MILAN — Brunello Cucinelli SpA closed the first half of the year on an upbeat note, reporting growth in profitability and revenues and confirming a positive second half, expecting to close 2018 with a double-digit growth of both earnings before interest, taxes, depreciation and amortization and profit. The namesake entrepreneur said during a conference call with analysts on Tuesday that he expected a double-digit growth in profits and sales in 2019, too.
In the six months ended June 30, normalized net profit rose 19.7 percent to 23.8 million euros, compared with 19.9 million euros in the same period last year, excluding the tax benefit from the “Patent Box” tax-relief regimen. Including this, the tax charge amounted to 7.5 million euros, equivalent to a tax rate of 22.4 percent, leading to a net profit of 25.8 million euros, representing an increase of 29.9 percent.
Sales rose 9 percent to 269.5 million euros, compared with 247.2 million euros last year lifted by all geographic areas and distribution channels. At constant exchange, they rose 11.9 percent.
EBITDA climbed 11.2 percent to 46.2 million euros, compared with 41.6 million euros, boosted by a 3.8 percent like-for-like performance, by “very good” sell-outs, and affected by the dynamics of the channel mix.
In the period, revenues in Italy were up 4.8 percent to 43.8 million, representing 16.3 percent of the total. Sales in Europe grew 12 percent to 84.3 million euros, representing 31.3 percent of the total. Sales in the North American market increased 2.4 percent to 86.3 million euros, representing 32 percent of the total. Revenues in Greater China rose 35.3 percent to 24.9 million euros, accounting for 9.2 percent of the total. Sales in the rest of the world grew 9.7 percent to 30.2 million euros, representing 11.2 percent of the total.
The retail monobrand channel showed an increase in revenues of 7.1 percent, which reached 133.9 million euros, accounting for 49.7 percent of the total.
As of June 30, the company counted 97 boutiques with just one opening in the first six months of 2018. The conversions of two Singapore boutiques from the wholesale monobrand channel also took place in June.
The wholesale monobrand channel saw a 12.4 percent rise in sales to 19.8 million euros, lifted by the opening of the prestigious Dubai Mall in the first quarter of 2018. This network consisted of 29 boutiques. The wholesale multibrand channel grew 10.7 percent to 115.8 million euros.
Investments in communication, rose by 2.2 million euros to 14.7 million euros, mainly due to the increase of digital communication activities.
Commercial investments totaled 18.1 million euros for selective openings, channeled into the enlargement and renovation of showrooms, an increase in selling spaces in luxury department stores and the enlargement of boutiques, such as the new and larger unit in Montecarlo which was opened in July and has become one of the most significant flagships for the company. Investments in production, logistics and IT/digital amounted to 7.1 million euros. The group also spent 6.5 million euros in acquiring a minority interest in its Russian subsidiary.
As of June 30, net debt stood at 44 million euros, compared with 59.4 million euros at the end of June 2017.
Cucinelli also said he was launching the “Sartoria di Solomeo” project, named after the town that houses the brand’s headquarters in central Italy, a made-to-measure men’s wear service in 25 stores with tailors aged between 30 and 35. He also pointed to the event to be held on Sept. 4 in Solomeo, which is expected to draw 500 journalists from around the world, to unveil the most recent restoration of the town, funded by his Fondazione, with a “monument to the dignity of men” he said he hopes will stand in 2,000 years.