Good evening, and welcome to the presentation of the nine-month results 2026 of the fashion house Brunello Cucinelli. Speakers will be Brunello Cucinelli, who is the Executive Chairman and Creative Director, Luca Lisandroni, CEO, Riccardo Stefanelli, CEO, Dario Pipitone, CFO, Moreno Ciarapica, Co-CFO Senior, and Pietro Arnaboldi, Investor Relations and Corporate Planning Director. In order to receive help from an operator during the conference call, please press star followed by zero. Now I'd like to give the floor to Brunello Cucinelli.
Good evening, and it is really a pleasure to see you. We have installed new microphones, and hopefully that is working. It is working properly. Thank you very much. Analysts, investors, journalists, there's always all 10 of us here around my table to provide you with the results of the first nine months of the year.
Being mid-October already, this call basically provides with the results of the end of the year. This is how the call will run. I will read out the headline figures. Luca and Riccardo will give you a worldwide overview of the markets, also with updates on Callimacus, that we received the green light from the government, and that we have started this great project together with Marc Benioff. I will take the floor back with expectations for 2026. We will also provide you with quite good visibility on 2027. I will tell you about the conclusions we drew after the two days we spent together in early October when we basically gathered and tried to understand who we are, in which market we are present, and how we operate, and what the great fundamentals of our fashion house are.
Now let me read.
The first nine months of the year closed with very, very positive results, which allow us to raise up again our estimates for 2026, moving from an expected +10%-11% to a forecast revenue growth of +12% at constant exchange rates. Revenues of EUR 1.123 billion, up by 13.3% at constant exchange rates and 10.2% at current exchange rates. Third quarter revenues, very important, EUR 374.2 million, up by 13.5% at constant exchange rates. The retail channel revenues of EUR 741 million report an increase of +19% at constant exchange rates in the first nine months of the year. Significant growth was reported in every quarter of the year, about 17% at constant exchange rates in the third quarter, with double-digit increases across all geographies.
The wholesale channel, with sales of EUR 382.6 million, confirms a consistently very sound result, +4% at constant exchange rates as of 30 September 2026, +7% at constant exchange rates in the third quarter. Very positive performance across all geographies. Sales at constant exchange rates of +20% in the Americas, +7% in Europe, and +14% in Asia, with a significant contribution coming from China. Sales of the fall/winter 2026 men's and women's collections currently in stores are very positive. Spring/summer 2027 collections. The men's and women's order taking campaigns are complete, both with very extremely positive results. We gathered particularly favorable comments from our sales teams, from our multi-brand clients, as well as from the international press at Pitti Uomo, the trade fair, last June, as well as at the recent Milan Fashion Week for women last September.
Our positioning in the absolute luxury segment and the pleasant atmosphere that we continue to feel around our brand allow us to look with confidence to 2027 as well, a year in which we expect healthy, balanced revenue growth of around 10%. Next week in Tokyo, Shanghai, and Hong Kong, the important premieres of the documentary film Brunello: The Gracious Visionary, will take place following the great appreciation it received in Rome first and then New York and Paris. During the Shanghai event, we will also open our Casa Cucinelli there in a captivating historic residence from the late 19th century in the city. It is really a splendid city. Next week we will be traveling across the eastern part of the world.
At the beginning of November in Solomeo, we will host the second edition of La Paulée, a prestigious biennial gathering that brings together some of the most important wine and champagne producers and collectors in the world. It is a relevant event for us and also for Solomeo, which will give us the opportunity to welcome guests of international standing and to share with them the atmosphere and values that animate our village. If you have two spare days, please do join us. Now, let me read out what I wrote. The first nine months of 2026 ended with a revenues growth of 13.3% at constant exchange rates, and we consider this result to be very pleasing. We believe that the brand's image around the world reflects what we have always aspired to, a belief in absolute luxury, with no logo absolute luxury.
We think of a brand that stands for authenticity, style, familiarity, and simplicity, where the product is the fruit of exceptional craftsmanship, quality, creativity, with a contemporary sensibility and a strong sense of exclusivity, the latter being of paramount importance to us. We also feel that ours is not a mass-market notoriety or renown. The family's stewardship of the brand allows us to take a longer-term view with the enduring hope of maintaining a sound and well-earned reputation and ensuring that the brand continues to thrive for decades to come. In light of these considerations, as the year draws to a close, we expect healthy revenue growth of around 12% in 2026 with constant exchange rates, together with a sound level of profitability.
Following the excellent performance of our Spring/Summer 2027 menswear and womenswear collection and the highly favorable reviews from the press during the Milan Fashion Week last September, we envisage healthy growth of around 10% for 2027 as well. Now it will be up to Luca and Riccardo to give us a worldwide overview.
Well, very well. Ric, let me start. I have to say that we have closed the first nine months of the year very well indeed, as we have these first 15 days of October. You see, the results achieved and the information and feelings that we have regarding the last quarter of the year have led us to a second revision of our estimate, always guided by the desire to share our expectation with you promptly and punctually. The growth has been distinctly regular, steady, and continuous, as the figures themselves demonstrate.
In Q3 too, we are actually growing by 13.5% at constant exchange rates, perfectly in line with the results of the first 6 months. Even when we actually look at absolute values and no longer percentage ones, we can actually realize that the contribution to growth of each quarter at constant exchange rates has been entirely comparable. Therefore, we attach very great relevance to this growth. We attach a still greater value to two of its features that make this growth even sounder and more robust. On the one hand, we have its linearity over time, on the other hand, we have its spread across geographies and sales channels. This increase, the raising of the estimate about 2 points compared with the start of the year, rests on two reasons.
On the one hand, the actual advantage achieved in the first nine months of the year, then the great confidence with which we look to the last quarter. As to the nine months, we have delivered three quarters all slightly above our expectations, thanks to four protagonists, we may say. Retail, our online boutique, then geographically speaking, North America and China, then obviously, the strength of our collections. The advantage gained is ascribable to the retail channel in a balanced way between the organic component and the contribution of the new stores and new spaces. In the stores, both the number of customers and the average spend of existing ones are growing, thus reinforcing our conviction that we have a network that is still very young, which has ahead of it both ample room for healthy organic growth and also further scope for expansion.
