Brunello Cucinelli S.p.A. (BC) Earnings Call Transcript & Summary

Good afternoon, and welcome to the presentation of the preliminary revenues for the first half of 2023 of Caasimada Brunello Cucinelli. The speakers will be Mr. Brunello Cucinelli, the Executive Chairman and design Director; Mr. Riccardo Stefanelli, CEO; Luca Lisandroni, CEO; Dario Pipitone, CFO; Moreno Ciarapica, co-CFO senior; and Pietro Arnaboldi, Investor Relations and Corporate Planning Director. [Operator Instructions] Now let me hand the floor to Mr. Brunello Cucinelli, please.

[Interpreted] Welcome. First of all, this is the half year results we are presenting. So welcome to you all the analysts, investors, the reporters that are connected personally enjoy this conference call very much. This afternoon, translation into English will be delivered by Annamaria because our interpreter Chiara is actually sitting at the beach and have a nice tan. And personally, I don't speak to English and I love working with Chiara but she is at the beach. This year, we decided to have conference calls in July and December, six per year as we did in 2020, '21 and '22 because we still like to consider this year as the year of total rebalancing then we like to hear a lot from each other. We're still here, of course, Luca and Riccardo, Dario, who is the new CFO since April. And Dario has not yet fully replaced Moreno Ciarapica, who is our Co-CFO senior. It's like having 2 pilots flying the same plane. I mean, Moreno was sitting on the left-hand side and he moved over to the right and [indiscernible] has moved Dario over to the left-hand side. So how would we like this to happen? I give you the main numbers, then we talk about the first half, which has completed. Then we'd like to update you on, we think will happen in the second half, then we'll see some forecast for 2024. We'll briefly talk about product and the value of our places, Solomeo in particular, then would like to update you about DL, you're all familiar with, with Chanel and Cariaggi and talk about our wonderful third-party manufacturers, then we'll dedicate some minutes to fragrances and eyewear and the website. And tonight, I'd like to give 4, 5 minutes to briefly discuss artificial intelligence because this is actually a call where we have a bit longer than usual. And so we may actually tell you something about what we're doing for this major issue for the future. Let me now report some data to you. Revenues stand at EUR 542.9 million, with a bond of growth, plus 31% at constant exchange at current exchange rates and plus 30.5% and at constant exchange rates over the first half of 2022. All geographies are very good. Americas plus 23.9%, Europe plus 22.6%, Italy plus 23.7%, Asia plus 55.6%. A relevant increase of revenues in both sales channels: retail, plus 41.6%, wholesale plus 15.8%. The first half, which has already closed with very good performances. The excellent process of winter deliveries and the favor we see around our brand and product proposal allows us to review upward our estimates for the growth of revenues for 2023. From plus 15 to a gap anywhere between 17% and 19%. And then we'll talk about this beautiful deal we have completed with the wonderful company, Chanel. On the purchase of a stake and the partnership, we started with the Lanificio Cariaggi, which is our supplier of top level, top quality cash payer. So I'm presenting myself by writing as follows. The first half of this year ended with more than excellent results. We like to think that we are reaping what the brand stands for in its style and in the way of conceiving the balance between work and the relationship with the creation. Thanks to the strong demand for handcrafted and exclusive products, we continue to have a very positive outlook on the absolute luxury world market. As a result, we are very confident about the future performance of the business for the current year. Well, we expect to close the year with an increase in sales between 17% and 19%. Given the excellent sell-out of the Spring/Summer 2023 collections, we are nearly at the end. And the significant order intake, which has already been almost completed for the men's spring/summer 2024 collection so far, we expect a healthy growth of around plus 10% for next year. Now for just a second, I'd like to clarify this issue of the guidelines. So you know that for our culture ever since we first started 12 years ago, we always thought we would give you a general budget for the current year and for the next year, every time we talk because this is what happens to us. I mean we live in a location where we feel we have a good relationship with the institutions. And so when, for instance, our major every day or the President of the region or the local head and representative of the government tell us house business, what are you doing, how are things going? We would like to be active players in our community, and we cannot answer these questions by telling them we cannot say anything because we're listed. So this has always been our strategy also because we live in a small town and we work in a small town. So this is what I wanted to tell you about. So it is certainly true we can make mistakes. But myself personally and all of us, we always decided that if I were an investor, I would like to hear some forecasts ever since 2020. or better, sorry, ever since 2000 up until 2023, we grew at an average of 13.5%. From the IPO, we grew around 13% every year, 13 years ago. It's been a pretty constant growth. Then of course, 2020 was a difficult year. We posted minus 10%. But as soon as we source some possible improvements, we did tell people what we thought would happen. And 2021 was a year of great rebalancing, and we ended at plus 30%. In 2022, we posted plus 30%, again, even though our budget was plus 20%, but there was a very key issue there, which is, first of all, fashion suddenly twisted towards a taste, which is much more in line with our taste and also we are lacking products on the market, which is still a problem. I mean, it's still something that we see in this first half of the year. So the performance in the second half, in the second to complete this, of course, we may make mistakes in our forecast, but we'd rather give you some forecasts for the next 3 years, 2 years, current year. And we would actually prefer talking to you about this. We were discussing this at the Board meeting this morning. In our directors that I can freely talk about our company and just tell frankly, about our projects. We may make mistakes, but we are happy to disclose our forecast. So please do remember that we are prepared and happy to give you forecast. So the second quarter has been continuous versus the first quarter. So it was very strong, robust half year in the end. And it was pretty strong in robust pretty much everywhere. So of course, the product is actually going towards this taste of ours. So what we call quiet luxury is really something we have actually been standing for. And I could say that actually all geographies are doing really, really well. I'd like to start with the U.S. market. This is a very strong domestic market for us. And last year, this same quarter has grown by over 60%. And so the half year was plus 24%, which is really relevant and important. And then Europe, I don't know what you think about this. But personally, you see that wherever we go, we see American tourist everywhere. I'm overjoyed about that. Of course, I'm really pleased that means our American friends are bringing in a nice and happy atmosphere. Italy -- well, wherever you go, I was in Florence a couple of days ago, you can't walk down the street. I never complain and say too much. So please try to understand what I mean. But frankly, I don't know whether in the future, we'll be able to properly manage and govern the amount of millions of people that are coming over to see us without risking to lose the identity of our places. So of course, we need to protect the Genius loci, the identity of our locations and places, which is a very strong tenant for us. So Luca, what do you think about this?

