Brunello Cucinelli Spa Stock

[Interpreted] Hello. Good evening, and welcome to the presentation of the First Half Results 2026, H1 2026 Results of the Fashion House, Brunello Cucinelli. Speakers will be Brunello Cucinelli, 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.

[Operator Instructions] Now I'd like to give the floor to Brunello Cucinelli. The floor is yours.

[Interpreted] So here, we are -- good evening. It's slightly hot here. Actually, we are pushing 40 degrees Celsius. So good evening, and welcome to all of you. I'm sure you're all a bit exhausted because it's been a full week of reporting, but I'm particularly pleased in general. It is the first time we are presenting the full half year results as of 30th of July because we've always broken down in two, but we were able to do so, and we are particularly pleased. So I want to thank the team who made this possible.

So the call will play out as follows: I will take you through the key highlights. Dario, our CFO, will provide more details, more colors. Then I will share our detailed view on the final outlook for 2026, together with good visibility on 2027 as we have almost completed the spring/summer 2027 menswear and womenswear order collection. And honestly, it concluded with excellent results.

Luca will then provide you with a global overview of our markets. Riccardo will speak to you briefly about our factories. They're all fully operational. And also, he will talk about the new European regulations concerning the disposal of end-of-life garments. Finally, I will discuss our wonderful e-commerce project and our Callimacus platform in which my friend, Marc Benioff of Salesforce has invested, describing it as innovative and capable of rethinking digital experiences through AI.

Let me read out. So excellent results, which allow us to slightly raise our revenue growth estimates for the full year. We, therefore, expect growth at constant exchange rates of between plus 10% and plus 11% in 2026 compared to an initial estimate of 10%. In the first half, the very significant increase in revenues is accompanied by an improvement in profitability and by the confirmation of a solid balance sheet structure. Revenues as of 30th of June equaling EUR 749 million, up 13.3% at constant exchange rates and 9.5% at current exchange rates.

Retail channel, up 19.3% at constant exchange rates with a double-digit increase across all reference markets and a very positive second quarter, plus 18.6% at constant exchange rates. The wholesale channel also confirms a solid trend in both quarters with a rise of 2.7% at constant exchange rates as of 30th of June '26. Growth widespread across all geographies with revenues at constant exchange rates up by 20% -- sorry, 20.6% I said that I would not read the decimals, but I'm reading them. With 20.6% in Americas, 5.3% in Europe, plus 14.1% in Asia and particularly significant the contribution of China. Well, China is 13%. Mind you, this is very important to remember.

EBIT equaling EUR 128.2 million, up 12.6% compared to the first half of '25 with a margin of 17.1%, rising from 16.6% as of 30th of June last year. Net profit equaling EUR 78.2 million, plus 2% compared to 30th of June with an incidence of 10.4% of revenues. Investments standing at EUR 57.2 million with an incidence of 7.6% compared to EUR 63.5 million last year, incidence of 9.3%. Commercial investments are on the rise, whereas production investments decreased following the full completion at the end of 2025 of the new factories and of the expansion of the Solomeo headquarters.

The greater part of the investment plan envisage for 2026 was carried out in the first 6 months of the year. Net financial debt for the core business equaling EUR 225.1 million compared to EUR 197 million at June 30, '25. We confirm the expectation of quite a significant reduction in debt by the end of the year compared to the levels of 31st December '25, supported by the cash generation expected in the second part of the financial year and by the timing of the 2026 investment plan concentrated mainly in the first part of the year.

Then sales campaign. This is another important point. So spring/summer 2027 sales campaign, the collection of orders for men's is close to completion and that for women's is currently underway with extremely positive feedback for both collections. So aware of the solidity of our business model and of the pleasant atmosphere that we continue to feel around our brand, we envisage a healthy revenue growth of around 10% for 2027. Significant recognition of the technological value on the international development potential of the artificial intelligence platform developed by Solomei AI, called Callimacus with important investment by Salesforce, world leader in AI-based CRM solutions.

Now my quote. So we closed the first half of the year with results that we view as truly, truly outstanding. We have the impression that the brand is enjoying exceptionally favorable momentum across the world with our boutiques embodying our stylistic identity, our way of working and also our way of engaging with others and the lifestyle in which we have [indiscernible].

This generally rewarding way of working allows us to experience the variety of true luxury to which we have always aspired, exclusive yet gracious, a luxury defined by products and outstanding quality, exceptional craftsmanship and genuine exclusivity. Order intake for men's and women's spring/summer '27 collections has been excellent. Equally encouraging has been the start of sales for the fall/winter '26 collections, now available in our boutiques. Encouraged by these highly positive indicators, we are raising our guidance for full year 2026, increasing our expected growth from 10% to 10%-11%. We also remain highly confident about 2027 when we anticipate delivering healthy growth of around 10%. Now Dario will give you the finance details.

[Interpreted] Thank you, Brunello . So I would use the analyst presentation analyzing the main financial economic performance in the first half. As already anticipated by Brunello when commenting on the press releases, revenues amounted to EUR 749.4 million, up 13.3% at constant exchange rates and 9.5% at current exchange rates. We reported very solid growth across all geographies and across both distribution channels. Thanks to the strong revenue performance, and Luca will comment this more in detail later, the income statement on Slide 17 shows an overall balanced structure in terms of margins and costs, with EBIT increasing by 12.6%, growing more than proportionally compared to revenues and reaching EUR 128.2 million, corresponding to a margin of 17.1% of revenues.

Net profit, EUR 78.2 million or 10.4% margin on revenues. The first margin at 75% of revenues increased by 50 basis points compared to the previous period in terms of revenue incidence. This improvement is mainly attributable to the sales mix achieved during the period. As to the channel mix, we refer to the positive contribution of the growth of the retail business whose incidents in the two time periods went from 63.7% in '25 to 66.7% in June 2026.

As far as geographies are concerned, the positive contribution mainly comes from the growth reported in America and Asia, which are the regions characterized by a markup structure that is more supportive of the first margin. It is, however, important to underline that this effect becomes neutral at EBIT level due to the related commercial costs, which in these same regions are also proportionally higher. Operating costs, excluding depreciation, increased by 8.7% compared to the first half of the previous year and reflect the continued growth of our fashion house.

So Slide 19 to have more color on the main costs, rents, personnel and communication. So we can say that personnel costs as of 30th of June 2026 amounted to EUR 138.4 million, representing an increase of 10.2% with an incidence in line with 30th of June 2025, 18.5%. Our human resources amounted to 3,543 full-time equivalents, an increase of 260 FTEs compared to June last year. This increase is down both to the targeted expansion of our retail network following the opening of new stores, store expansions and Casa Cucinelli realized from the second half of last year until June 30 and to the development of our production structure, both in terms of direct manufacturing personnel and the teams managing and coordinating our extensive network artisans and supplies of precious raw materials.

Rental costs, net of the effects deriving from the application of IFRS 16 amounted to EUR 117.3 million, up 12% compared to EUR 104.7 million of last year. This increase is mainly ascribable to the new and selected openings as well as expansions carried out during the second part of the year and some contract renewals. And then to conclude, communication investments amounted to EUR 45.8 million, up 3.1% compared to EUR 44.4 million last year with an incidence that went from 6.1% of revenues last year to 6.5% this year.

The planning of our marketing activities foresees, as Brunello was saying, a greater concentration of events in the second half of the year. Therefore, we expect the related incidence on revenues at year-end to be higher compared to the figure reported in the first half. To conclude with depreciation and amortization, as a result of all this, EBIT amounted to EUR 128.2 million, up 12.6% with an operating margin of 17.1% compared to 16.6% last year. Following this improvement in operating profitability and after financial management showing net financial charges of EUR 18.4 million due to a significant reduction in foreign exchange gains together with a tax rate of 28.8%, which we consider a healthy level for an Italian, Italy-based company. Net profit at June 30, 2026, amounted to EUR 78.2 million, 10% of revenues.