Very good results for the physical stores and excellent results for our digital boutique. As you know, our online boutique accounts for about 6% of our sales. You see the image of the brand, of the collections becomes really fundamental there. We see this thanks to the increasing number of customers who step into the store showing pictures they have seen online. We have to say that Callimacus was truly instrumental here. I would like to update you on this project. First of all, as Luca was saying, results we are delivering, we are pretty satisfied, not just for the economic results, but also for the quality of the traffic. The traffic is steadily increasing, and the visitors tend to stay there twice as long as before.
This actually proves that our customers are looking for something very specific, elegance, quality, contemporary style. A lot of tips and a lot of advice is asked for during the whole stay and on the website. On the other hand, the great invention
But it is somehow another kind of business for us. We are happy to announce that on September 28, Salesforce, you all know this company, and with whom we enjoy not just a business or professional but also personal relation with Marc Benioff, they officially entered the business. They have taken upon themselves the development and the growth of this invention of this project. We have entrusted them with it, and we are very pleased that a great company such as Salesforce decided to invest in this project, not just for the novelty and the innovation brought about by the platform, but also because of this balance between manual skills and visual together and technology.
Besides, we are very happy to note that Microsoft, a few days ago, taking inspiration from us, decided to call it the Human Super Intelligence, which for us is a confirmation of what we have always maintained. The government not only authorized but also sent a letter where they actually congratulated us on this deal. Let's go back to physical for a second. All geographies have given a positive contribution to the nine months growth, including the Middle East. In the last nine months, it's been slightly positive, thanks to a great start in the first month of the year. Here we have to get accustomed to the idea that every year something may happen which is out of our control and may actually set us apart from our expectations. At the beginning, we thought the Middle East would give us a good contribution.
It's still a young-ish area and geography for us, and it holds great expectations for us. We also have to say that the American market was even more favorable than we originally expected it to be. Actually, a good part of the extra performance comes for us from the U.S., where in the first nine months of the year, we grew by as much as 20%. In the third quarter, we kept growing at 19% at constant exchange rates again. The performance here is really, really good. Then this beautiful expression is absolute luxury is growing in America, and not only in terms of width, but also in terms of depth. We believe that authentic luxury is becoming more and more rooted in the lifestyle of many American customers.
As to department stores, they're still really important in the American market, and everything continues really well for us with the Exemplar Luxury Group. There's full mutual satisfaction about the results, and we're growing in each of their three banners, Neiman Marcus, Saks Fifth Avenue, Bergdorf Goodman, and within each banner, both men's and women's are growing. Positive results have been posted for all three quarters, and we had no problems on payments. They were perfectly punctual at all times. We can also confirm that for winter 2027, we will extend the men's and women's locations at Bergdorf, which we believe remains one of the most prestigious and most beautiful luxury stores in the world. Now from the west, let's move to the east. We are just as happy with the results of Asia and China in particular, which maintains a fine growth trend over the previous quarters.
About 14% of our global sales were posted from Asia, from this region with a quiet and gradual and constant growth in market share. The Golden Week was very successful in all territories, in all geographies, and we were discussing this with Pietro. One year ago, we said our brand seems to be experiencing a wonderful springtime in China. One year later, with a revenue base which is more significant, we seem to perceive the same freshness and to see the same excellent opportunities. We should remember at all times that we are specialized in ready-to-wear and clothing at a time when the appeal and interest in this category is very high and growing. We are protected and favored by our size, starting with that of our notoriety. Brunello, in his quote, says that we do not seem to have mass notoriety, not China, and hopefully will continue like this.
We can certainly benefit from the fact that many new customers have kind of discovered our brand. There is a lot of attention towards us, a lot of magazine covers were dedicated to our brand because of positioning, image, but also because of the values we speak of. When you are a dedicated magazine cover, that means the product is a top trend. There is a beautiful expression in Chinese tradition that says, flowers in the spring, fruits in autumn. We do trust really that the perseverance and the spirit of protection we have used in working in this region will truly bring us very good fruits for the future. Even today, we are very happy to celebrate the opening of Casa Cucinelli in Shanghai and the extension of the Plaza 66 store, which is going to be completed before the end of the year. Finally, Europe.
We believe it is solid and strong. Once again, the domestic customers are fundamental for the European market. We are closing the best quarter as a percentage and in absolute terms for the whole year. We just completed the extension of the Geneva store, and I would like to point this out because we actually carefully look at balancing investments carefully to obtain a well-balanced retail network across different continents. Finally, as far as the products are concerned, the first part of the year was marked by a very successful summer collection, and we can say the same about the winter collection, which is now in stores. We received very good feedback when we presented the collection to journalists, and we received very good feedback from our in-house buyers and the multi-brand clients. Now we see the appreciation from end customers, too.
We see it in our own DOSs, and we see it in the wholesale channel, too, which have already received numerous reorders. It is good. It is important for us to underline that in these first nine months, growth is entirely comparable and fully balanced between men's and women's. As to the good health of sell-out, as Luca said, we need to thank all of our collaborators who, this season too, enabled us to deliver the winter collection, which is currently in the stores, with very interesting punctuality and a degree of craftsmanship that gives tribute both to the capability of our creative teams to come up with these products and to the artisans who make them. We now stand at about 70% manual work in our constructions, and this is really important.
Once again, I would like to point out that this capability is the outcome of the direct relationship we have with each and every one of them. We work with 400 artisan workshops that represent 9,000 individuals, 9,000 artisans. We had the first general meeting on September 18. We met them, we shared work plans for next year with them because actually our plans will be their working orders, too. We shared with them the main challenges that concern us all, such as the fair pay workplaces and the transmission of artisan know-how, which is fundamentally important for us. Here, once again, we still believe that the schools of style and hard craftsmanship at Solomeo are extremely important to us. Both are the main sources from which we draw to secure those manual skills and capabilities which are so precious to our customer, not at our fashion house.