[Interpreted] Well, today, it's really good to see that many of our U.S. resellers are really careful and do personally present to their colleagues in Europe some of the clients that are traveling to come here. So as Brunello said, the recovery and the pickup of international tourism from the U.S. to Europe is very visible and very strong. But if we look at Asia, too, it is certainly true on one side that Chinese tourism towards Europe is still very limited, but there is a lot of regional tourism going on. And if you look at the performance in Hong Kong and in Singapore, they -- well, those cities are doing even better than in 2019. And they have once again gone back to being a key pole of attraction for a lot of Asian tourists. So at the same time, we're very happy about the performance in Mainland China. And this is actually on a pretty much like-for-like basis. So you know that we sell 12% to 13% of our revenues in China. Do remember that, please. But actually, China has gradually and constantly getting closer to the potential we know it has. We are opening about 1 store per year there. Today, we have 19 stores. We still serve 40 multibrand customers there. And they are also growing very nicely on a like-for-like basis. So you can certainly imagine that over the last few years, we've been [indiscernible] in [indiscernible] city, new beautiful specialty stores. Of course, for obvious reasons, this has been more difficult in the last years, but we still do believe in the role of wholesale and multi-brand in China and Korea is also very strong in that respect. So to complete our view on Asia and speaking of Korea again. So you may remember that in Korea, we have a distribution agreement with a very important partner, Shinsegae. They are actually going to see us in Solomeo in the next few days. And we are getting closer and closer to our partners even in the daily management of everything we do because the Korean market is becoming more and more important, and it actually has been a more relevant influence on the Asian market altogether. And Mr. Cucinelli saying 5 or 6 years ago, we never went to Korea, and we do go there all the time now. So that's a very significant change. And finally, and this is [indiscernible] there is a beautiful growth of wholesale, which is showing strongly 3 main features of this channel. So wholesale is a proximity channel with beautiful capillary distribution on geographical locations. It's a physical channel to begin with. And the physical channels have become very important throughout this first half year. And one final thing is that the wholesale channel is based on trust, mutual trust between sellers and buyers. And I think this is -- this like-for-like improvement is something we should never forget.