Before completing the income statement, I would like to briefly return to the comment on financial management with the support of Slide 20, where we have included the usual breakdown highlighting the component that we could define as recurring, which is the basis on which we can project our expectations for the year, a component related to the foreign exchange fluctuations and an additional component, including the effects deriving from hedging activities and equity investments. The ordinary recurring component amounted to EUR 20.1 million and showed a slight increase compared to the previous year, EUR 17.3 million, mainly due to higher net financial charges related to the characteristic net financial debt, which we will comment on in more detail later.

Now Slide 21. Now I will comment the main balance sheet items, some comments on net working capital, investments and net financial debt. Net working capital, including net other current assets and liabilities amounted to EUR 317.6 million, corresponding to 21.6% of rolling last 12 months revenues as of June 30, 2026, compared to 22.6% last year and 22.2% last year June and this 22.2% December 2025. Looking at the individual components, trade receivables show a slight increase of 6.8% mainly ascribable to the natural evolution of the business and the timing of some shipments related to the fall/winter 2026 collection.

We consider our trade receivables to be extremely healthy, both thanks to the quality of our overdue receivables with the level of receivables outstanding beyond 90 days, showing a significant reduction compared to both December and June and due to the very limited levels of losses recognized in the income statement, which were virtually negligible during the first half of the year. Payment terms towards suppliers, collaborations and external consultants remained unchanged with trade payables amounting to EUR 171.6 million, slightly lower compared to previous periods.

Inventory incidents on rolling last 12 months revenues stood at 28.6%, substantially in line with both June 30 and December 31, 2025, 28.2%. This is a level that we view as healthy and consistent with the ordinary requirements of our business model. Net other current assets and liabilities showed a negative balance of EUR 42.4 million at June 30, 2026, compared to EUR 9.7 million at December 31, 2025. This change is mainly ascribable to the fair value measurement of derivative instruments used to hedge foreign exchange risk and related fluctuations as well as changes in the balance of tax receivables and tax payables.

Moving now on investments on Slide 22. As of 30th of June 2026, 7.6% of our revenues vis-a-vis 9.3% of the previous year and represent the majority of the investment plan expected for full year 2026, and they amounted to EUR 57.2 million. In detail, EUR 38 million in significant commercial investments, increasing compared to EUR 32 million last June. Then EUR 11.6 million in industrial investments, showing a significant reduction compared to EUR 25.2 million at June 30, 2025, mainly as a result of the completion of the 2024-2025 2-year investment plan aimed at strengthening our highly artisanal production capacity.

And this plan will provide us with the production spaces and premises required to cater for our growth over the next 10 years. The remaining approximately EUR 8 million, almost entirely related to important technology investments. To conclude, characteristic net financial debt on Slide 23 amounted to EUR 225.1 million vis-a-vis EUR 197.2 million last year. The increase is down to the changes in net working capital during the first half of the year, together with the concentration in the first half of the year of the investment plans for 2026, as previously mentioned, and the payment of dividends mainly carried out during the second quarter for a total amount of EUR 73.7 million. Thank you very much for your attention. Brunello, you have the floor.

[Interpreted] Thank you. Well, now let's come to the final 2026 outlook. And I'd like to remind you that we always would like to focus on absolute luxury segment. So what we're going to say pertains to this segment. In light of our first half results, which exceeded our expectations and considering the excellent momentum of our brand, we are raising our year-end estimates, and we expect growth at a constant exchange rate to be between 10% and 11% compared to an initial guidance of 10%. Foreign exchange as of the end of the year, it is expected to be around 1%. But throughout our history as a listed company since 2012, the average impact, both positively and negatively has been approximately 0.5%.

EBIT is expected to improve, reaching around 17%. Investments are expected to be around 6% as all of our production-related investments have now been completed, and this is going to be true for the next 3-year period. Investments in image and communication will remain consistently between 6% and 7% per year. Over the next 2 years, however, we will be presenting the movie in many different countries. However, the full production cost of the film was entirely expensed over the previous 3-year period, and we're very happy with that. Net financial position is improving, accounting for 14% -- well, for 11%, 12% of revenues compared to 14% in 2025.

Let's now move to the outlook for 2027. We provide you with this outlook because we already have collected orders. Anticipating what Luca and Riccardo will share with you soon, we'd like to give you our initial view for 2027. Having almost completed the menswear and womenswear order collection with excellent results and having received the feedback and the collection, both from our valued multi-brand partners as well as from national and international press, we expect another year of healthy growth of around 10%. Well, clearly, assuming no change in our strategy. As you can well understand, for the time being, we are very happy. Now Luca has the floor.

[Interpreted] Thank you very much. I welcome you all. As Dario said, we believe we've just closed another very good quarter. Sales growth has remained very consistent throughout the individual months with a well-balanced performance, both across geographies, product categories and for a perfect balance between menswear and womenswear. And these are factors that reinforce our confidence that our growth is solid and sustainable. I can also say that sales in July have continued to follow this very positive trend.

[Interpreted] Luca, pay attention to your pace for the translation.

[Interpreted] As we review our first half results and mindful of all the recent announcements made over the past few days, I will try to be even more concise than usual so as to leave more time for your questions. I'd like to draw your attention on to 3 figures that are particularly meaningful to us. Well, first, retail performance, plus 19% in the first half and plus 18% in the second quarter. Excluding the impact of the Middle East, the 2 quarters were virtually identical, both delivering very strong performances. Second, the outstanding results achieved by our online boutique following the launch of the website and 7% of total revenues.

Again, thanks to Callimacus, we see direct e-commerce business that accounts for approximately 7% of total revenues. And we also say very -- an indirect effect on brick-and-mortar stores with an increasing number of existing and new customers that are coming to the store with pictures drawn from our website. And then we have the performance of China and the Americas, both of which recorded growth of more than 20%.

Let's now get into the details of that. Well, as far as retail is concerned, this season has been truly important for us. The collection had an outstanding quality, as we said earlier this year, the retail network that remains young and dynamic, both in terms of locations and people and which, in our view, continues to offer significant and healthy potential for organic growth. Comparable store sales were very strong. As for new store openings and store expansions, well, they have fully met our preopening expectations. And I'm referring not only to the openings completed early this year, but also to those taking place in 2025, which have had a more meaningful impact on this first half performance.

Among these, I'd like to highlight the Paris and Los Angeles boutiques that have quickly established and have become the most important stores in our network. Then, as a reminder, well, the new website has created a significant value. The new functionalities have made a strong contribution, delivering an experience that is increasingly effective, engaging and aesthetically refined for our visitors. All key performance indicators have been positive. The number of visits continues to increase. The average time spent on the site has nearly doubled. The number of orders has increased and the average order value has increased as well with our digital customers' purchasing behavior becoming increasingly similar to that of customers that are shopping in our physical boutiques.

Let's come to geographies now, China first. As you know, China accounts for approximately 13% to 14% of our total revenues. However, the absolute contribution of our retail business in the region is becoming increasingly material quarter after quarter, reaching levels that are comparable with those of our major geographies. Well, we also believe that this is a particularly important moment for us in China for 3 reasons. First, according -- well, apparel is growing at roughly twice the pace of accessories.

And there is an important article, The Business of Fashion, and study carried out by McKinsey. And in this report, this report highlights that Chinese luxury customers that are increasingly seeking high-quality products that are recognizable only to a small and knowledgeable audience. So they are focusing on high-quality products, but for a small audience, very exclusive.

If we look at ourselves, at our brand, we think that our brand is and remains perhaps more than anywhere else, young, fresh and synonymous with authentic luxury. So we believe that the coming decade will be very important for us in China. We have often spoken about significant opportunities that we see in this market that start materializing in this country.

