Brunello Cucinelli Reports Strong 2022 Profitability, Sales Growth – WWD

MILAN — Brunello Cucinelli raised sales growth estimates for his namesake company in 2023 to 15 percent from 12 percent, in light of “the excellent first quarter and excellent fall orders.”

The year 2022 “was one of high inspiration, of consistent growth, but above all of striking recognition of our brand for its identity in style, craftsmanship, exclusivity and in the way it presents itself with respect to Creation,” said Cucinelli during a call with analysts on Wednesday, as his company reported a net profit that soared 54.9 percent to 87.2 million euros, compared with 56.3 million euros in 2021.

“We view this year 2023 as the beginning of a new time, animated by the awakening of great values and ideals, and perhaps it is time to come up with up-to-date solutions for blue-collar workers, restoring moral and economic dignity to the craft trades, our Italy being a manufacturing country that is well-loved by the entire world.”

Confirming preliminary sales figures reported in January, sales in 2022 climbed 29.1 percent to 919.7 million euros, compared with 712.2 million euros in 2021.

With the year 2023, Cucinelli marks 45 years of his fashion company and is kicking off a new five-year plan running until 2027. He said revenue growth of around 10 percent in 2024 “is reasonable.”

In 2022, sales in Italy rose 22 percent to 102.7 million euros, accounting for 11.1 percent of the total.

Revenues in Europe, excluding Italy, rose 20.4 percent to 263.8 million euros, representing 28.7 percent of the total.

Sales in the Americas jumped 40.5 percent to 334.7 million euros, representing 36.4 percent of the total, confirming the strength of the market for the brand.

Revenues in Asia increased 28.1 percent to 218.4 million euros, accounting for 23.8 percent of the total.

Cucinelli said by 2027 he hoped Asia would represent 35 percent of sales, the U.S. 30 percent and Europe 35 percent.

In the 12 months ended Dec. 31, earnings before interest, taxes, depreciation and amortization amounted to 266.4 million euros, up 37.8 percent compared with 193.3 million euros in 2021, with a margin of 29 percent on sales.

Operating profit totaled 134.4 million euros, up 74.5 percent from 77 million euros in the previous year, with a margin of 14.6 percent on sales.

Retail sales rose 36.6 percent to 573.3 million euros, representing 62.3 percent of the total.  The company opened five new boutiques for a total of 119 units in 2022, and converted shops in luxury department stores to reach 42 from 31 in the past two years.

A Casa Cucinelli will open in Hong Kong this year — the sixth globally — and three stores are in the pipeline — in Chengdu shortly, followed by Dubai in April and Miami in October or November. A relocated boutique in Rome’s Via Condotti will open at the end of the month.

In 2022, wholesale revenues rose 18.5 percent to 346.3 million euros, accounting for 37.7 percent of the total.

“I am convinced we will see very many new multibrands in Korea and China in the next five to 10 years,” said Cucinelli, noting that the Chinese now are seeking “special, no-logoed” designs.

Chief financial officer Moreno Ciarapica said preserving the company’s structure and organization through the pandemic as well as its planned investments paid off. In 2022, investments totaled 72.5 million euros and Cucinelli also acquired a 43 percent stake in Lanificio Cariaggi Cashmere, the brand’s storied cashmere supplier, for 15 million euros.

Investments in communication amounted to 52.2 million euros, compared with 36.1 million euros in 2021, and mainly related to hospitality events and activities with customers in the boutiques, in the spaces of the Casa Cucinelli, and during visits to the medieval village Solomeo, where the company is based.

Responding to a question about the launch of a fragrance, Cucinelli admitted, “We are very close, we’ve been working on it for a couple of years and the idea is to do it with an Italian company owned by a family that has an important business, is not listed, and reports sales of around 700 million euros.” He refrained from naming the partner.

Cucinelli also sees strong potential in menswear. Around 85 percent of revenues are still derived from ready-to-wear, he said proudly, which helps “define the taste of a brand more than accessories.”

Throughout the call, he reiterated his pride in being the recipient of the Neiman Marcus Award for Distinguished Service in the Field of Fashion.

Last year, Cucinelli began working on the redevelopment of the 8-hectare area on the outskirts of Solomeo, which will allow for the gradual expansion of the company.

He highlighted the importance of “fair profit, which also emphasizes proper recognition of the central value of those directly involved in manual labor and for this reason, an extraordinary wage supplement was introduced last year, in order to alleviate inflationary pressure on non-managerial employees. To further reward the valuable work of our employees, at the beginning of 2023 we decided to implement a structural salary increase.”

As of Dec. 31, net debt stood at 7.1 million euros, further improving from 23 million euros at the end of 2021.

A dividend of 65 cents per share will be paid this year.