prove, you know, ready to roll out and industrialize. So that could be the case also.
Okay. Thank you.
Thank you. We will now take our next question. Please stand by. The next question comes from the line of Clément Genelot from Bryan, Garnier & Co. Please go ahead, your line is now open.
Thank you, and good morning to all of you. Just three questions from my side, if I may. So the first one, what was the big calendar effect in Q1, between one and additional day, yeah, in February, plus earlier Easter? My second question is on the price cut and the volumes. Do you see early signs of volume recovery post price cuts year to date? My last one is on the gross margin. Could you help us learn about the H1 gross margin between the price cuts, plus the add-on side of options and the freight tailwind? Thank you.
Thank you, Clément. On your question about the price cuts, so in fact, we have an average price reduction slightly above 10%, and we have an increase in sold quantities that is above 20%. As you may remember, as it's not part of the question, but maybe that's part of it, which was not expressed, we were focusing and we have been focusing on rather the entry price products, to grant the first access to customers into the inspiring world of Maisons du Monde on the, on the very first product that they can, all of them, I would say, offer. Question on the calendar effect.
Well, well, this one is very tricky. So basically, this one is quite tricky, so it's not so easy to answer of this, when the effect just, I will answer first on the gross margin. I know, but, well, no, in this topic, I ... We will not be able to answer you immediately over the phone of the effect, because globally, as you have seen, the performance is as it is, and we are focusing much more on the operational topics than on this. But let's move on on this, and we will try to answer you after this meeting.
Regarding the gross margin topic, what I can say to you is that overall, we have no big impact on this, on the gross margin, because there is both positive and negative effect on our gross margin, that at the end leads to overall stability.
And if I may add, you may remember, Clément, that what we said also two months ago, that is, that we would have a relatively stable gross margin, and that we would monitor closely all year launch in terms of the impacts, notably of potential freight additional costs, or easing of the pressure to invest progressively in customer accessibility, price accessibility.
Fair enough. Yes. Thank you.
Thank you. As there are no further questions on the phone lines, I would now like to hand back for any questions on the webcast.
Gala, you have some questions?
Yes, yes, we have two questions from Florent Laroche-Joubert. The first question is, can you please give us some comments regarding the performance in April and May, or at least the trend of the performance over the different months in Q1? And second question, how many franchise stores can we anticipate in 2024?
Okay, so April was a more difficult month than we had expected, but much better still than the Q1 trend. So we have an improving trend, and May is proving better than what we expected with, up to today, I would say, a much better trend as well. So globally, April, slightly below what we expected, May above what we expected, in constant terms, in line with our expectations, and both of them together combined, making a more positive trend than Q1. And sorry, the second question in terms of opening of stores in affiliation or franchise. So for this year, we expect rather to be still in the rollout of affiliation stores. And we expect to more than double, of course, the number of stores we have now.
Again, it's a question of potential acceleration, given the positive results that we have been registering with our partners in the five stores we opened in the second half of last year. Carol, you have no other questions?
No, no other question by in the chat.
Okay, let's maybe allow for some more seconds. Well, in that case, we will not keep you online. Just so you know, we have been talking about sales that are reflecting market conditions that are pretty much in line with our expectations. And for us, as you understand, the most important crucial part of what we have to deliver this year is to change deeply our commercial model, and to make sure that we are ready to have a powerful year that really allows us to then trigger a return to growth, while still generating free cash flow. You hopefully have on the screen the financial agenda. We will have the annual general assembly 21st of June, and the half year results 29th of July. And of course, we'll speak also in October, 23rd of October, for the Q3 sales.
Thank you very much, and speak to you soon.