Our focus continues to be on China. So 2026 is the year of Shanghai with the opening of Casa Cucinelli in September and with the expansion of our boutique at Plaza 66, which is already one of our most important stores in Asia. And in 2027, we will instead strengthen our position in Beijing with the expansion of our China World boutique and another important opening.

Let's now come to America. There are 3 trends. Well, an increase in average spending on luxury, a growing concentration of spending at the very top end of the luxury segment and the emergence of new luxury destination with a broadening out of our footprint. We opened new boutiques in Nashville and Naples, reflecting the trend of the American luxury market becoming increasingly widespread and locally driven.

From a strategic viewpoint, these opportunities are very attractive because it enables us to serve new groups of customers while strengthening our high-end brand positioning and the relationships with our customers. So our boutiques continue to perform very well across North America. Neiman Marcus, Saks and Bergdorf have definitely moved beyond the period of financial uncertainty. With them, we closed a very positive first half, both in terms of our sell-in performance and more importantly, our sell-out performance to end customers.

The second quarter was stronger than the first, supported by a gradual improvement in product availability across the stores and especially thanks to customer loyalty that is very strong across all the 3 department stores. And so we are confident about the central role that these department stores play within the U.S. luxury market. Payments on time, operations smooth. So these are the 3 major highlights, Digital, China and Americas and retail.

So we attach great importance to the performance of our wholesale channel and to the results achieved in Europe. We closed the first half with growth in Europe of 5.3% and 10% in European retail, further confirming the strategic importance and the strength of this region within our business. 2.7% growth for wholesale in the 6-year period, in line with our expectations and in line with our idea of creating value over the long term. And our customers are in good shape. They are modern and fully understand how strongly we believe in the contribution they make to the long-term strength and longevity of our brand. And so they are equally aware of the high standards we expect from them, both in the physical stores and on the digital platforms.

One final important piece of information as far as sales are concerned. So it's a good growth, both value-wise and in terms of volumes. If we focus on the value-wise growth, well, we see that the search for high-quality garments, exclusive garments on the one hand is important and also the recognition of our brand in this high-end segment. When we look at our product offering, there are some categories like menswear and womenswear, tailoring, made-to-measure, outerwear, dresses, couture, knitwear and pants, trousers and skirts, we see that there are important opportunities for the future.

A couple of words on the income statement. As Dario commented on, we are very pleased with the improvement in profitability. Casa di Moda is going through a phase of healthy expansion, managed with great discipline. As you can see, the increase in the first margin outpaced the growth in rent and personnel costs. And so this confirms that gradual investments released the growth in revenues, thus managing costs. So we think our company has become stronger, but at the same time, has remained lean.

Then the foreign exchange impact, 1.5% in the second quarter, and we aim at reaching full neutrality in the second half. We look at the second half with confidence. We said July has been very successful. We are very confident in the product's offering that will be delivered to the stores in the second part of the year. And we also had very positive feedbacks on the fall/winter collections upon presentation. We also have a store opening plan besides Casa Cucinelli and the expansion of the Plaza 66.

We will open [ The Grove ] in Abu Dhabi, and we will expand our Geneva boutique. As for events, well, we will go on with family events, which are a special occasion for us. We will also have important events, 3, one in September. The official opening of the Saint-Honore boutique in Paris, accompanied by the French premiere of the film. In October, Shanghai with the screening of the film following the enthusiastic reception that Brunello received at the Shanghai International Film Festival. And last but not least, in December, Brunello's tribute to the world of cinema in Los Angeles. We will also go to Tokyo in October.

So well, with that, I'd like to say that we really look forward to closing another record year for our company. So record high revenues, but a year which is also rich in value and meaning for our brand. Thank you very much.

[Interpreted] Thank you. Riccardo, I will be very brief. I have 3 updates for you. So well, over the past few days, we successfully completed the delivery of our fall/winter '26 collections with outstanding punctuality and the exceptional level of craftsmanship that has always distinguished our work. And this is thanks to the efforts by the creative team, workshops and in-house tailoring workshops and the 400 Italian artisan workshops employing approximately 9,000 people. With them, we have a direct relationship without any intermediaries, and we work with them on a daily basis.

During our daily interactions, we meet them twice a year. And in mid-September, we will once again meet them to share our production plans for 2027. And this takes place during every season. This confirms our production model with a high level of craftsmanship on the one, they have great flexibility and speed. You know how important speed, especially in replenishment. Well, for the replenishment an important item. Second update as far as the industrial investments are concerned, we concluded everything in 2025. We're very happy, and we are extremely pleased with the workplaces that we have created, designed around people and around the quality of their work. These spaces will provide us with the production capacity required for the next decade. And you know that we are particularly pleased to continue receiving job applications for manufacturing workforce. And this confirms that the place of work and a fair consideration are the key elements for blue collars.

Last but not least, a short reflection on the new European legislation, and we are favorable because -- well, the new regulation prohibits companies in the textile industry from destroying unsold garments. We embrace this regulation with great conviction, not so much because it changes the way we operate, but rather because it recognizes a principle that is deeply rooted in our values, that is the idea that a garment has a value that must be preserved. Well, historically, we've always allocated approximately 2%, 3% of our production to donations in support of people in need throughout the world. Building relationships with small organizations around the world, even small organizations. This is very important.

During the COVID pandemic, we did something particularly meaningful and special by donating the unsold products from our boutiques. We launched the Brunello Cucinelli for Humanity project. This initiative continues today and currently accounts for 4% of our garments. In addition, a further 4% to 5% has always been allocated to purchases by our employees and their families to whom we offer a significant discount of the retail price, giving them the opportunity to wear products that they would otherwise not be able to purchase.

And so here, too, we are strongly convinced that our high garment should continue to be experienced, worn and passed down over time. So we're very pleased with this new European regulation, which we see as an important step towards the culture of quality, responsibility, product longevity, values that belong not only to our Casa di Moda, but also to the culture of Italian craftsmanship. Thank you very much.

[Interpreted] Well, I believe we still have 5 minutes. So at least we have 5 minutes -- 15 minutes for questions. So this Callimacus is very important project for us. We held a press conference the other day and Callimacus is a platform that redefines the digital experiences in the AI era. And we basically signed an important investment agreement from Salesforce in Italy and Europe. It's an important investment for them. But I'd like to read what Marc Benioff said, the Chair and CEO of Salesforce.

Marc Benioff has always believed that technology should elevate humanity. And this belief is at the heart of Callimacus. We like this very much. The team has developed an innovative platform that reimagines through AI, the digital experiences, combining conversational capabilities, business context and real-time personalization to create entirely new ways for companies to engage with their customers. So we are proud to collaborate with Brunello and the Solomei AI team in changing the way for a new -- which is great, in paving the way for a new generation of artificial intelligence-powered experiences. And of course, the transaction falls within the scope of the Italian Golden Power needs to be submitted to the Presidency of the Council of Ministers.

Now to summarize, we believe that our brand is currently experiencing a very positive tempus, a moment of great global momentum. Perhaps we can say that at this particular moment, our brand is truly cool, and this is the way fashion works. We are positioned in true luxury, and you should never, this is important, you should never expect us to introduce entry-level entry-price products. Everything continues to revolve around the single brand, Brunello Cucinelli, no second brand, third brand acquisitions or nothing.

So now I would like to talk about luxury for a minute. When I started this journey 48 years ago and until approximately 25 years ago, the market was traditionally divided into luxury, the #2 upper middle segment, middle segment and lower segment. Then during one of the first meetings of luxury held in Milan about 25 years ago, attended by my esteem, Sergio Loro Piana, a stylish friend who is no longer with us, Pupi Solari, a wonderful owner of the wonderful boutique on Via Monte Napoleone, and another Italian entrepreneur and myself. And the topic was luxury.