Back to products and to Luca's comments. We all know that in every collection it is really important to have a fair balance of colors, shapes, and most importantly, weight and temperature to follow the needs and requests of customers that are really located all over the world. This is precisely one of those issues which we discuss and we bring up with multi-brand customers. Their contribution is very valuable because they understand individual places and customers, and so this allows us to design our collections better and to decide what we should do in our own direct stores, too. Let us now talk about exchange rates. In the third quarter, the currency effect was still negative by a couple of points. But despite that, we successfully grew by 11.7% current exchange rates in this quarter and 10% over the nine months.
For the fourth quarter, we still expect a slightly negative currency effect, which should mean that the exchange rate headwind should be about 2.5 points by the end of the year. Let us now look at the last quarter. Many of the pieces of evidence that we have presented so far support our confidence for the last part of the year. Last year, in the last quarter, we grew by about 15% in retail and achieved the best results of the 12 months. Despite this, we are still confident that we can achieve beautiful organic growth fully in continuity with the previous months. The lesser specific weight of the new openings in the second half of 2026 has already been reflected in our guidelines.
We believe that today we are in the best possible conditions to complete this year as we imagine it, with beautiful growth of 12%, and we can plan concretely for a healthy growth of 10% in 2027 as well. Let me say a couple of quick things about what Brunello said earlier. The movie. We are very happy with how the film is being received. The latest premiere in Paris generated a really moving atmosphere. Next week, Brunello will be traveling to Asia, unfortunately, Brunello said. The premiere cycle is going to be completed in December with another preview to Hollywood in L.A. Actually, we would have loved to go to the Middle East and Russia, and we are planning to go there as soon as it is feasible.
Just to give you a piece of information on the Italian market, the movie has been made available by the Sky platform in Italy last weekend. It is now available on the main British platforms, too. We are receiving very beautiful comments, not just from our clients, but also from people who are less familiar with the story of Brunello. We believe that since Tornatore is the Director of the film, this is the best way to tell the world about ourselves and our business for those who are not familiar with our company. It is also a really powerful tool for our people to really source motivation from what they see in the film of our way of doing business, and it should serve as a daily inspiration for their work and their daily behaviors too.
To say something else about the movie, it was translated in eight languages and subtitled in nine other languages. That is quite a good achievement. Watching a movie in your own language will actually make a difference. We also prepared the translation of the movie in Arabic and Russian, and hopefully we will be able to use it as soon as possible.
Now let me say a couple of things about the forecast for next year. After hearing from Luca and Riccardo, as we said, we think we will grow by 12% by the end of the year over 2026. The EBIT margin is expected to be around 17%, up from 16.8% last year. Investments should be around 6% by year-end.
Please remember, do not think this is a low figure, because when we speak of investments, for the next three years we will always be around 6%, because for the next three years we are not going to have to make any further industrial investment because that is what we did in the last three years. However, these investments on production are likely to give us a healthy and sound safety network for the next 10 years at least. Production is very important for us. Net financial position is expected to shift from 14% of revenues last year to about 10.5%, so from EUR 188 million to around EUR 160 million. That was 2026. As to 2027, these are forecasts, but reasonably concrete ones given the excellent sell-out year to date and having completed sales campaigns with good feedback on them.
Because of all those factors, we may imagine that for the first half of next year, multi-brand stores and Directly Operated Stores will be equipped with the products that have been very well received by the market. This gives us good peace of mind, and we can actually tell you that we are looking at the final forecasts for the next year, where we are thinking of revenues growing by around 10%, investment 6%, and please remember, this is not a low figure, net financial position improving further, and we have no plans to change the dividends policy. As usual, we expect to maintain our 50% proportion, and that has been going on for about 10 years now. Let us take a few more minutes for some other important pieces of information, and then we will open the floor for questions.
We did meet at the beginning of October. We spent a couple of days together, so we had finished pretty much our fall tours. We had completed collections, orders, and so on. We got together to listen to people and to discuss and trade insights.
We met with clients, journalists, investors, analysts, bankers, and we gathered to be together and to discuss who we are, who we are today, what we can expect for our future, and to state once again our fundamentals. Right now, when there are different visions on the future of fashion, we discussed the greater things, the value of style identity, the value of absolute luxury, the value of Made in Italy, the value of exclusivity, the value of uniqueness, the value of healthy growth, as you know we call it, the value of healthy profit, because that's the way we call it, the value of family, the value of generational turnaround and handover, and the brand, hopefully, of the brand's long life.
As to our great values, the one in which we have always believed, we want to restate them because this is a very important, this is a high time for us to really restate them because we need to survive for the coming decades. We feel we enjoy a kind of excellent, healthy reputation. Of course, this is all feedback that we all gave ourselves. Nine of us were present in attendance. A family control over the company allows us to plan further ahead, this being a strong wish for the life of the company here in Solomeo. As to the responsibility towards the community as a whole, you are fully familiar with it. Solomeo is and will always have to stand for the place where everything happens, a very important place of the utmost importance to us.
Even in times as favorable as the past few years have been for us, prudence allows us to work with greater serenity, and with it, greater creativity.
Well, perhaps you cannot really hear it, but there are the bells tolling and ringing with the Holy Mary chant tolling, and it is really always beautiful. Another thing, supporting and believing in healthy growth and healthy profits gives us strength and determination because we want to envisage that the enterprise will live for a long time. This idea, this concept generates in everyday life, positivity, creativity, and humanity. You see, creativity is stronger if it is surrounded by positivity and humanity in the working environment. What matters is also what we call humanistic capitalism. We need to believe and act so that the brand may live, hopefully, for more than a century. Another really instrumental theme here, recruiting co-workers or partners. We need to recruit people of integrity and empathy as co-workers.