[Interpreted] This is Mr. Cucinelli speaking now, and he says, even during this first part of the year, deliveries have not been perfect and production issues have been felt. There has been a lot of raw materials in particular. We believe that in the second half of the year, this will be rebalanced. So for the full winter, we believe we're going to have a beautiful season where normalization will finally kick in. We believe that this issue of late deliveries will not hit 2024. So many times, we are told that were lacking reorders. But besides like in orders, I should say that all deliveries have been late by 2 or 3 months. And so of course, reorders are not there yet. But for the second half of the year, we think rebalancing will happen for us last year was extremely important in all channels and all geographies. So all this should actually lead us to a yearly growth anywhere between 17% and 19% with EBIT between 15% and 16% and net profit around 10%, which is something we've always appreciated. Actually, this year, the growth forecast at the beginning of the year was about 12%. Then of course, we won the, let's say, the Oscar of fashion for ready-to-wear for 2023. And so this award and this improvement of the taste for quiet luxury has certainly been very, very beneficial for us. So in 2019, we sold EUR 600 million. In 2020, we lost 10%, which was actually very good. So it was EUR 550 million at the end of 2020. For '22 and '23, we should reach the end of this year at around EUR 1.1 billion, which means doubling sales in the last 3 years. However, as Luca pointed out, in China and globally, we keep loyal to our strategy. So this big increase in the revenues didn't happen because you opened a lot of new stores. We kept opening 3 or -- 2 or 3 new stores every year and extending or restyling 3 or 4 stores per year. So this is what happened in 2023. We've virtually concluded the sales campaigns for the Men's spring/summer 20 work collection, which was very, very, very good. And so the older collection was really, really performing very well. Next week, we are going to present the women's collection. Hopefully, people will like it. We like it to tell you the trends. And well, hopefully, our clients would like it to. But this kind of planning makes us think that in 2024, we may grow by 5% or 6% in volumes and 3% or 4% in price. And so eventually, our growth could be 10%, which is the classic growth percentage of a constant year. Now as far as taste is concerned, foments in particular. We all went to the showroom in Milano. And we imagine this time for these bars were maybe not that younger, I'm sure you certainly remember that beautiful movie is the great GAP. It was set in 2022. It was chicken refined and sophisticated and fresh. And so in the '19-'20, there were 3 years of war, 2 years of pandemics and then finally, the king of England himself said, let's that's the elegant. And this is actually more or less what we now call quiet luxury in the end. So the idea is that you should be very [indiscernible] nice all the time. And it doesn't necessarily mean classic, but something [indiscernible] sophisticated, well-executed, something whereby you buy something interesting. But 10 minutes ago, I saw something in France, they are actually supporting the value of repairing the ready-to-wear and the apparel. So the French government decided to give incentives to the people who actually want to fix their ready-to-wear, if it needs some ticks in instead of buying new ones. We believe this is a lovely idea, and keeping your garments and mixing them together with something new, something old, maybe you need to modify them to improve them, but you can wear them for decades. So for the spring summer season in men, we have seen that suits are really coming back into fashion. So with T-shirts, with ties with denim shirts, with classic shirts, with sneakers, with classic shoes, whatever. I mean if you wear a suite you are [indiscernible]. And people in their mid-20s or 30s, well, virtually none of them owns a two piece suite. And the ones we have, we a bit older. Normally, we bought them before 2019. So when you look at your closet and you want to wear a suit that you first vote in 2018 or '19, well, first of all, you should see whether it still fit. And then it looks a bit not so new, frankly. So we do believe that suits are going to become very, very important for us. Now let me speak about -- for few minutes about the value of places and in particular, Solomeo. There is a lot of VIPs coming to see us here in our small town to try and understand our taste, the way we work, our lifestyle, the place itself, which means I have dinner out every single night. So tonight, it's going to be my 107 night, I'm out for dinner in a row. With the exception of one night, I didn't go out dinner. My only like is I still lost a bit of weight, but I'm hungry as can be. So we are really happy to see people coming over to see us. But it's a huge commitment at the same time. So -- we can say that this way of work in this way of communicating that we have is quiet, is sophisticated and fully focused and targeted. So when you come over -- you came to the company, you see the factory, you see the product, we have dinner together. There's a lot of important people coming over. Last week, we had a festival with the main guest that was China, that was a project we originally started in 2019. And of course, we had to postpone it. So for 5 days, we had this China team. We had about 20 young people who came over to see what our taste would be what kind of shows would happen. It was quite demanding because everybody wants to be never before midnight for the whole time. But they actually in our lifestyle in the town. So the term itself is really important. Solomeo is very important for us. We've been producing olive oil for many years. We don't sell it. We just give it to our friends. We also make wine. It's been quite expensive to begin with, but we are starting to sell it. But this enhances the local town to. And Brunello, I should also say that there is a growing and stronger and stronger connection between Solomeo and cashmere. So what Maranello stands for cars with Ferrari, Solomeo is for cashmere.