At one point, this entrepreneur took the floor and said that he had acquired a knitwear fabric -- factory, sorry, in Umbria produced sweaters at EUR 20, and he defined this as accessible luxury. You see myself and the other attendees, we basically looked at each other a bit puzzled, but that's the way he called it. From that day onwards, the discussion revolves around 3 different categories: absolute luxury, aspirational luxury, accessible luxury, always with this pyramid that is sometimes very questionable.

So to conclude on this extremely important topic, we believe that true luxury is a product that is of exceptional quality, the result of outstanding craftsmanship and exclusive in its distribution. And I believe that the theme of exclusivity is central for the future. Finally, the image of Solomeo is of the utmost importance to us as it embodies our vision of how to live and work. And we hope it conveys a sense of authenticity, simplicity and spirituality, a place company where one can enjoy an experience that is above all deeply human.

You should consider that we have about 14,000, 15,000 visitors every year. And you see I'm busy even on Saturdays and Sundays, I see them strolling through the village. So before concluding, I would like to recall that during our April call, we spoke of the wonderful atmosphere felt throughout Milano Collezioni, shared by buyers and journalists alike. And because there was this desire about these new proposals across many brands fall/winter '26 collections.

Now we all discussed this topic, after this busy week of half year results presentations, we have given us energy and renewed conviction, we have the feeling and we want to share it with you that overall, we are moving towards a positive phase, one that lifts our spirits and gives us fresh momentum. So how do we work? And what about our current situation? Our total focus must be on the products always. And this product must be new, contemporary, modern and youthful. And it needs to have a right balance between price and value while fully acknowledging that we create garments that are costly and at times very costly.

Everything goes out of fashion quickly. It has always been written so in every dictionary, even those dating back to the 1750s. And as you know fully well, we do not believe in evergreen products because even the Navy blazer this season is 1.5 centimeter longer than the previous season, and it is not an evergreen. With this awareness, we work with great focus and equal serenity, knowing that true creativity arises from mutually esteem, respect for others, the courage to listen to differing views. If there is this, we can definitely say that that's where true creativity is born. We can now open the floor for questions. You should also know that we never adopted the work from home or remote working mode because we believe that otherwise, you lose collective creativity.

There is a blurred boundary between private and business and work life and young people do not learn at all. So now we have time for questions.

[Interpreted] Chorus call operator speaking. [Operator Instructions] The first question is from Chiara Battistini, JPMorgan.

[Interpreted] So my first question is on the update of the guidance up to 10%, 11% for the year. Given how the first half performed, does this show a slowdown in the second half of the year? And also given the positive comments in the industry, I was wondering how did you come up with this guidance? And how is the second half of the year going to perform? The second question, on the second quarter performance in Asia because in my calculations, I see a slowdown in growth, 11% without considering the impact of ForEx. It was 18% in the first quarter. I heard the comment on China that is still growing 20%. So can we have some color about this slowdown?

And the third question is a higher-level question about your discount policies, especially on third-party platforms. So I was wondering if you can share with us how you monitor the goods sold at a discount in order to counter excessive discounts.

[Interpreted] So as to the first question, you see there is the war going on. You don't know how things will be going. So we prefer to move this way because every day is different. Luca?

[Interpreted] As for Asia, Chiara, we should consider the effect of the war, and we see no slowdown in the rest of the Asian continent. You should consider that as far as the Middle East is concerned, it gave a positive contribution in the first quarter, and it couldn't do so in the second quarter. But we did see in the second quarter, there was a good progress towards a recovery. Also, favored by a higher spending of the local customers.

As to the platforms, Brunello [indiscernible] it is an old story because you see we have the multi-brands, but maybe what they put in their platform is maybe from EUR 5,000, EUR 3,000 for a big size blazer. What is important is that even if you sell one of our items at a discount, it always ranges very high. So you never sell something for EUR 100, EUR 200. Always a very tiny discount. So the number of pieces at a discount is very scanty. And since we believe the multi-brands are the true guardians of our brands, I will never step back [indiscernible] business strategy because our multi-brands are, generally speaking, 110 years heritage, which means that you see multi-brands are much more long-lived than our retail stores. Thank you.

[Interpreted] Next question by Andrea Randone, Intermonte SIM.

[Interpreted] Brunello, you have given a lot of useful details. I have 2 curiosities. The first one is on the deal with Callimacus. What I'm interested in, have you already envisaged possible improvements for the solution you devise and whether your new partner can also represent a help in adding technology content or if you have any plans in this regard?

The second question, if you can go -- going back to the U.S. strong numbers there. And at group level, you talked about new customers developing an interest in the brand and new cities. If you can give us an idea because you're already quite well positioned, but do you still see room for growth in the coming 12 months?

[Interpreted] So I'll answer your question on Callimacus. You see Callimacus really has been a disruptively positive change, how your approach to our product has changed and the image has changed. It has been a game changer. You see they are #1 in the world, market sales for the website. You see eight people team worked on this website. And so we told, Marc, if you want this website, we can help you doing visual merchandising. But if you can -- with that 1,000 team, people, staff, you can definitely help. So we are pleased because for them it represents the first investment in Italy, quite a significant sizable one in Europe and innovation for the website because the website had been conceived a very similar way for the last few decades.

That's a serious endeavor and also enjoying daily relations with them as we've had this since 2015. Well, this has given us the opportunity to learn a lot. You see Marc would come up to us and say, "What can I buy? I want to shop." And I would say to Francesco Bottigliero, the person in charge of Callimacus, we basically suggest a few things that he bought and was successful businesses. And so he sometimes he comes for us to ask for advice.

[Interpreted] So thank you for your question, Luca speaking, because this really gives us an idea to reiterate a concept. There is no mature market for us. We are not too widely distributed. This is important. I think that America is the greatest example of this because it is a market historically very important for us, and we keep growing in a very continuous manner. They very much appreciate the high rate of craftmanship because always you see in knitwear, we have couture knitwear, but on average, it's EUR 15,000 for a retail item. So it means that it entails quality, style and then there is a very undivided attention to where you manufacture your goods, how you behave in your stores. And for us, Andrea is an important thing. So we see a bright future ahead of us. Of course, we had to -- you see the best future in the next 3, 5 years is China. We currently have 13.5%. We have just a handful of schools. So there is room for growth there. As you know, I always say you should speak slowly, but I did not.

[Interpreted] Next question from the English conference, Maria Meita, Bernstein, please.

I have 2. First is a follow-up from the previous question on the Americas. I was wondering if you could break down the growth coming from existing compared to new customers in the first half of the year versus last year? And then second, obviously, the movie has now been made available across more geographies. Have you or your wholesale partners seen any immediate impact on brand momentum or visibility in the sort of geographies where the movie was already launched? Or is it more of a long-term umbrella effect for the brand?

[Interpreted] Maria, let me start from the movie. Well, we won the first Golden Globe, and fortunately, I had to travel the world. But it seems as if -- well, in Shanghai it went well, abd Canada, America, well, the success is even higher than we expected because clearly -- well, the movie describes a very important topics, the topic of work, of respect and also the topic of the origins and poverty as well. So the movie has given us a lot of advantages.

And as we have said earlier, well, the costs have been already paid across the past 3 years and so we will benefit from it in the following 3 years. As for customers, we are at about 400,000, 500,000 customers, very few. And we have a lot of younger customers, a lot of 40-year-old men and women. So people who want to dress well and know very important personalities. We do not sponsor anyone. They are just friends buying our garments. So we are very happy with that development. Well, of course, I do not share this idea of quiet luxury. It's not quiet at all because you have to combine, mix and match colors in different places. So we are very happy. Thank you.

[Operator Instructions] There are no further questions. There is a question from the English conference, Natasha Bonnet, Morgan Stanley, please.

Congratulations on the great set of results. The first is regarding your -- for H1, Q2 results. Can you quantify the spacing contribution versus like-for-like in the first half? And then just keep us -- maybe give us an update on your store opening plans for the second half and next year. I believe you're converting 5 Neiman Marcus stores to retail in the second half. And then my second question would be, please, if you could give us some color on order books and what your wholesale guidance is for this year and next.