Wherever the atmosphere is pleasant, everything feels more human, harmonious, and people are far more creative. I have to say that this is specifically felt now as much as it was felt back in 2020 due to the pandemic. You see, passing on crafts, and as I was saying, 70% of our designs are manual. We fully believe that it is essential to raise wages and to make workplaces slightly more pleasant, because after all, who would advise their own children to become manual workers? You see, this is the greatest wager for the future of products made with exceptional manual skill like ours is. We need to continue to seek out talent and to recognize its value so as to build a company that is contemporary, multiple, and human. You see, talent is important.
You see, talent means that someone is better at working with colors, the other with prints. So we really need to be able to recognize talent types. Finally, the product, which we call our king. We want to tell you how we build, we put together our product. You see, human beings need to feel trendy every day by wearing fashionable products and wearing fashionable brands, as history teaches us. This need is really as old as humanity, and it does not just apply to clothing. Therefore, everything depends on how contemporary the product and the brand are. We do not believe for a moment absolute luxury is waning today. Quite the opposite. It is growing all the time. Actually, it is becoming even more important because everybody takes selfies and posts them. So we want to look better tomorrow than today.
How do we build our collections? There are about 100 people working in the design department, of whom 90 are first-level people, half are dedicated to menswear and womenswear, 50/50. We are all in constant dialogue with one another. When we hold large meetings with everyone to discuss the men's and women's style and the market, everything is always organized collectively like we did yesterday. We have never believed in collections made up largely of evergreens. For me, even the word evergreen, it really means that you make your collection age quickly. So it is not that you do not have to have them at all, but you see, their presence should be slightly less than what it is usually in the other collections. You see, visual merchandising plays a very important role here.
We actually started off drawing inspiration from Ralph Lauren, and we want to keep feeling grateful to him. Visual merchandising and styling, these are in-house teams. The fact that we have our own in-house styling team means that we are able to daily combine all the different items, and this really makes the difference because you then learn how to combine jackets, whether to wear a tie with a denim or without a denim. It really changes the whole picture. Even the schools that Riccardo was mentioning, these fully-fledged schools, where usually these schools, they welcome around 250 young men and women every year. They encompass every single kind of subject matter, visuals, styling. We believe that as a result, what comes out of it is a strong identity, style identity, and this is the reason why in 2023, 2024, 2025, we were presented with major awards.
They were all based on the identity of our brand. We are very pleased with this, that we have our own identity. We continue to believe, as always, in no logo, absolute luxury. I have always been mistrustful about logos because some of you might know that I was modeling for Ellesse, the number one sportswear in the world back then, and that's what happened when they used the logo and the brand went downhill. You see, products should stand for authenticity, simplicity, familiarity, style, and also manual skills, quality, creativity, and exclusivity. Exclusivity in particular is very much in the moment. Has always been a powerful theme in luxury, but especially now. Products must have an identity of style and lifestyle.
The style and lifestyle identity of our fashion house must always be embodied by a team, a team of people, and never by a single individual. Because in our company, no one is allowed to make any decision alone. This is not part of our culture. This applies not only to the collection. We always discuss every single subject. As far as product is concerned, well, it is overseen by myself with my two daughters, Camilla, Carolina, and Riccardo, and this is my job, and I devote 80% of my time to it, product and communication. But you see, product is my background, and if someone actually submits to me any financial deal, I'm not interested. Whereas if you submit to me a wonderful, top-notch quality cashmere, then I'm interested.
You see, we are working on cashmere denims, cashmere jeans, and I tried them on today, and we are so happy with them. This is what interests me the most, more than any financial deal that might be offered to me. Final remarks. We have always claimed that products and brands go out of fashion quickly and perhaps far faster than we imagine. Therefore, this is what matters the most. Jean de La Bruyère reminds us of it when he was writing in the age of the Sun King, Louis XIV, in 1688. You see, he was a writer, someone who was savvy about fashion, and he wrote a statement that I agree with fully.
One fashion has just barely replaced another when it is itself replaced by a newer one, which in turn yields to the one that follows, and that will not be the last, and such is our fickleness. If you look up the word fashion in the dictionary, it says in fashion, out of fashion. It means that it is a passing trend, and this applies to everything. In restaurants, nightclubs, bars, music. When I listen to some music, you see, and my daughters turn up and they say, what kind of outdated music are you listening to? If this is so, we must work even more intensely to try and remain contemporary and modern. How? We need to listen to the market without ever compromising on our taste and style identity. One minute on generational changeover.
At 58 years, I set up an irrevocable English-inspired trust, and I started talking about this with Moreno when I was 50 years, and this was to be for the benefit of my two daughters, currently our Vice Presidents. Pursuant to this trust during my lifetime, I may act freely. The day after my passing, as far as our fashion house is concerned, everything is already settled, no worries there. At 63 years, I took on the role of Executive Chairman and Creative Director and decided to appoint two Chief Executive Officers, Riccardo and Luca. Riccardo from the family, and Luca from outside, whom we nonetheless consider family, and on average, they are, lucky them, only 47 years old. I really strongly wanted to create some sort of alliance in terms of values and generations. I strongly wanted to build this alliance.
Some of you, quite rightly, one day might write, what happens after Brunello? After Brunello, as today, the company will remain in the hands of many capable people, where everybody's useful, but none is indispensable. You see, this is what we have always cherished because we are not the owners of the company, mind you, but we are its major shareholders and those chiefly responsible for it. The company itself belongs to the world. Let us conclude by saying that undoubtedly, we are experiencing a wonderful momentum for our fashion house across the world, and we can also add that things are going even better than we expected. We work serenely, always very focused, and always aware that for both the product and the brand, we must be truly exclusive, contemporary, unique, modern, and why not cool?
If we're not cool, then it doesn't work that way. Thank you so much, and now we have all the time in the world for your Q&As. You see, this was supposed to be wanting to restate who we are today and who we aspire to be in about 10- 15 years, and we have walked you through this discussion. Let's open up for questions.