And what Mr. Cucinelli is now saying as soon as I leave earth to go up there, let's say, I would like to come back in a century and see what happens to Solomeo. But I'm sure that in 100 years' time, Solomeo will be synonymous with Cashmere. So whenever you come here, you should see ourselves, you should see cashmere, you should see by people processing Cashmere with great skills and care. Okay. That was Solomeo and now let me briefly update you about this beautiful deal we had with our beloved partners, Chanel. So maybe I'll talk about the general outline of the deal when we first started our business, we started buying Cashmere from Lanificio Cariaggi 45 years ago. It was a father and his sons work in there. And I have the truth, they -- we started off buying 20 kilos of cashmere than 50, and we paid 6 months later. So Cariaggi always helped in our growth. Maybe we help each other in growing with a lot of quality. Then in 2020, one of the 2 partners who was not so young anymore, decided to leave the company. So the company was slightly in trouble for some time. And then someone approached us to say, well, could you step in and by that 50% stake of the partner who is leaving the company. So there was like May, June 2020, you certainly remember how difficult that time was, but we decided to promise that we would support the partnership. Even the one of the partners was live in. And so at the time, the idea was EUR 70 million, and it was actually what we're selling at the time. So we decided to support the deal, and we'd like to consider this a kind of gratitude expression for everything we've done together. And hopefully, we are going to do a beautiful business together in the future. Then in 2022, our friends we can call them friends of Chanel approached us to say we could do something together. when Chanel started approaching us, we said, "Oh my gosh, this is Chanel talking to us, at least, we've always considered Chanel something special beautiful company, top level, top quality. They've never done any kind of transaction with anyone, but we decided together to go through with the deal on Carriage now has -- so the Carriage family now has 51%. So the majority stake is still in the hands of the family, which holds 51% and the majority of the Board of Directors, whereas the remaining 49% is held by our sales and Chanel in same amount. So Brunello, I would also like to point out that, of course, we share with Chanel quality, the beauty fibers and the lovely service that this partnership with Cariaggi will provide us with. But we also share something very important with Chanel that concerns our 400 people, too. So what we share with Chanel is the value of high-level manufacturing in Italy and the value of serving several customers we agree with Chanel on the idea that serving a lot of different customers and comparing each other day in, day out is really important. So they always said if some of our workers work for you and vice versa the creativity rate will improve. I've never met anyone saying if we both work together, it's beneficial for us both. So the quest for innovation for creativity, for quality is the feedstock of this company, of this joint venture. So it's a continuous comparison and cross contamination. As Brunello pointed out, this company like all raw materials company will have swing in revenue depending on the price of raw material. And is a very contemporary company. They're always fully updated on the service quality they provide and sun. So it is the Rolls Royce of cashmere. Of course, their quality is as good as Loro Piana, but for Loro Piana and Cariaggi, it's that Cariaggi is actually bigger and provide more yarns. So we have invested in the top global company, which is actually located in a tiny little town and provides top quality cashmere. Okay. Eyewear, very quickly. Let's update you on Eyewear. So you know we did a beautiful deal with Essilorluxottica. I still call it Luxottica, only I'm afraid that this is not nice towards Essilor. But actually, what I wanted to tell you is that things are doing very, very well. So we go there, 7 or 8 of us. We go to their factories. They come over. We talk about taste and style. There's a lot of affinity. There's always been a very good relationship with whom I'm happy to call my friend Leo Del Vecchio and Francesca Miller. And today, we work with Francesca Miller and Leonardo's children, and we still have a lovely relationship. And hopefully, this will continue for the next 20 or 30 or more years -- but we would like to call this a contemporary license because we do work a lot on the design and distribution. So we're very, very happy with this relationship. -- fragrances. This is another interesting topic. We just presented it some months ago. So after 3 years of research, we certainly know that fragrances are a very complicated thing I have to tell you, frankly, I still have maybe 100 or 200 samples at home. And I got really crazy sniffing them all. But actually, what we wanted to do was come up with two basic fragrances for men and women, which would be like our cashmere around snack