Brunello Cucinelli reports strong earnings despite significant decline in luxury goods

Diving overview:

Reported by Brunello Cucinelli. Preliminary unpaid revenue of 1.27 billion eurosThe company’s fiscal 2024 revenue will be about $1.3 billion, representing a 12.2% year-over-year growth, according to Monday’s financial report.
In the same period, sales in the Americas increased by 17.8%, sales in Asia increased by 12.6% and sales in Europe increased by 6.6%. Retail sales increased by 14% compared to the previous year, and wholesale sales increased by 8.8%.
The company expects revenue to grow by about 10% in 2025 and 2026, with “a very positive and important period for the brand, the high quality of sales over the past year, and a very strong start, resulting in a healthy and healthy start to the year.” It is expected to deliver “balanced profits.” 2025. ”

Dive Insight:

Includes many high-end companies. LVMH, kering and RichemontWhich Report earnings later this weekis suffering from financial deterioration as the sector continues to slump. However, other companies, e.g. prada group and hermes Like Brunello Cucinelli, it has recently recorded double-digit revenue growth.

This difference may have something to do with how Quiet Luxury’s customer base approaches the company’s preferred brands. The category’s resilience is driven by its appeal to loyal, affluent customers who prioritize intrinsic value over fashion-driven consumption, said Third Bridge analyst Yangmei Tan.

“Hermès’ success during past economic downturns demonstrates the model’s enduring strength, and Brunello Cucinelli is following a similar path,” Tan said in emailed comments.

In Monday’s earnings call, Brunello Cucinelli, the company’s chairman and creative director, said the positive revenue was due to customer loyalty and the brand’s unique position in the luxury market.

“This year has been particularly meaningful in strengthening our style and identity, firmly rooted in the concept of absolute luxury characterized by exclusivity, quality and craftsmanship,” Cucinelli said. spoke.

Mr Tan said the company’s cross-generational relevance has given the quiet luxury brand stability and longevity, with pricing strategies keeping pace with leading luxury brands and helping it build relationships with affluent customers. He added that it was helpful.

Cucinelli said the company is looking to build deeper connections.

“During this time of year, which we call back-to-school, we launched an internal project called Project for the Soul. It is about listening to each other and supporting each other, especially when unwelcome guests arrive. “It’s a simple matter of living and working. What might be called a ‘sickness of the soul’ has become more pressing and taxing,” he said. “In such moments, talking and active listening may help heal the heart.With these assumptions, considerations, and reflections, we believe that in both 2025 and 2026, , we envision healthy and sustainable revenue growth of around 10% with balanced margins.”

Brunello Cucinelli says that early reactions to its Fall/Winter 2025 Women’s Pre-Collection have been positive, “coupled with its exclusive position and promising prospects in all geographic regions and sales channels”, and that Brunello Cucinelli has It added that it aims to double its sales by 2030. .

“Unlike LVMH and Kering’s more diversified mass-market strategies, Cucinelli’s relationship-driven approach can avoid the potential pitfalls of diluting exclusivity to gain market share,” Tan said. said, adding that Brunello Cucinelli’s decision to expand its own production makes this possible. This is to protect artisanal traditions while optimizing margins. ”