This is the conference call Operator. We are now going to start the Q&A session. If you have a question, please press star one on your phone. If you want to leave the list, please press star two. Please ask your question using your receiver. If you have questions, please press star one now. You will hear silence for a couple of seconds to make sure we can book all requests for questions. The next question will be asked by Chiara Battistini of JP Morgan, please.
Thank you. Good afternoon, Brunello and everyone. I have two questions, please. The first question is about North America. It is still performing really well. Can you please give us some more details about the product mix you are selling there, or better, the mix between existing consumers and new consumers, and how are loyal existing customers behaving in terms of their spending patterns?
What about the price mix in North America? We are seeing some changes there. My second question is about your strategy for stores. I think that new openings are focusing mainly on larger stores. Can you please remind us of the average size of your stores, and where do you think we are heading in terms of the optimal size for new stores? Finally, I need a clarification. I think you said that October is off to a good start, so did I get it right, is Q4 going as well as the rest of the year?
Yes, Chiara, you have got that right. Q4, beginning of Q4 is as good as the rest of the year. Now, for North America, people tend to buy beautiful pieces, special pieces, and they tend to buy entire outfits.
So much depends on what you suggest and how you mix it, especially for men, that really makes a difference. You can buy a two-piece suit and then just use the jacket with denim trousers. So it is important to suggest it. This is why styling is so important and how we present it. As to the size of the stores, it is pretty much unchanged. 500 sq m-600 sq m for large cities, 400 sq m roughly for a second-tier city. Then for smaller tourist locations, they may be 70 sq m and cost as much as 600 sq m in a second-tier city. But nothing much has changed. We do believe it is really important for customers to see how we put things together and we style them.
Callimacus helps a lot there because people ask Callimacus, I am going to a dinner in L.A. tonight. What should I wear?" Callimacus provides suggestions and examples. So we have seen that to be very, very interesting. So it is true, we do 7% on e-commerce, but people normally walk into the stores with some pre-done research from the websites before. So people are looking for unique, beautiful, well-done, well-constructed things, well-styled, and so well put together. This is what Ralph Lauren has been teaching us for 50 years now. So put things together, style them well, and they should be very charming. Thank you.
Next question will come from the English conference, and it will be asked by Adrien Duverger of Goldman Sachs, please.
Hey, good evening. Thank you very much for taking my questions. The first one would be on the different geographies. Have you seen any differences in terms of the consumer spending patterns, I don't know, between the U.S., Europe, and Asia? My second question would be around margins. With the recent investments in the production capacity in retail and in client engagement, which should support long-term growth, when could we expect these investments to begin generating stronger operating leverage? What could drive margins above the current gradual progression? Thank you very much.
Thank you, Adrien. First of all, as to customer habit and behavior, one of our strengths is what Brunello was saying before. The capability to sell more than an individual product, but rather making our customers fall in love with a complete outfit and a complete style. This is visible in the U.S., Asia, and Europe alike, that the way our customers behave in different geographies is really similar.
Yeah, Adrien, this is Brunello speaking. We see it from the events we organize. We normally organize events with 100- 150 guests, and our customers are very similar throughout the world. As to your question on margins, Adrien, we need to say that we are already very happy with the fact that over time, year after year, we are improving successfully.
That means the investments we are making are going hand in hand with the return on those same investments. This is true for retail, for the growth of our stores network, where, of course, retail expansion goes together with higher personnel cost and rental costs. But we've always appraised the size of our investment carefully in order not to have a bad impact on P&L, but rather to have some operating leverage at the end of the year, which is what we expect for this year. Let me add that the investments we've done over the last few years have been focused on developing production capacity first and foremost. I would like to say something else, too. Should we decide to raise prices by 15% tomorrow morning, we may still sell successfully, but this strategy of having a healthy profit is a business-related strategy.
See what I mean? We're not looking for anything unusual. If I were a young buyer, I would really look at what companies do. If margins are reasonable, I would be very happy to buy. If they are too high, that would kind of bother me. Someone said, don't you buy that quarry? I said, no, because they are even too profitable. Questions that customers put to the forefront are very diverse. Of course, if we get the 20 basis points more, we'll be happy, but we won't change our strategy. That's the key thing.
Thank you very much.
Next question will be asked by Charles-Louis Scotti of Kepler Cheuvreux, please.
Yes, good evening. Thank you for taking my questions. I have three. The first one on the store network, could you give us an idea of the contribution of the new store openings to organic growth over the first nine months? It seems that its contribution has been more significant than in previous years. If you could give us also some granularity by region, this would be also helpful. My second question is on Europe, where the growth doubled in Q3 compared to the first half. What were the main drivers behind this acceleration, and was it related to a recovery in tourist spendings, and if so, which nationalities contributed the most? Lastly, I know that you are relatively under-penetrated in China, so you may not be fully representative of the broader market there.
However, given the recent tax reforms that is targeting affluent Chinese consumers, have you seen any impact on demand? Have you also experienced the same trading patterns as some of your peers with a more challenging summer in China and some kind of improvement in September and October? Thank you.
I will answer on China because we have seen the covers of major press in China. We do not have high revenues, but the brand exclusivity plays a high role. We were awarded very important prizes, so it is a healthy brand. When a few days ago, some Chinese investors came to visit, one Chinese investor of them said, well, your brand in China is all the rage. We could have three great years ahead of us. I replied, yes, but this does not mean that we want to open 20 stores a year, enjoy great profits, and so that he can make money, and then our brand goes down the drain. We want to be slightly and stay slightly exclusive and unique and exclusive. This is a topic we mentioned during our meeting in October, and it is very important.
Contribution, new spaces, organic growth, as I was saying before, Luca Lisandroni is speaking now, is always very well-balanced. As far as Europe is concerned, we enjoyed a good summer. Partly it was expected because Europe is the main tourist destination in the summer and also local customers also played an important role. Yes, very, very important, Brunello Cucinelli says. Local customers are very important. In the first three quarters, we had a double-digit growth in retail across Europe. In all three quarters, actually. We had excellent restocking and reorders from European multi-brand clients, and this has resulted in this Q3 growth in revenues. Our feedback, our judgment on Europe does not change. It is the thing that we said before. We believe that we have a distribution network that is quite good in Europe, and we think we believe we have very clear customers there.