sweater it's our basics in fragrances, of course. So we choose a beautiful company, EUR 700 million revenues, lovely turn in companies father and his 3 children. We have an excellent relationship, and we have the same relationship with them that we have with Luxottica. So every day, we talk about products and distribution and so on. So the early results so far, the fragrances are being sold in a limited number of stores in our 90lovely multi-brands and a few independent stores, but we have positioned our fragrances on the top of the pyramid. So there are upscale in terms of positioning. We are very confident about this in terms of the taste because the first thing we need to get the taste right and the fragrance right itself. So -- let me say a couple of words about new website. After 3.5 years, we've been working on the new website for 5 or 6 months. So if you have time, just take a look and tell us if you like it. So hopefully, this new site will represent the image places, values the vision of the world that we hold to too. And also E-commerce, which we feel is consolidating a lot is something we appreciate a lot. But we had 50% more visits in one year last year. And this year, it's growing just as much. And what is really important that around 60% of clients will walk into physical stores with some images that I have seen online. So that means the image we provide online is absolutely fundamental. And it's also always been very important for us to tell about our history, the places where we work, how we work at the custodian role we see for ourselves. So we really like this website. And for the first time, we actually completed the website with great abstraction. So let's now talk about maybe artificial intelligence. But actually before we do that, let me mention Penne, the Penne facility. So -- on the tenth of July, we did the first stone for what is going to be our production site in Penne, a beautiful 4,500 square meters factory. It's going to be opening in the first quarter of 2025. And it will have about 300 people working there. We'll start working there in December 2023 in a temporary really facility with the first [ status ] who are going to work there and will help us grow in the future. And let me just remind you that thanks to Brioni Penne globally and for us Italian is the place where you manufacture men's suits and particularly the jackets, top-quality jackets. And it's a small town of about 10,000 people. And up until recently, they had about 3,000 tailors. And the fit thing is that cool boys and school girls maybe once or twice a week, they used to go to the factory, and they just tried to learn how to be a tailor and to do some teaming. And so with Luca and Brunello, we had a great time in trying to imagine this factor in our projects. And it's just in front of the Gran Sasso mountains, the aesthetics of the factory will serve not just its sheer beauty but also the places where our tailors will go and work. Exactly. I forgot to tell you something about Luxottica. In some days, we'll have the 8 sub managers and the CEO, Mr. Milleri and we decided that 8 European managers of their beautiful factories in Europe will come over here to discuss the value of the factories and the value of blue collar work. We want to improve the working conditions of factory workers -- we heard a lot -- we discussed it a lot in the previous meetings, and we are going to go through with this project. Now -- before we get your questions, let me stick for 3 minutes of the new website session called technology, humanism and artificial intelligence. In 2016, I was invited to go to San Francisco by MarkMark Benioff and Kevin Systrom, the Founder of Instagram. And we had a dinner where we started talking about technology. And I said you should actually be our leaders in this sense. So we started a very close relationship, in particular, with Marc Benioff from Salesforce. And in 2018, he invited me to open the Dreamforce Convention in San Francisco, which was very, very beautiful one. Then in 2019, we invited over to Solomeo, Mr. Reid Hoffman and Jeff Bezos, some technology goes to come over here and discuss with us. And Reid Hoffman, who is a very, very smart person started talking about artificial intelligence back then. And he started off by saying, do remember that Well, he called the artificial intelligence, cognitive revolution for human being set to support the humanity, and we love the idea. But personally, it's a bit difficult to understand the pioneers, especially for people like me who are not tech savvy. So today, we have reached a very, very important point. So in 2022, we set up a team in the company, including myself, even though I'm not a tech person, but Luca and Riccardo are more techy than I am. And Francisco Botero is, let's say, the CEO of this small working group. And we sew research group to study intelligent artificial intelligence because on paper. This would certainly help us improve the working conditions actually workers, that's for sure. It's relatively easy to imagine that there's going to be a main accelerator for scientific research. So