Natasha go ahead with your questions again, in English because we cannot hear the translation. So go ahead with the English questions. Can you repeat the questions, please?

Sure. I was asking if management could quantify the spacing contribution in the first half versus like-for-likes and then update us on the store opening plans for the second half of this year and next year. And I believe they are converting 5 Neiman Marcus stores into retail in the second half of this year. And then my second question was asking about to have some color on order books and what the wholesale guidance is for this year and 2027, please?

[Interpreted] The next question from the Italian conference,Paolo Carboni, Equita.

[Interpreted] I also would like to ask a question. As for the wholesale channel, that shows a significant gap compared to retail also like-for-like. So considering the more rigid approach that you have discounts and the management of unsold garment, this leads to a decrease in the channel. I was wondering where we are in terms of target and when can we expect this wholesale channel to grow again mid-to-single digit?

[Interpreted] Well, the spring/summer collection is growing very significant. However, most importantly, Paola, the judgment of the collection by them is very important because the fact act of knowing that the collection has been judged as extremely fascinating means that in our stores from January 1 to June 30, we will be selling beautiful collections. And knowing that we are going to sell beautiful collections is very important and then we never know what is going to happen, Paola. So that's the true judgment of our collections.

Well, for the winter collection, we asked for paying a bit more attention to the network. Although, again, we don't think you will find garments of ours for EUR 200 or EUR 300 on the net. So we are very happy. But as I said earlier, our multi-brand stores, they have an average age exceeding 100 years. And I believe our brands will not survive 100 years. I don't know, Paola, if I've been exhausted.

[Interpreted] Yes. A follow-up question. Compared to the total growth guidance of 10%, 11% at constant exchange rates, so how do you see the wholesale channel by the end of the year? And can you give us more details on the conversion plans for spaces?

[Interpreted] No, there are no such processes. We just ask that, well, it's better to buy 1% less being on the network and also the guidance that we provided is consistent. So we cannot hide the fact that things are going very well for us, but what we should not forget that there is another country at all. So we have to be sincere and serene and working in a certain manner.

[Interpreted] Next question from the English conference, Charles-Louis Scotti, Kepler Cheuvreux, please.

Do you hear me? Because it seems that there is some...

[Foreign Language].

Three's questions for me, please. The first one, I'm sorry in advance, but I will focus on the region that is seeing the slowest growth. But over the past few quarters, Europe seems to have been lagging behind the U.S. and Asia. Could you confirm that this is purely due to the wholesale business and that DTC trends are actually just as strong in Europe as they are in the U.S. and Asia?

My second question is on margins. The margin improved significantly in the first half. Can we extrapolate the 50 bps improvement to the full year? And if I remember correctly, you had also booked EUR 8 million provision related to tax last year. What is the current status of that provision? And what should we expect in terms of its impact on the H2 '26 margins? And finally, regarding leverage, could you provide a bit more detail on the pace of the expected debt reduction embedded in your budget? And how quickly do you expect the net debt to decline over the coming years?

Thanks a lot, Charles. Starting by Europe, we are, as I told you before, extremely confident about the health of our business in Europe. We are growing retail plus 10%, and we consider a very good achievement. Considering that we have a predominant part of the European demand that is related to domestic customers. And in any case, we had in the first semester, a positive add-on brought by the international tourism. Regarding the provision for tax, we posted EUR 8 million at the end of '25 and is equivalent to the debt that we left. So no impact on the second part of the year. Regarding the debt...

[Interpreted] Well, clearly, we've concluded we've closed the big industrial investments for 10, 12 years. So in the next 5 to 10 years, we are expected to collect money because in the past few years, we also invested 9% to 10% per year. But 6% doesn't mean that we're not going to invest that much. So it's again quite a good amount, but we no longer have the industrial investments. And that's why we think and expect the following 5 years to be years of collection. So that is going to decrease by nature.

[Operator Instructions] Next question, Melania Grippo, BNP Paribas.

[Interpreted] I have just one question. So as I understood, the space has contributed to the performance of retail in the first half of the year. What about the second half of the year? Can we expect a similar -- the space might count in the light of the new openings?

[Interpreted] I think we have an opening plan that is pretty balanced. We had a contribution from new openings in this first half that was higher than expected. And of course, now we are going towards a half where we believe that we have a great balance between organic growth and the rest. Yes, you see the opening strategy is always the same. 2, 3 stores a year, 3, 4 expansions, that's it. We would like to try and survive for the next 100 years, always based here in the Valley. I don't know whether we will achieve that, but we do plan for the longest of times because we do not believe in extreme speed. And we want to safeguard and preserve exclusivity because for us, that's what really is the key feature of that. Thank you, Melania.

So have a nice holiday for those of you who are going on holiday, we are very pleased that we had at this call at this time of the year. I am very, very, very delighted with the reporting as a system in general in our industry. Very, very pleased because truth told I am very pleased. You can tell that there is a recovery. There is positivity that you see there was [indiscernible] there was also in the reporting season results of first half results in the market. Well, yes, there's risk and there's concerns but there's not much we can do. But when there is a positive vibe in the market, in the company, there is an interesting creativity. So thanks again and enjoy your holidays. Thank you. Have a nice evening. Goodbye.

[Interpreted] Chorus Call operator speaking. The conference call has ended. You can now disconnect your phones.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good evening, and welcome to the presentation of the first quarter 2026 revenues of the Maison Brunello Cucinelli. Speakers will be Brunello Cucinelli, 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. [Operator Instructions]

Now I would like to hand over to Brunello Cucinelli.

Good evening. Welcome back, as usual, journalists, analysts, investors and dear friends. This is the second call of the year, but it is actually the first to discuss 2026 on the occasion of the Q1 revenue figures. We believe it is a very important call because we -- of the period we are living through. This is why we would define the scope as extremely important. All of us are present, 10 of us, as usual, and the call will proceed as follows. I will read out the key figures, then Luca will provide you with a careful global overview of the markets. Then I will resume sharing our forecast for 2026 in detail and also some visibility on 2027. Then together with Riccardo, we will summarize the following investments in artisanal production capacity, our elasticity, flexibility and reversibility that was already tested in 2020 during the pandemic and also in 2021 when we resumed our business and activities following the pandemic. We will then focus on the new e-commerce platform built with artificial intelligence in which we place great confidence, especially now as was the case in 2020.

Let me read out the figures. Excellent results with growth of 14% at constant exchange rates and total revenue of EUR 369 million, plus 8.1% at current exchange rate. Outstanding performance of the retail channel, up 20.1% at constant exchange rates, and very positive contribution from the wholesale channel, up 4.3% at constant exchange rates.

Very favorable trends across all geographies. Constant exchange rate growth of 20.3% in the Americas, 4.4% in Europe, 17.8% in Asia. Double-digit retail growth across all 3 continents.

Order intake for the fall/winter 2026 men's and women's collections is of the highest quality, with very positive feedback from the trade press and also the wholesale clients. Excellent contribution from a new e-commerce site based on the artificial intelligence called Callimacus, which has already proven its ability to greatly increase client interaction through personalized custom-made experiences and above all, it has attracted attention from major tech companies from the Silicon Valley.

The quarterly results with consistent growth in the first 3 months of the year, excellent sell-out of the spring/summer collection that are currently on the shelves, you should know that if your inventory is obsolete, that mirrors the goods you have in the stores. Also, the order intake for the fall/winter collections, described by trade press and major global buyers as perhaps the most beautiful ever, while all of the above will allow us to look at the entire 2026 year with confidence.

These highly positive elements, together with a strong and prestigious global brand image and positioning in the most exclusive luxury segment, they allow us to confirm expected growth of 10% at constant exchange rates for 2026.

And strongly believing in our business model, we also anticipate revenue growth of around 10% for 2027, too. This is my comment.