Brunello Cucinelli now. As I was saying before, I do not think that the interest for luxury is waning or shrinking. Customers are in the lookout for more exclusive, more unique products, truth be told. Also the fact that we do not have a considerable size in China, that also matters. We want to still pursue exclusivity there because I attach a paramount importance to it. I was saying before, eyewear and fragrances are going really well there, but their positioning is extremely high. You see average retail price is EUR 800 for our eyewear. As Luxottica said, this is the high end, EUR 280 for fragrances. Everything we do, we would like to have it positioned in one single segment, which is the absolute luxury one.
Next question from Alberto Cecchetto, Citi.
Yes, Alberto Cecchetto speaking. Thank you for taking my question and congratulations on your results. My first question concerns wholesale. I would like to know whether the 7% acceleration in Q3 also includes the timing of shipment. What about wholesale performance in Q4? Second question, I would like more color on the progress of mix in like-for-like, and to what extent the product mix, how actually product mix tends to change from the start to the end of a customer life from the first purchase to the adoption of the total look, for example.
Riccardo Stefanelli, I can answer on the product mix. We see a homogeneous progress. On the one hand, collections have increasingly high weights of manual work. You saw Alberto Cecchetto, as far as collection are concerned, knitwear is pretty strong in our collection, and we have a very refined, sophisticated, handmade, pretty costly and expensive collection. One year it could be knitwear is all the rage, then it's the T-shirts and trousers. There are no significant changes there.
Riccardo is back on the line.
What we were saying, both thanks to our salespeople and Callimacus, we achieve great results by putting together the outfits. Brunello, you see, by the way, we forgot to talk about sales associates. This really is paramount because when you step into the store, generally speaking, other brands have this idea of wanting to hassle you to sell you at all costs. If you want to try and push something and force something upon me, I will definitely abandon your store. We were talking to all sales associates the other day. We were saying to them, do not push. I said. That was the first thing I mentioned.
Of course, our sales associates, they receive 85% of our revenues, sorry, their wages are fixed. If you behave like that with me, if you hassle me, I will stop coming into your store. I actually stepped into a store the other day. The two sales associates were just browsing through their phone, and I just left. I've never seen it before, some precedent. They were sitting down, and they were basically checking their phones. They asked me, yes, what would you like? Without even standing up to welcome me. This really, really matters so much so that it is definitely not easy to find the right people for your stores because they need to work on Saturdays, Sundays.
This is definitely another important topic, as Brunello, as Luca is saying, because we want our people to be amiable because at the end of the day, if you are a customer in a restaurant or in a store, as soon as you step in, you immediately are met by the kind of atmosphere in the store itself. Also we are really able to put together the team, all these individual people, but the general atmosphere is very pleasant. Brunello repeats, we do not want to be hassled. Then I will stop coming to your store or to your brand and shopping from your brand altogether. That's why we want to keep guaranteeing 85% of fixed salaries so that there is no rivalry that is piqued, that is stirred among the different sales associates. You see.
There was someone who was really insisting on me buying a car, and in the end, I bought it from someone else. Alberto, we can say that what we don't want to be done to us, we don't want done to others, vice versa.
Then about your question on wholesale, very punctual shipment and great restocking, as Riccardo was saying. You see, Brunello says this production structure that we put together is very flexible, and if you are able to restock and re-assort in just a few days, you see it's not the same as doing the reorder in a month or so. Things are going well also thanks to the taste, the style of the collection, also the value of the brand that we can say it, the brand is cool right now. This makes the difference.
I do not know whether we answered your question. Hopefully we did.
The next question is going to be asked by Maria Meita of Bernstein. Please.
Good afternoon, and thank you for taking my questions. I have a follow-up and then a second question. First, it is actually on wholesale, and my question is, given the significant acceleration that you have seen this quarter and looking maybe beyond the fourth quarter, what are your growth expectations for the channel in the next year? Then second, you have obviously acquired a lot of new customers, both in the U.S. and China over the past quarters, and I was wondering if these show the same loyalty and return purchases as previous cohorts given the acceleration in growth in these regions. Thank you very much.
Well, I can answer myself, says Brunello. This acceleration between 4% and 7% is not just due to new clients, but also to quicker reorders. Also, because in terms of absolute values versus last year, we are talking about a growth of EUR 8 million- EUR 9 million.
A collection which is slightly more or less attractive already makes a difference. As to purchasing behavior, we see no big difference. We have a lovely multi-brand in Tokyo or in Hamburg or Harrods in London. They all go just as well. We have 440 multi-brand customers globally. You said something beautiful, I liked it very much. We look for beautiful, young, multi-brand stores that are likely to become the leading multi-brand stores in the next 10- 20 years. The 440 multi-brand stores we have today, as an average, have anywhere between 120 and 125 years of age. I was at our multi-brand store in Paris recently, and it's an 80-year-old store, and it's joyful. Customers walk in, they chat away, and then they say they'd like to see a brand or another, and it's a very interesting selection in terms of their taste.
When customers walk by a less charming brand, you realize their reaction is different immediately. It's really, really interesting to spend time at multi-brand stores, also because they have a very open judgment about what they see. If they say their collection is so and so, that's the comment you'll never receive from your in-house store team. They'll always tell you, you are fantastic, but they've seen nothing from outside, whereas multi-brand customers have seen like 300 collections every season.
The next question will be asked by Andrea Randone of Intermonte, please.
Thank you. Thank you very much. Good afternoon, everyone, and congratulations on your results. I have a curiosity. You answered many questions already. It's about the movie. What impact did it have on usage of the website? Did you see any interaction there?
In particular, did you have any new information about traffic on the website? I'm also interested to understand how you see your customers, because your brand suggests cultural values, too. The success you're experiencing in China today is maybe something that could not have been done 10 years ago. The cultural backdrop for a brand like yours was not there 10 years ago. What's the impact of the website? What's the impact of the movie? What are the possible new areas where you might actually grow the brand in the next five years, but maybe areas where it's less known?