we're not scared about this. Personally, I'm not scared. I'm always open-minded when it comes to novelties like this, -- and it's a bit by saying we have this 2 pilot systems. So this is not a concern for us. We are going to investigate it thoroughly. Then some days ago, Nicholas Thompson came over to see us for long time the Chief Editor of Wired. And before joining wired, he was the Chief Editor of the New York and today is the CEO of the Atlantic. So he came over because he wanted to discuss a lot of things which we did -- we had a very open discussion about many things, including artificial intelligence. Now we believe Nicholas Thompson is one of the most insight for people who know and understand how to work with artificial intelligence. So as we date Nicholas that we would like to call this a project for the authenticity of Genius because we -- me personally, I think, even though I'm not a tech guy, as I told you. So I I'm pretty persuaded that this is going to really enhance the value and the authenticity of the. So printed books, for instance, if you really want to know the real content of Flats Republic, you have to read this in the book. direct human relationships will become more and more valuable. A phone call will become more and more important. -- handwritten notes will become more and more important. And pretty confident this will happen. And I'd be actually happy if we can actually cut 80% of the emails. It takes an hour to explain something that you can explain in one minute, if you call someone on the phone. So -- and then I think this is my simple thinking also shared by Riccardo and Luca and Francesca, who is our Chief Genius, let's say. So if you have a journalist, that you appreciate and they write something about someone will certainly go and look what the journalists write and we look for what they do whenever it's published. So some days ago, I came back to a journalist who said I didn't -- we couldn't really find the date of a speech of mine. And I do know it was a speech I delivered and I kept thinking about that happened, it was about artificial intelligence. And I was really surprised, and I couldn't really to remember when that happened. So they made some examples, and they made me listen to Steve Jobs and Steve Jobs personally said, "I went to Solomeo. I met Brunello, I discussed how to humanize the net the web and so on, and it was quite impressive. So before we gather your questions, how would we like to conclude here -- in terms of operations and practice, we are already using artificial intelligence to protect our brand online. We started a little project on that -- we also started a beautiful project with the Hospital and University of Peruta to try and help in emergency management of strokes. Strokes in this region of Umbria is a very big problem. It's an emergency management ischemic strokes is something we are actually trying to manage with the help of artificial intelligence. So as our friend Hoffman, we see it as a cognitive revolution to support humanity. So when I talk to Reid Hoffman, I always telling you are genius, but if you can actually build a robot who can actually shed tears when looking up at the sky, then I would a bit more worried. And Reid answered said, well, maybe one day, we will successfully build that robot -- now to conclude, then this is serious and very important. We work in a beautiful atmosphere to tell you the truth. We are confident we're brave and passionate towards these new goals for [ Manga ] and so the major issue we keep in mind at all times is the value of artisan work and the working conditions of factory workers are our key issue. So we keep speaking of factory workers. We don't speak of sales associates and office workers because our 1,200 sales associates in stores globally are working in a beautiful environment, and they are duly paid to do so. And also, we have 1,300 office workers here, and they all live in a beautiful environment, and they're proud about the work about factory workers. I mean they don't seem to want their children to become factory workers to. So that we have to improve the working conditions. So we want to work in practice and the big issue of factory workers. We are a manufacturing company. We're a strong manufacturing company. Italys strong manufacturing country. And so we can't avoid coming to terms with this major issue. In the recent days, we hired young people in the company to do a specific work in knitwear. We put them in a beautiful place -- they have a beautiful view outside, the salary they make is pretty to begin with ever since day one. Every two weeks, we got talked to them. We dedicate them a couple of hours every day to see how to be a good artisan because they may want to leave the company in 2, 3 years once they learned their trade, they may want to start their own business and become entrepreneurs themselves. So thank you for your attention. So far, we'll be happy to take your questions. Let's remember that the factory work is very, very, very important. This is the current call operator. We're going to have our Q&A session now.

