Brunello Cucinelli Shares Soar on Back of Strong Nine-month Results

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MILANBrunello Cucinelli shares climbed all day on Thursday, closing up 10.15 percent at 57.50 euros on the Milan Stock Exchange, following the release of strong nine-month figures the evening before and forecasting a record 2022. Shares over the past year have gained 17.68 percent and 13.3 percent in the past six months.

The Italian luxury company reported a 27.7 percent increase in revenues to 642 million euros in the nine months ended Sept. 30, compared with the same period last year.

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On top of that, relying on its strong manufacturing pipeline, Cucinelli expects a 25 percent increase in revenues for the year and a 10 percent gain in the top line for 2023 based on the order intake for the men’s and women’s spring 2023 collections.

The company is poised to double sales ahead of its 10-year plan revealed in 2019 and introduced a new five-year plan beginning in 2023, considering 2022 a “non-linear year.”

Equity analysts Flavio Cereda and Kathryn Parker at Jefferies in their report stated that, “We continue to believe that [Brunello Cucinelli] is entitled to high multiples versus most peers,” and that revenues beat their expectations. The performance “validates our view that its unique brand profile at the top end is likely to be a safe haven” and rated Cucinelli shares as a “buy.” “Current trends look like a doubling of sales in six years versus the original stated assumption of 10.”

Cereda and Parker expressed their belief that Cucinelli’s “very resilient customer profile, category and geographical expansion opportunities will allow” the company to secure growth “but above all retain its unique characteristics that continue to distinguish it from all other players.” Jefferies estimated 2024 revenues to reach near 1.1 billion euros “and see no reason why 1.5 billion euros should not be comfortably achieved within five years.”

The namesake Cucinelli entrepreneur said he expects 2022 to be a record year and one of “total rebalancing, and along with the strong advancement in revenue after the pandemic period, we expect margins to completely rebalance, returning to ‘normal’ levels pre-pandemic.”

Growth in all markets and in the company’s retail and wholesale channels, as well as increases in both the women’s and men’s divisions, now representing almost a 50/50 balance, contributed to the strong nine-month performance.