Q1 2025 Brunello Cucinelli SpA Corporate Sales Call Transcript

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

Question: Oriana Cardani - Intesa Sanpaolo - Analyst : My first question concerns the sales in your stores in the first quarter. Could you give us some information about the scope effect out of this 12%? And then the second question, maybe it's more philosophical in nature. You confirmed the plus 10% growth for this year and so you're very confident, and there are many elements supporting this expectation, but what could the main risk be? Unidentified Company Representative

Question: Melania Grippo - BNP Paribas - Analyst : I call from BNP Paribas. Congratulations for the results of the first quarter. I have two questions for you. First, I would like to know if the growth of the retail channel in March was significantly different from the 12% which you published and if the timing of Easter somehow had an impact because Easter was in March last year? Then second question about the distribution by category. Are there any garment categories that are now weaker than others? I'm referring to shoe wear, footwear or. Unidentified Company Representative Thank you, Melania. So I will reply to your question as regards to the growth in the first quarter. Thank you for this question because this gives us the opportunity to tell us something we are really very proud about. We want to have a very even and smooth growth throughout all the geographies over time. It seems that you have asked us this question right on cue, Melania. So Easter, well, we don't believe that Easter had an influence on the timing whatsoever. And we really like this idea of uniform growth. Our roots are becoming deeper and deeper throughout all our markets. And then product categories. Well, we have 85% apparel in garment. When we went public 12 years ago back in 2012, we used to sell 85% garment, and this is still the case today, 12 years on. So we are an apparel company and ready-to-wear apparel. So in general, Melania, we can still say that we sell 85% ready-to-wear. So no major changes in this regard and rightfully so, you say. So what we did was to keep our promises. We are a sound and steadfast company. And as we said earlier on during the morning, we will try and make sure that our new buildings are up and running as quickly as possible because when you got full control over your production, then it means that as of tomorrow, you can change your manufacturing planning schedule in the blink of an eye. So this gives you a lot of flexibility. So it has already happened to us that it was necessary to work on Saturday morning. We did that. No problem. Because that means that we will derive some benefits, we'll be more efficient, we will stay more focused. When it comes to lifestyle, if you work a bit harder, maybe the jacket looks even nicer. And your visual activities will also be more successful. So when the going gets tough, human beings give their best. And earlier on in the morning, we had the mid-day holy mass for Easter. We had the Bishop here. So that was really very nice. And respect is always written in capital letters here. So we really have a winning card up our sleeve, which is respect and which is focus. Thank you, Melania.

Question: Natasha Bonnet - Morgan Stanley & Co LLC. - Analyst : Congratulations on the good results. I've got two. Just first, within Asia where you had 11% growth, did you see any differences by countries within Asia? And can you tell us more about the performance in China, where I believe you're significantly outperforming peers? And anything your local teams are telling you regarding the outlook for the market? And then my second question would just be, you mentioned you still see opportunities for your brand in the future. Can you just develop on this? Are you looking at further category expansions or any markets to call out? Unidentified Company Representative Luca, over to you first.

Question: Adrien Duverger - The Goldman Sachs Group, Inc. - Analyst : So my first one, could you please comment on the resilience from the higher spending cohort? Have you seen an increase in the proportion in your sales in the beginning of this year compared to last year? And if so, have you seen any difference between geographies? And my second question would be on the wholesale channel. How is the confidence across your wholesale partners? And how would that compare to when you last spoke to us, I guess, before the different tariff announcements? And if you can also comment on the order book and if there are any timing issues that we need to be aware of? Unidentified Company Representative So I will start from the last one. Order book timing, nothing, because we closed the sales a month ago, so everything is fine. So we actually find that there is -- in the wholesale channel, there is an extreme attention and care on the brand and on the relationship. You should consider the multibrand accounts are very much -- they have a very strong relationship to the final customers. Then the high-end cohort, in the past four months, we did not see any difference. We have just over 400,000 customers altogether, so not many. But also with all the events that we organized across the year that I met them in Monte Carlo the other evening, you see my take on the high-end clientele is that they want to perceive a great atmosphere. You see, I myself, I'm quite a wealthy man. It does not really change anything with everything that is going down. But what I don't like is I don't like the mood, the atmosphere that is a bit more glum, that is a bit more sad. It's just a question of atmosphere and ambience, I would say. There is still a lot of openness and desire for good taste and lifestyle. Now they step into our stores, and they really want to receive tips on their total looks, especially menswear. Especially menswear because, you see, men, they really -- sometimes, they need some tips. Whenever they walk out of our stores, they want to be 100% sure that if they wear that kind of suit at that event, they will feel better.