[Operator Instructions] We're receiving questions now. Andrea Randone will ask the first question.

Thank you. good afternoon, -- it's not easy to ask let's say, low profile questions after this high-end presentation. Mr. Cucinelli says Andrea, don't worry. There is no such thing at a low level question or answer. So don't worry. So I'm in a [indiscernible]. I'm asking you with 3 quick questions. So the first is on store openings, -- so you said you are very selective in your new openings. So I would like to have your comment about recently opened stores in Dubai and Forte dei Marmi, in particular to try and understand what is particularly attractive in those locations? And what made you decide to open here since you're very selective in your new openings? Then my Second question is on margins. So you gave information about revenues this half year is very brilliant in terms of revenues. And could you please update us about your margins?

But the answer is we are pretty brilliant that we present the P&L on the 28th and 29th of August. .

Yes, I know, but maybe you have some early comments on margins. And then my final question is -- you rightly pointed out that fragrances and eyewear are very important target for you in terms of product development. So could you please give us some information about what do you expect from those product lines? And what about the new clients that you may actually want to serve with the new products. There certainly are some clients that acquire your brand, but cannot step forward buying ready-to-wear so they may want to buy these other products. Thanks a lot.

So for your first question on the new stores, we love them. They are a bit like Casa Cucinelli. It's always been our culture. It's in Madison Avenue and Maximilian Munich. For instance, we have small bars where you just walk by and have Cappuccino in the morning. If an though, you're not a client, and we love this. So we realized something in the past, people spent 16 minutes a day there. Today, the average time spent by customers in the store is 20 to 23 minutes. So we want to continue giving out this image. Like it's your house in the store. You can come in whatever you want to sit down and your partner can sit down and easily wait for you while the trying on something and so on. Luca, can you report on margins?

Yes, for Dubai and Forte dei Marmi in particular, of course, Dubai is experiencing a very happy time -- so Andrea, device location where the service level entertainment level is very high and very attractive for many tourists. global tourists. And also, we should remember that right now, many Russian citizens have moved their place of residence to Dubai. So that market is particularly brilliant beyond expectations. Forte dei Marmi is a lovely new story. The opening was fantastic. It was a summer party last week, and it was very exciting. And generally speaking, I have to say that the whole resort locations channel is very, very interesting. -- results have always been very, very important for us for image building and they are becoming more and more real profit-making stores. So once again, people are going back to physical shops more and more, and we see this increasingly. So when we opened the store, we had 350 guests. It was my 100th dinner out at Brunello and Brunello was in Milan, some nights ago, we did a beautiful event with the key profile shop in the city to present the fragrances. And so there's a lot of desired time together and to be pretty friendly and simple enough. So I always have this rule says Mr. Cucinelli one picture, one cashmere sweater. So I keep doing pictures with everyone, and I say, I'm happy to give you pictures, but you need to buy a cashmere sweater if you want to picture with me half jokingly, of course. Now as far as margins are concerned, Andrea, we don't expect many surprises. The EBIT is anywhere between 13% and 15%. Net profit is about 10% in our expectations. And actually, we're getting very, very close to our expectations. You know our P&L is pretty rigid, so to speak. So this growth of revenues will give us some leverage, but it won't change the fundamentals of the company. Absolutely. And also, we spend quite a lot on these events because we do a lot of these events there. They are quite demanding physically for me, but they are absolutely important because we are meeting a lot of important people who are happy to take pictures with us. and then they send them over to the front and then they cause, because they've seen a nice tuxedo in white. And it's really important in terms of sales -- immediate sales, but also they help us do a lot of networking -- so fragrances and I were we can't give you any early indication so far. But the most important thing here is taste. So Luxottica says for women's, we insist on Chanel. For Cucinelli, we have the most beautiful men's products. Of course, Chanel sells a lot more than we do so far. But getting the base right is absolutely important. we have a lot of younger customers and by younger, I mean people in the 30s or 40s because the very young are not loyal to brands they keep switching from one to another. So apparently, we have gotten the product right. And so having the certainty to get the right product makes me feel the future will be rosier. Thanks a lot. Thanks to you, both. So that's the key thing with products. If products are not charming, well, we won't go for.