The first quarter of 2026 ended with -- sorry, with a 14% increase in revenues, a result we may confidently regard as excellent. On a global level, the brand's elevated image positioned within the most exclusive tier of luxury remains this image very robust, and we believe it is enjoying the finest moment in our history.

The consistency and identity of our style, our visual merchandising and the lifestyle we so ardently seek to express, they appear to us, both vigorous and dynamic, while their guiding principles remain steadfast over time, great creativity, contemporary products, craftsmanship, manual skills and exclusivity, that's important.

We are confident that the prestigious accolades received in 2025 for our stylistic identity together with the release of the movie throughout 2026 will continue to fuel interest, curiosity and allure around our Maison. At this particular juncture for humanity, we have drawn upon what we learned back in 2020 during the pandemic and subsequently put into practice, namely the importance of clarity in the fundamental principles of our enterprise, the necessity for all our decisions to be reversible, elastic and flexible, culturally as well on an almost daily basis.

And finally, the need for great caution in patients without thereby relinquishing our rightful ambition. This is what we asked of all our colleagues during the customary quarterly internal assembly that we held on March 2.

And we want to put into practice the teaching of Thomas More, who said, oh my God, help me to accept what I cannot change, and help me to change what I can. In light of the above as well as these, of the strong appreciation garnered by the fall/winter 2026 collections, described by international trade press and leading global buyers as the most beautiful in our history, we look to the current year with particular confidence, anticipating revenue growth of around 10%, with a similar outlook for 2027.

Now Luca, you can now give us a global overview.

Good evening, Brunello, and good evening, everybody. I would start commenting our results for this quarter that are particularly strong, slightly exceeding our expectations and showing further acceleration compared with the second half of 2025, which we had already regarded as excellent. The 20% growth in the retail channel represents the most significant elements of these results, and I would begin my review precisely here. We view this growth to be meaningful and particularly robust for a number of reasons. First, once again, strong geographical balance. As Brunello mentioned, we are growing double-digit in the retail across all 3 continents.

The second element is an excellent balance between organic and nonorganic growth. The overall performance of existing stores remains very healthy and consistent, confirming our belief that there is -- that we have already mentioned in several occasions that there is still considerable potential within these locations, thanks to the youth and freshness of our network. At the same time, new openings and expansions we have delivered, while they have translated into the expected contribution, enabling us to continuously enhance the quality of our network while safeguarding the evolution of our profit and loss account. We have identified growth opportunities in a non-dilutive manner. When we take a look at the contribution of nonorganic growth in the first quarter, as you might remember, there is a marginal contribution offered by the 3 openings at the start of the year, Boca Raton, 1 in China and Naples, they are middle sized and they are in premium new locations. But the greatest contribution was -- comes from the 2025 openings that, as you might remember, were all concentrated in the second half of the year.

The third remark I'd like to make is the virtuous balance between volume and value growth. Sales volumes are increasing in step with the growth in number of end customers while the average selling price is also rising, supported by a highly positive sales mix. For us, this is a very encouraging sign that talks about the quality of our creative offering and the positioning of the brand. This has been the case for a few years, from Brunello comments.

Then fourth, perfect gender parity. In this quarter 2, revenues shows gender parity, 50% men and 50% women. And we consider this a very distinctive feature of our brand.

The last remark regards the time dimension. We are expanding our sequence of double-digit retail growth quarters. And this shows consistency of our performance and continuity of our performance even across different market environments. Within the quarter, it is worth noting that March remained in line with the growth of the previous 2 months, even after the outbreak of the war.

Only the Middle East saw some impact, but this was offset during the month by the overperformance of other regions and also the first 2 months in the same region in the Middle East. So the Middle East accounts for approximately 5% of our revenues, both by geography and by customer nationality. The region shows a good balance between retail and wholesale, with retail focused concentrated in Dubai, Abu Dhabi, and the rest is managed through wholesale agreements. What is even more important is that the Middle East contributes positively to growth in the first quarter. Thanks to the excellent start in the first 2 months of the year. In March, however, store traffic in the area fell by more than 50%, although it is important to highlight that all stores remain open and fully operational. And we confirmed their salaries fully.

Let us now turn to wholesale. There is a slight growth at constant exchange rates there, very good, which we consider very positive and fully in line with our expectations for the channel for the full year. Spring/summer deliveries were once again perfectly on time and complete, enabling our multi-brand clients to begin the season with full assortments and to achieve very encouraging sell-out results. As you know, as we said last time, we have asked all our multi-brand partners to pay increasing attention to their online conduct while leaving them free to receive and order quantities consistent with this discipline.

In talking about wholesale, it is always useful to distinguish between specialty stores and department stores. Specialty stores represent one of the strongest pillars of our business in our distribution and revenues and they are in excellent health, highly attentive to research, very important for the whole industry, and they are busy trying to understand this particularly favorable moment in style. Yes, it's 30% wholesale and 70% retail, Brunello points out.

In times of international tension, the role of specialty stores becomes even more significant, thanks to their close physical proximity to customers and the strong relationship of trust they maintain.

Department stores. Let's look at Saks, Neiman Marcus and Bergdorf Goodman. As we said, we've been back to full operations since the end of January, and this is shown by our results. For our brands, sales to end customers in the first quarter are higher than in the same period last year in 2025. And this is true both for concessions and for wholesale products and both for menswear and womenswear, and payments have been extremely punctual.

Let us now look at geographies. As you've seen, the Americas and China, both in excellent health, are driving overall growth. These 2 markets increasingly appear as systems that are somewhat insulated from the rest of the world. They're strong because of their size of domestic demand. And on the other side, they are shielded by physical distance from the Middle Eastern war. And they are also protected by a relatively moderate media coverage of the Middle Eastern conflict.

From a trend perspective, China and Americas are experiencing the same phase of demand elevation. And actually, the average selling price in these regions is rising more rapidly than in other parts of the world, reflecting a strong desire for uniqueness in special garments.

In China, for us, sales are concentrated exclusively in major cities, with Hong Kong once again becoming a very strong hub of attraction. In the Americas, our sales performance is also excellent across all major cities. We're achieving double-digit growth in New York, Miami, Los Angeles, Chicago and Dallas, and the main resort locations such as Aspen, while overall growth is strongly supported by the broad depletion of demand across the whole national territory, which has revealed new opportunities even beyond major cities and leading resorts.

Europe. Results in Europe are in line with our expectations. We anticipated wholesale to be broadly in line with last year, and we're very pleased with retail growth of 10%. The noncomparable effect is now much more limited in Europe versus other regions. And we note the excellent start of the new store in Rue Saint-Honore in Paris, which we opened last November. The performance of comparable stores across the various European markets in this first quarter is, therefore, very solid.

So we can conclude that globally, the performance of the physical business is excellent, as is the performance of the digital channel. Our online boutique is growing rapidly this first quarter, strengthened by the new features that Brunello mentioned, and we are going to talk about that later, too. They are based on our Callimacus artificial intelligence. And this has immediately led to a significantly longer session times, which means greater opportunities for sales and communication as well as, in our view, a more elevated and distinctive image.

Also increasingly satisfactory and productive with our partnership with LuxExperience and all its platforms, Mytheresa, NET-A-PORTER and MR PORTER, we're achieving double-digit sales growth alongside higher sell-out percentages.

And these excellent results show very close collaboration and strong discipline. We firmly believe that 2027 is very successful year for the digital channel. We actually see that customers are becoming more and more confident with digital challenges, and we're talking about true luxury customers. And the digital experience is very agile and nimble by its very nature, which is a big advantage in this moment in time.

So a detailed analysis by geography, channel and growth driver provides consistent positive and mutually reinforcing evidence of a business in excellent health, supported by the clear statistic identity, strong brand appeal, product strength, clarity of positioning and rigor in the strategic development we are pursuing.

