Full Year 2024 Brunello Cucinelli SpA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrea Randone - Intermonte - Analyst : Thank you very much. Good evening. Your presentation is always very rich in details. But I'd like to go back for a second to the United States. Some players said there is some volatility on the market, which doesn't necessarily mean a negative impact. But I'd like to know whether you noted some volatility, too. Second question about the US again. I'm thinking of what the Wall Street Journal wrote about Sachs. They asked for different payment terms for longer payment terms, in particular, you've shown numbers that are totally under control from this viewpoint. So I'd like to know how you manage that? And my third question more generally is about taste. You are particularly good at understanding people's taste. This is actually at the core of your business. So at this time, there are -- so full of surprises, at least every single day, we actually see eventful changes. I'm wondering whether that is also mirrored by any kind of change in taste. Do you see any new trends emerging? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 5:00PM, BCU.MI - Full Year 2024 Brunello Cucinelli SpA Earnings Call

Question: Oriana Cardani - Intesa Sanpaolo - Analyst : Good evening. Thanks for receiving my question. I have one -- first question about the order collection for fall/winter '25. So you said collection -- order collection is good and well balanced within the three main geographies, Europe, America and Asia. So I was wondering inside Europe, within Europe. Is it a well-balanced distribution here again? Or do you have some European markets that I may be showing some signs of slowdown, whereas others are more brilliant?

Question: Oriana Cardani - Intesa Sanpaolo - Analyst : Absolutely. Thank you. I have a second question, if I may. On the launch of the six new fragrances you did in November. Also in quality terms, how are they performing? Did you notice any results?

Question: Melania Grippo - BNP Paribas - Analyst : Good evening, I have one question on the gross margin, it increased by about 200 bps. So can you give us more details on -- how much of that is due to vertical integration and how much is due to the value mix in channels? And what can we expect for 2025 in terms of its improvement? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 5:00PM, BCU.MI - Full Year 2024 Brunello Cucinelli SpA Earnings Call

Question: Melania Grippo - BNP Paribas - Analyst : Thank you.

Question: James Grzinic - Jefferies - Analyst : Good evening, everyone. Good evening, Brunello. Congratulations on your fragrances. I did try Brezza Gentile it's fantastic. I love it. What that's a sponsorship isn't it. Yes, it sounds like it. Now I have a simple question. It's a bit philosophical perhaps. Now if we think of this three-year investment plan to expand production capacity from '24 to '26, and we still have the capability to expand operating margin in a well-managed way. So once the -- we've laid the foundations for local expansion of production. Can we possibly think of having more leverage on operating margin?

Question: James Grzinic - Jefferies - Analyst : So should we have a higher profit, don't you think we could increase prices by 10%, 15%?

Question: James Grzinic - Jefferies - Analyst : Very clear and consistent.

Question: James Grzinic - Jefferies - Analyst : Thank you.

Question: Chris Huang - UBS - Analyst : Hello. Hi. Thanks for taking my question. I have three, if I may. So the first one is just on your currently Q1 trends. I mean you commented that you're very satisfied with the performance so far. But if we look at the different channels, starting with retail, can you just give a little bit more color on whether or not the channel is still growing double digit? And moving on to wholesale, you had, of course, a very strong Q1 last year. So just trying to think about what kind of level of growth should we expect for Q1? That's my first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 5:00PM, BCU.MI - Full Year 2024 Brunello Cucinelli SpA Earnings Call And secondly, coming back to the US I just wanted to confirm, are you seeing any signs of weakness and perhaps the traffic in the US or the mood in the US consumers. I'm asking this, because I would imagine the high-end consumers are very sensitive to the stock market in general. And as

Question: Chris Huang - UBS - Analyst : Okay, thank you. Have a good evening.

Question: Natasha Bonnet - Morgan Stanley - Analyst : Hi, good evening. Thank you for taking my question. The first one, just on China. I mean obviously, you outperformed the market last year and you had a big event in October 2024. Can you tell us what your teams on the ground are telling you regarding brand momentum of Cucinelli in China? And where you expect the incidence of China could be in the next two to three years? And then my second question would just be, if the US were to impose tariffs on EU imports, do you believe you could offset that fully with pricing. Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 5:00PM, BCU.MI - Full Year 2024 Brunello Cucinelli SpA Earnings Call

Question: Adrien Duverger - Goldman Sachs - Analyst : Hi, good evening. Thank you very much for taking my questions. So the first question would be on the wholesale channel. Could you please comment on the confidence level across the wholesale partners and how you would compare this compared to when you last spoke in January? And could you also please comment on the order book and if there are any timing issues to be aware of in 2025? And my second question would be with regards to your manufacturing investments. So thank you very much for all the comments on the progress regarding the new facilities and the construction. If I understood correctly, we should expect most of them to be completed between August 2025 and in 2026. And I was wondering how do you expect the additional supply to evolve over the next three years given the progress on the construction? Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 5:00PM, BCU.MI - Full Year 2024 Brunello Cucinelli SpA Earnings Call

Question: Paola Carboni - Equita - Analyst : Good evening, Brunello. So I have one question on the pricing increases, which you said is going to be 3.5% this year. So can you give us a comment on what you expect in terms of mix? Which I think will be added to that price increase. Then I have another question on the expansion of production capacity. So could you please remind us of the mix between in-house production and outsourced production today? And is that going to change? As you progressively expand your in-house production capacity and on a steady-state basis once you get to the end of your projects? For wholesale, I have a technical question. The fourth quarter was slightly weaker. So should we think that deliveries are going to be concentrated in the first quarter of this year? Maybe that is partially where the first quarter is particularly strong. And then speaking of the first quarter of 2025, again, I think the idea is that we're obtaining a very well balanced growth in the three main geographies. Normally, we are used to see that North America and APAC grew more than Europe in this part of the year. So are you also looking at well balanced REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 5:00PM, BCU.MI - Full Year 2024 Brunello Cucinelli SpA Earnings Call growth for the whole group, do you think there's an extra contribution from wholesale in this quarter? Or looking at retail, Europe is picking up speed and falling in line with the growth rates of other geographies.

Question: Paola Carboni - Equita - Analyst : What about growth in different geographies?

Question: Paola Carboni - Equita - Analyst : May I ask a follow-up question? Can you comment on three, four points of increase from the mix? What kind of products are becoming more peculiar and popular? Is it menu or network?

Question: Paola Carboni - Equita - Analyst : Thanks a lot.