The next question will be by Oriana Cardani with Intesa Sanpaolo.

Thank you. Good evening. Good evening, everyone. I have 3 questions. As to the main order collection on the Men's campaigns. Did you see any particularly positive signs in any individual geography? Or by severe, did you see any signs of weakness in other geographies? then as to the Performance in the first half -- and as far as the guidance review is considered is concerned, did you get any positive surprise from any specific element? Or is it a general improvement that makes you more confident for the second half? And then as far as the product mix is concerned, over the last two years, accessories have always grown at about 16% of total revenues. So I was wondering whether this percentage is confirmed in the first 6 months.

[Interpreted] Thank you. let me take your last question first. The percentage of accessories is always the same, and we're very happy because we still want to be identified as a Men's and Women's ready-to-wear company, and we're now 50-50 on Men's and Women's. So this is really important because we believe that you create taste through ready-to-wear. And it's actually why we received the Oscar of fashion for women today and for men years ago. So this is where you can make a difference. I mean taste is dictated by ready-to-wear. So accessories will remain at a lower level. So we thought phase would move our way, and it is indeed moving our way. So we are very, very happy to see that. For men, there was no clear weakness. I mean there is a clear choice, a clear decision. People are going towards a more fashionable man. And -- maybe last classic. I mean, very contemporary, very [ sick ], very sophisticated. And we always thought that 80% of human beings like dress themselves in this way. And there isn't so much of an offer on the market in this sense. So we are loved and considered to be kind of a global benchmark with this kind of [indiscernible] which we're very happy to see. It's like I mentioned the Great Gatsby before -- when we open Forte dei Marmi, we just looked around and it just looks nice. I mean even young man with beautiful T-shirts, beautiful sneakers, it does make a difference. And it's got nothing to do with an old taste. So we were talking about the products this morning with our Men's people. So we just came back from the fabric fare. And we realized that many things really classic, but it takes young people to work here to Oriana. It takes younger people, and it takes younger people in the fabric manufacturers in the creative studios for us as companies, but we're very confident. I mean, Luca, you see this every day in the showroom in Milan there's always been a beautiful atmosphere. Anyway, let me specify something for investors and analysts. So we are talking about real luxury, absolute luxury because this is what we are familiar with prepared to bet that the half yearly results are going to be very good. So take this with a pinch of fall, but we're actually -- so whoever we talk to and to discuss real luxury. I see there is a beautiful atmosphere, a beautiful asset. It's actually even better than we thought happen at the beginning of the year because last year was significant. So 1 in April, May, June, you seem to be a bit concerned about the second part of the year. And then the second quarter of the year was very good, too. I mean, it was growth level, which was unexpected for all of us. So we're very confident, very positive about this. And then, of course, we need products to do their part and to be the source of our good performance.

The next question will come from the English conference from Chris Huang of UBS.

Congratulations on the results. I have two questions, please. Firstly, on trends by consumer nationality, it will be very helpful for us to understand how the Americans doing, how the European is doing? And if you can comment specifically on the growth of the Chinese consumers? My second question will be focusing on your sales guidance, which is very appreciated for the update of the market. If I look at the midpoint of your guidance, which is plus 18% growth year-over-year. I'm just trying to understand what kind of -- what are the growth drivers you are baking in for I remember our previous conference calls that you commented price mix for this year will be 8%. Can you comment if that's still the case for H2? Thank you very much.