Well, Andrea, I'll try and answer you first. The movie is actually raising a lot of interest and growing interest, and it's about what Brunello was saying in this call, and as you pointed out.
Our communication is based on principles and values and fundamentals, and the movie is about this. Also failures, Andrea, because now when kids are 15, they should be able to be successful and do something in their life. When I was 15, I didn't have that kind of pressure. This happens with very young people today. They feel a lot of pressure. This morning at the board of directors meeting, we were talking about a U.S. boy, a very young one in his 20s, son of an acquaintance of ours who wrote a beautiful message and says, I saw myself mirroring in the story of young Brunello because I feel these values as my own, and even in failures, even in starting from scratch. Andrea, these are important values. It's also true.
In the first part of the movie, there's this whole part on life in the countryside, which is just no longer existing without electric light or whatever. It looks a bit poetic. The movie's really very satisfactory for us. You were asking whether it has an impact. Well, hopefully, yes. For two years, I spent 60 hours in interviews. It was quite fun. At the same time, it was quite demanding, but it carries the name of the brand around.
Thank you.
Thank you, Andrea.
Next question will be asked by Oriana Cardani of Intesa Sanpaolo.
Good evening, Brunello. Good evening, everyone. I have a question on France. I was wondering, have you noticed lately that local French customers are slightly weaker, so to speak, than customers in other European nationalities? What is the weight of France overall? Whether the weight of tourism in France is slightly higher than the average of the group, or whether it is in line? Thank you.
Well, we do not see any marked difference coming from French customers. France, for us, still accounts for an important European market. Brunello says for visibility because France will always be France. Paris will always be Paris. These are two different, so to speak, realities. You see fashion. There's the home of fashion. Paris. It's Milan. It's London.
My neighbor back in the years, on Saturdays, he would fly to Paris to shop there because his wife wanted to come home sporting her carrier bags with the brand Chanel Paris. Perhaps you are thinking of this, slightly demonstrations and stuff. You see, I myself was brought up at the end of the 1960s, and I grew up with all the demonstrations in November 1968, so I know all about it. I think that we really are in dire need, a kind of young cultural revolution is called for. I think that we need to change something, to bring about change, truth be told. Besides the business, young people, well, I am positively impressed by the fact that the demonstrators are 17, 18 years of age. Right, Moreno? Yes, we lived through it.
So allow me, but there is a need for raising the awareness of these young people. They need to be aware that something needs to change.
Luca, we are performing pretty well in France, double-digit growth. As to the weight, I would say approximately half of the Italian market, perhaps even less. But the image that you enjoy once you have a presence in Paris or Saint-Tropez in the French Riviera, it's really a high level. We always go through Paris and whenever we travel, we stop over there and we always take a look around, and fashion is really high on the agenda there.
Next question by Natasha Bonnet, Morgan Stanley.
Hi. Good evening. Thank you for taking my questions. This is Natasha Bonnet from Morgan Stanley. First on the year for 2027 for your growth of 10%, can you clarify your expectations of retail versus wholesale and also your store opening plans for 2027? So what should we be expecting in terms of contribution of space next year? My second question is just on the U.S., if you could clarify what has been the split of sales between new and existing clients for the brands for the past nine months. Then the third is, we've observed a reduction in Brunello Cucinelli products available online at a discount. To what extent does this reflect stronger full price sell-through and healthier underlying demand versus a deliberate tightening of the off-price distribution? Are you seeing an improvement in full price sales across your wholesale partners? Thank you.
Well, Natasha, as far as the expectation for 2027 is concerned, we believe that 10% is delivered by a retail that grows above 10% and then a single-digit wholesale. Yes, mid-single digit. The result of the wholesale in the first nine months is somehow a proxy of what we expect in the coming year. Then as far as the ratio between new and existing customers, we benefit from a positive contribution from both. So spending from both. Yes, we had estimated 470,000 clients, and now at the end of this year, perhaps we have 20,000 more, compared to our estimates. But across the world, we should have about 500,000 customers. Then as far as the online performance is concerned, I am pleased that you perceived a reduction of discounted products. It was just a kind of awareness-raising operation that we performed.
When we talk with our multi-brand customers, well, we wanted to convey this message during the sales campaign, and it was welcomed and received promptly. As for the rest, it is important to restate that this is a quite negligible phenomenon that in no way impacts our full price sales. It is something that is somehow natural in the remained goods in clothing because by nature-
Brunello, I have never met a customer who said I saw a price that was highly discounted. Because the truth is that we need to be exclusive in the number of stores, because exclusivity ranks very high for us. At least for us, you should not sell a coat for EUR 18,000 and then an entry price item for EUR 100. This is something that will never happen. We will never have an entry price first product, first line, no way, because this runs counter our idea of true luxury. Luca, sorry for the interruption.
I was done. Thank you.
Next question, Nik Lafioniatis, RBC.
Hello. Hi. Thank you for taking my question. Just one from me, please. On the 2027 guidance, could you please confirm if that 10% growth is in reported terms or organic? Then you kindly provided the effects impact for the current year. Could you share with us any early indications of the effects into the coming year? That is the one for me. Thank you.
The impact on this year, at the end of the year, 2.5, the negative exchange rate effect. As for the guidance for 2027, we do it at constant exchange rates. Yes, and that is the way it is, Brunello says. It is just normal. Nik, I would like to add, we always look at constant exchange rates. But as a matter of fact, financially speaking, current exchange rates also matter. So at the end of the year, we always have to come to terms with this. So that is the true revenues.
Thank you,
Thank you Nik.
Next question by Paola Carboni, EQUITA.
Yes, good evening. Thank you for taking my question. I will be brief. About the re-assortments that you mentioned before, your idea was to be able to restock in 16 days.
I think that this is a pretty important result, and I was wondering, how does this compare with the past? How has your capabilities changed from this point of view? Do you maybe pursue different policies in the retail or in the wholesale channel? Perhaps was this helpful to result in the high performance of the brand?