Then when moving from actual data to forecast, then necessarily, we must take into account the contextual analysis. And we see this as 3 concentric circles, our fashion health within our sector, within our industry and in the global market. So if we look at this shape, we feel the company is in very good shape. We have resources, initiatives, projects and commercial investments in place to support the expected sales for the upcoming periods.

We also believe the industry is doing well, certainly better than last year. We have closed fashion weeks with a very positive atmosphere. We felt a very good environment with a strong perception of new ideas, and this is true for both Milan and Paris. We noticed renewed energy and a great focus on product. And in our view, this will prove decisive in the months ahead.

However, global markets are factoring in the current high level of international tension, outlining a more challenging environment than initially expected. But we are no strangers to uncertainty, and we firmly believe more and more that in uncertain times, it becomes even more important to maintain clarity of purpose, while exercising daily flexibility and execution without giving into -- or giving up our ambitions.

As we always do in such sensitive, delicate moments, we have gathered, and we can confirm today our guidance of expected revenue growth of about -- of around 10% for 2026 and 2027, maintaining both realistic and confident attitude. Today, we're experiencing the welcome sense of a very natural, entirely unforced growth, which seems to broaden our horizon and make the opportunities ahead even clearer and more tangible.

So I'll stop here. Of course, if you have questions, we'll be happy to go deeper into this.

Very good. This is Brunello speaking. So following Luca's comments, the forecast for 2026 is revenue growth around 10%, EBIT slightly improving, investments around 6% because you know that industrial investments have been completed, net financial position improving, and this with a healthy and excellent visibility.

And we expect the same to be true for 2027. We would like to virtually change nothing, follow the same strategies as in 2026. So why are we providing estimate and sharing them with you? This is a typical problem we first encountered in 2020. So we do share our estimates with you at very unusual moments. It would be much more cautious not to do so. Many of you analysts told us we were bold in doing so back in 2022. But first of all, it's part of our culture, company culture. And also, we have close connections with the local institutions and authorities like the mayor, the provincial house and so on. And everybody is asking us how are things going. And it's hard for us to say we cannot answer because we are a public company.

So just like we did in 2020, we are trying to give you an idea. And then if changes occur, we'll update you immediately. So internally, we work with projects every day. And this is what we want to convey to you. But we are ready to adjust them on a daily basis according to events in case it's necessary.

So let's go on with some 3-year considerations. We consider 2026, '27 and '28 as an overall period, which belongs to the 2024/2028 plan, which we defined as the triennium of healthy harvest because in 2024 and '25, we have completed our investments in our production facilities, which we are confident with guaranteed high-quality production for the next 10 to 15 years. And now this will be the trend of the harvest. 2028 will mark the 50th birthday our company, and we want to get there with peace of mind.

Our facilities allow us to have flexibility, speed elasticity, reversibility, which is really, really important, and we will discuss it further with Riccardo.

So why do we change our estimates? Well, first of all, Q1 performance reflects the value of the spring/summer collection, which was just as particularly beautiful and creative last September. And we are looking -- increasingly looking for special, beautiful, wearable, unique garments with great creativity and exclusivity. And this is certainly something we noticed for both men and women. So for men's, it's more used and acceptable to wear the same things 2 or 3 seasons in a row, whereas women tend to change more frequently.

My second comment is that the fall/winter '26 collection entering stores in July, we received extremely favorable feedback during recent women's fashion weeks, both in Milan and Paris. They were rated as excellent by the international press and by the clients who said they are maybe the most beautiful ever. And as you know, multi-brand clients are the players that are out there and quickly understand the state of health of each brand because they actually see hundreds of collections every season before everybody else does. And this gives us strength.

Something else that Luca hinted to is that during the latest February/March fashion shows, we actually felt completely fresh energy, and then the war broke, and this is a different story. But both in Paris and Milan, there was a lot of energy around the brand, around the luxury industry. We have been waiting for that for perhaps 3 years. And this new energy is something we still breathe when talking to the press. The press is definitely able to anticipate the times we are going through.

Now fourth point, in our stores, and this is really atmosphere, it is really important. The atmosphere blends home and shop, which is what we wanted. We have 10 Casa Cucinelli and we do events everywhere. So we -- even in other stores, we have little buys. We actually have very nice sales associates. They're not insisting. They have a lot of taste. They have beautiful lifestyles. So as we speak, we consider our boutiques to be very contemporary and beautiful just like our showrooms because the showrooms where we present collections, well, if they look old, they have a bad impact on collections, too. We want the Casa Cucinelli to be our ambassadors. The last one, beautiful one will open in Shanghai, and we will have this family-like event with maybe 100 to 120 guests.

This year is also going to be very important for the brand. Next week, we are going to travel to New York to present the movie. So we'll start in New York and then we'll travel around Europe and Asia and we'll complete this trip in the Middle East in December, hopefully.

So these are the main reasons why we confirm our estimates, even though there's a war, painful and quite unexpected one, it's difficult to accept it for our modern times. But for me, I'm a lover of history, we know that war is part of our story all the time.

So in summary, we believe the brand is experiencing a strong positive momentum globally for many reasons, including design, identity and creativity, craftsmanship, image, sustainability, the ways and places of the work and the value of Solomeo. These are very important tenets for us. And above all, there's a lot of research behind our product and great exclusivity even online. So we discussed it all the time. We believe that also in communication, we actually need to be very exclusive on the communication front as well.

Our clients are [ 450,000 to 500 ] people globally, so they're not so many in terms of amount. And we may conclude saying that today, the brand is pretty cool. We can actually say it ourselves. Brands may be either very cool or not cool at all.

So Riccardo, please give us an idea of elasticity and flexibility and so on. Thank you.

Good evening, everyone. I would like to share with you, as I usually do, some reflections on our production structure, which we believe is one of the most distinctive and solid elements of our fashion house. So as you know, alongside actually in Solomeo, which has doubled in size over the past 2 years, in also 2025, and besides, alongside our high-quality tailoring workshops dedicated to men's and women's outerwear in Carrara, Gubbio, and Penne, you know already. Well, besides, alongside all that, we can rely on the supply chain made up of 400 small artisan enterprises with which maintain a direct, never intermediated relationship. And this does not mean that we want to pass any judgment on the platforms and all those who use them. This is our culture.

And by the way, in our region, Umbria, we have 70% of these small workshops, and the others are located in Marche, Tuscany and Veneto. So currently, they have 8,700 people, more than 8,400 in 2025. And the average age is what we like is that the owners are 52 and the employees on average are 44 years old. So the generation handover has already happened.

And as we often say, it is a very simple straightforward model. This craftmanship requires hands. So if we want to maintain this top-notch quality, we need to understand which hands will probably work here in the future. And we believe that in this day and age, nurturing this manual skill culture is one of the most contemporary approach that casa di moda might adopt.

And if there is a distinctive element of our production chain is flexibility. As Brunello was saying, our stress test was in 2020 and the following years. In 2020, in particular, we found ourselves working in the context of great uncertainty. The same month in March, where the traditional seasonal planning became, in effect, weekly planning and actually, daily planning. And I clearly remember how week after week, we adjusted production batches, we transferred skills from one contractor to another. And at times, we even slowed production, focusing more on research and creativity. And then we resumed it and then we also changed our holidays.

So back then, we had 2 very clear objectives. On the one hand, to ensure continuity of work for our artisans. And on the other hand, we had to protect the company at the time when market visibility was extremely limited.

What we find particularly interesting is what happened immediately afterwards in the following 2 years. Well, we experienced the opposite situation, the market demand exceeding our expectations and which we have to meet with great speed, thanks to our artisanal subcontractors. Even in that case, our supply chain demonstrated the very same capability, but in the opposite sense to adapt, restart and return to growth while maintaining consistently the very same quality.

So once again, we believe that between 2020 and 2023, we underwent a true structural test, a stress test and another important element that we do not mention very often is one of the bottlenecks of all the supply chains are raw materials.