Question: Charles-Louis Scotti - Kepler Cheuvreux - Analyst : I've got only one. It's a follow-up question on category expansion. It seems that you are placing a greater emphasis on leather goods, particularly with the recent launch of the BC Duo bag. Could you share how this category is currently performing? And how significant do you believe the opportunity is for your brand within this highly competitive handbags segment? Unidentified Company Representative So as I told you before, we still have 85% ready-to-wear and then 15% accessories. We are a ready-to-wear company. Of course, we curate our bags and our shoes and our accessories, but we can't say that anything has changed in terms of adding loads of bags or footwear. We are a ready-to-wear company, 85% is apparel. And then we have bags, accessories, handbags, and footwear. They are there to complement the taste and the identity of the brand. But nothing has changed in terms of percentages. Please, because I want this to be pretty clear because everybody tends to believe that it's very easy with accessories, it has no size, and so you make more profit if you just focus on accessories. But the identity of a brand can only happen through ready-to-wear. This is the truth. And the prize, the award that we will be bestowed upon on December 1 and the previous honoraries were Miuccia Prada and others, Tom Ford last year, if I'm not mistaken. You see, you are awarded because of your identity and taste. And the only thing that we know for sure is that we should never compromise on our identity. We must be very strict. Then of course, we curate everything that we do. We organize the whole event to present a bag, but nothing changes. This is very important. And the good thing is that at this event, too, we told the story of Camilla and Carolina, how they work together. There is always a lot of attention to the value of family because by nature, luxury is always associated to a family and we have this advantage. So far, all of us, we are all working there at the company. My wife works with the activities in the Hamlet and the rest is working in the company. All the members of the family are involved and also working at different positions in the company. It is easier because -- so that you argue less because one deals with menswear, the other with womenswear, advertising. So we are pretty serene. The only thing we need to be concerned about is -- well, although this morning, what we heard from our Board member, Ramin, about America and the tariffs, it seems that there's only a 1% impact on the high-end bracket. They say that the profit gained by the wealthy in the last three years, they would need a 50% drop in the stock exchange in order to lose all the earnings they have heaped in the past three years. So of course, we don't want to shout this out because it's not nice towards those who are actually struggling because of the tariffs. (inaudible) Unidentified Participant My question had already been taken. But again, I would like to ask it anyway. So could you give us some information about the timing for the openings last year and this year? Unidentified Company Representative Well, nothing has changed. Nothing has changed. So the plan for opening new stores chugs along as foreseen. So Vienna will be opened by the end of May. And then we will have important relocations and alignments in Geneva and Paris. And Abu Dhabi, Macau and Vancouver, new openings. This is our plan for new openings and relocations and expansions for 2025. And the progress in our building sites, so to speak, is in line with our expectations. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 16, 2025 / 3:45PM, BCU.MI - Q1 2025 Brunello Cucinelli SpA Corporate Sales Call When we say that there are rosy prospects, this is what we mean because you need to find the right location if you want to open a new store in a major metropolitan area. And you don't immediately find everything immediately. And now we already received some proposals a bit ahead of time. So we are always looking for the right opportunities. We don't really want to increase the number of new openings by double every year. No, that's not the case. We, once again, rely on very healthy growth. That's for sure. If growth is too much, then it means that the brand will suffer. So we're just trying and making this happen. Unidentified Participant And could you also give us some information about how many openings there were last year? I think that in the second half of the year, you had a higher number of openings, if I'm not mistaken. Unidentified Company Representative Yes, just one year ago, we opened up the store in Miami, and then the other openings took place in the third and in the fourth quarter of the year.