Yes, Brunello says it is a very interesting question, but there is never any difference. On the contrary, first things first. It is not really proportionate, the revenues. You see, we still have the same number of items in our collection, 800, like many years ago, of course. Our collection is 85% clothing, so I am not saying that it is easier, but we have always maintained that you are able to restock earlier and to ship earlier.
You have a higher opportunity, but not just for sale, because your shop window looks better and your boutique looks better. Albert Eickhoff, 30 years ago, used to say to me, if I fit the winter shop window in June with you delivering three days before, if a competitor arrives three days later, I will not take down your clothes there. Your advantage lies precisely in the fact of delivering, of shipping earlier. Delivering a few days earlier translates in an advantage. Of course, you do not change your shop windows every night overnight. But what matters the most is that your brand needs to be healthy, your product needs to be young, and your visual merchandising must be specifically appealing. We came back from our travels across the world for research and visual merchandising by our esteemed Ralph Lauren is always excellent.
The way they show the product, the way they display it, the way they combine it. You see, blending, putting together, pairing items in a way is not the same as pairing in a different way. A specific footwear matched with a suit ages the suit and the opposite if the footwear is the right one. You see, the product is really important, but if your brand ages, your product ages along the same lines. Let me wrap up by saying that I was modeling for Ellesse 1982, top in the world in 1984. It was the owner called me and said to me, Brunello, take a look at this collection. You're young.
Why are we not able to sell it? I said, well, because they are fed up with your logo. It was a beautiful collection, but the logo had aged, the company had aged, and nobody wanted to buy. I don't want to really tire you, but this is the way it works.
Next question by Deborah Aitken, Bloomberg.
Hello. Thanks for taking my question. I'd like to understand a little bit on your basket sizes, please, by region. What are those average basket sizes and how have they moved? Also, it's great if you could give us some updated detail on your cohorts by income level across those regions, please.
Well, as you know, our business by geography is very similar to our business by nationality, if we got your question right. It is a good proxy. When we look at geographical data, that is a very good proxy of the data by nationality. Of course, Europe receives travelers and tourists from the rest of the world. What we can tell you is that the collection is the same globally, and so there are no specific products that are designed only for China, only for America or whatever. What may be different in different locations is sizing, of course, because sizing in Athens and Hamburg may be very different. The actual warmth and weight. So you are buying for Athens, so it should be much lighter things than for Hamburg. There is no specific collection designed for any specific location. Let me tell you something else.
There was a Chinese partner some years ago, he said, why don't we do some striped cashmere sweaters? We could sell 10,000. We never did it, and we did not want to, because the style and design identity should remain the same at all times. We need to change sizes and weights for different nationalities because, of course, if you sell to Japanese or German customers, that is completely different.
Next question from Melania Grippo, BNP Paribas.
Evening. I have one question. Could you update of the openings and expansion in Q4 and also 2027? What can you say on this? Thank you.
As far as Q4 is concerned, we envisage an extension of the Geneva store, as we were saying, as well as the Shanghai Plaza one. That one will happen right at the end of the year. 2027 major openings are the following, the extension of China World in Beijing, as well as a second store still in Beijing. We have postponed to early 2027 from 2026, the opening of the Abu Dhabi store, The Galleria, which had been planned for September this year, but it was brought forward, brought ahead.
Melania, what we want to say to you, Brunello speaking, is you never know if the opportunity arises, then you must be able to seize it. Our strategy remains unchanged. Opening three or four a year, maybe restoring, refurbishing a couple, expanding another couple. This is the strategy to try and stay exclusive.
Of course, we need to do our maths in order to achieve our level of growth, the ideal level of growth, 10%. So 3% or 4% is the price mix out of this 10%, but the strategy stays the same. It was a good question from you to ask us what the destinations are of our openings. You cannot really know, because if a great opportunity comes to you need to seize it. At the very same time, we should not change our growth rate or our growth strategy, because otherwise we do not compromise on that. Yes, we grew well over the past three years, and you are quite rightly saying, wow, what an extraordinary growth. But this is not true.
We grew by 10%, 11%, 12%, but we do not believe that this is really preposterous, because if we were to consider the three-year period from 2023 across the fashion industry, we all doubled. Whereas 2024, 2025, 2026, I would call it a healthy growth in this three-year period. So there was a good rebalancing. Besides, our growth was very steady and gradual. If someone asks, how can you do that? How can you grow like that? Well, we grow by just 10%, and a company needs to grow at least by 4% or 5% to bear costs and support the organization. We are basically reaping the benefits of the fact that we are in a good momentum for our brand, but the strategy does not change as a result of that.
You should not expect us to double our openings, because that is basically what the Chinese investor was saying the other day that I mentioned. Yes, of course, we can open 25 stores a year. Then what do you do? Then you exit your investment once you have made a lot of money. I said, this is not the right way ahead, because you need to move slowly and steadily, not all of a sudden, because we would like to try and stay here for many years. Thank you.
Next question. It is a follow-up from Natasha Bonnet from Morgan Stanley.
Hi. Thank you so much for taking my follow-up. Just a quick question on net debt. I know you gave a guidance for this year, but can you share what you have in mind for your net debt position for what you are aiming for the end of 2027? Thank you.
The idea is that it will be improving. We have planned for investments of around 6%. Dividend policy unchanged, there will be no changes in terms of strategy. What worries us the most is to still be appealing and to design beautiful collections. It is a healthy growth, allow me. Here, too, we have established our dividend policy of around 50% 10 years ago. You basically have a different strategy than ours. We like it this way, and we don't think that we are a company in debt. It's not even half of the EBITDA. We still have this trend. For the first half, we are sure that we have beautiful collections on display. Of course, for the second half of 2027, fall/winter, we're still working on it.
There are no further questions booked.
Thank you. Thank you very much. Have a nice evening. If you have any follow-up questions, Pietro is available for questions. Thank you and good night.
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