You see, raw materials in this regard, we believe we are pretty robust and solid, thanks to 2 things. First things first is our relationship with strategic partners such as Cariaggi, our main cashmere supplier, in which we are shareholders alongside Chanel, with whom we also plan inventory levels. Here, of course, we are speaking of raw materials for periods of 12, 14 months in advance.

And the second element is our relationship with the most important Italian suppliers of raw materials, with whom over the years we have built the same type of relationship with our contractors, direct, specialized across different product categories, stable, based on trust, but also on the same culture, productive culture. With them, we do not just research new materials or sell easy proposal, but we also plan purchases well in advance.

I'd like to sum up by saying that we have a wide-ranging network, but it's very cohesive, at the same time, built some people in direct relationship. We have a great capacity for adaptation. So flexibility, elasticity demonstrated the most complex moments and a complete supply chain, which includes raw materials as well as manufacturing. So we are tackling this moment with confidence.

So now a couple of minutes on e-commerce and then discussion. So I believe that e-commerce is a great tool for luxury, especially for brand image. But before moving on, Michael Kliger, the CEO of Mytheresa, now LuxExperience, well, perhaps the very best luxury multi-brand online, he said something very interesting. E-commerce has ceased to be a place of convenience, of good price, becoming a place of service, novelty and experience. I see new interest because it is the most flexible commercial tool that exists.

But I really have found many interesting things here. About e-commerce, we worked on Callimacus, and many contacted us to pay their congratulations. So we enjoy a great relationship with the Silicon Valley people. Someone from the Silicon Valley actually saw in this new e-commerce, a great invention that might indicate a new path in designing and realizing websites in this as well as in other sectors.

And I'd like to now share with you a comment by Somesh Dash, partner at IVP, one of the major investments in Anthropic, who said the following. And this is verbatim. This is exactly the innovation needed to renew how websites are designed and function. It is a beautiful idea that could point everyone to new ways of making digital sites and experiences more engaging and therefore, more successful. We like this very much. This e-commerce, it's an important resource for our online dialog with customers. We believe new creative digital approaches, well, hopefully a bit unconventional, while they can attract clients' attention, they can encourage them to spend more time on our website discovering collections in an engaging way.

As Luca was saying before, early numbers are significantly higher than traditional e-commerce, indicating strong visitor interest in interacting with this new online experience.

Visitors tend to spend over 10 minutes on the website, double -- about double than what was before. They view 20% more products on average. So it's a very significant figure there. And of course, this is a novelty, so it's very appealing. So we are present in the U.S., Italy and in April 30, all over the world. We'd like to say that there are 2 companies that are among the most important worldwide with whom we are discussing possible developments. They have shown a tangible interest. So it is something really serious because it's a new kind of tool.

So as it happened, both in 2020, it is a very special time for mankind. We do not really know where everything is going to, so we have to be hopeful.

So at the beginning of March, during the classic quarterly meeting with all connected, we spoke about the outbreak of the Gulf War. But Moreno and I, we are the senior members, we reflected that every 6, 7 years, something happens worldwide. Let's start from 2001, the Twin Towers, followed in 2008 by the banks' crash. Then 2015, the Greek debt. Then 2020, the pandemic. 2026, Gulf war. As you can see, there's a pattern there every 5, 6 years. Luckily enough, this happens to us at a very favorable state situation for our brand. So we believe that it could be slightly less difficult for us. But we must be ready to change plans quickly, even daily.

Therefore -- so what we said, we decided to follow the teachings of Thomas More, oh my God, help me accept what we cannot change. Help me change what we can change. So we are retracing the early 2020 path during the pandemic. We held this Board meeting where we spoke about this. We want to talk and focus on business only. And we don't want to beat anybody else who wants to offer other different proposals. We want to focus on our business.

But at the same time, we -- since that we have more time because we meet less people, not directly linked to business, we must be more creative, innovative, kind, open to listening, extremely attentive to every single detail because this can make the difference. And if the difference amounts to 2%, 3%, you might be able to win over a customer, a loyal one. This is the way we are working nowadays. So please do not think that we underestimated and that we are taking it lightheartedly, but we really wanted to focus on how we are approaching the situation.

And now let's open to Q&A.

[Operator Instructions] First question by Andrea Randone, Intermonte.

I have 3 questions for you. The first one, in your press release, too, you mentioned a significant number of new clients in America. Can you perhaps give us a bit more color on our client base. We know it's very loyal. But if you can tell us how you see an expansion of these numbers?

Second question on store openings for the -- in the retail network. Last year, it all happened in the second half of the year. This year, already in the first quarter, you started opening stores. So what are your plans for the year in this regard?

And the last question I'd like to ask, important question, although a bit painstaking, you said it was 6% negative exchange rate in the first quarter. You gave an indication of a guideline of 2% negative in the year. If this guideline is still valid?

Well, we are not wizard and we don't have crystal ball. Andrea, I just wanted to point out that you are always the first one asking questions, so you win a cup, you win a prize here. So as far as new customers are concerned, the brand is cool. So we have many young customers, both genders who approach the brand. And this is very important to us. It's very interesting that the average age is 35 to 45.

As far as openings are concerned, Luca will tell you more. But Brunello still, until yesterday, we had -- we could have said that the dollar was going -- was very high. And if it had been yesterday, we could have said that we would close the year between 1, 1.5 or 2. One thing is important, and that is the average. Since when we went public in 2012, it was 0.3. Perhaps in some years, it just swings a little bit, but this is the average. We keep working, obviously for -- in the second half of the year. And for the actual, that's exactly what we were expecting Luca's commenting, because we knew that, that was the exchange rate until March.

As far as the network is concerned, no change in strategy. The timing of the openings is very much influenced by when we find prime locations. So it could be the first quarter, second quarter, also depending on when these opportunities actually happen. So we opened the 3 stores. We envisage that in the second quarter, we would open an important store in Vancouver in Oak Ridge, and then towards the end of the year at Abu Dhabi and Mexico City, between the end of this year and the start of next year. As usual, expansions play an important role this year.

In the third quarter, we will expand the Geneva store, the Toronto store and once again, saddling this year and the next one, the expansion of the Plaza 66 in Shanghai. Casa Cucinelli, as Brunello already mentioned, we are working actively on the location, and we believe that we can be ready for August.

Yes, Brunello is saying, as for the openings, perhaps if we manage to find the right location, we might change the timing, but the strategy is always the same. But the brand is experienced going through a good patch. And the collection is first thing that matters more than anything else. Luca?

And as we were seeing in the past call, it's a great momentum for our brands.

Next question by Chiara Battistini, JPMorgan.

The first question, in the 20% direct-to-customer growth, can you give us the split between volumes and the mix? You spoke about this mix that supports growth.

The second question linked to this strong performance in DTC. In terms of volumes and inventories, are you happy with the spring/summer inventory or given the flexibility in your supply chain, does this help you meet the accelerated demand?

And my last question is, if you can provide an update on the Saks situation. How -- whether the business has resumed now? And what are your expectations to this account for this year?

Luca?

I'll start from the last question, Saks. Things are going according to plan. Revenues is on the rise. We expect a good year with over 3 Saks, Bergdorf and Neiman Marcus. We planned important expansions within Bergdorf for both men's and women's. And we consider the results of the first quarter to be very important because it really proves the loyalty of many American customers to these luxury brands.

And as I was saying from the financial point of view, we receive -- we have been paid on time. We believe that, as Brunello said, the Saks affair was only limited to 2025 and it had only to do with the financial situation. That is still an opportunity for our company.

Retail performance. There's a great balance between volume-based and value-based growth. This is something we are always pleased about. We like the fact that even if the price goes up, the goods are sold because there is this desire to pursue the creativity of the brand, and this is the nature of our brand.

And on the other hand, we like volumes to grow and also the number of customers because this conveys the idea of the company that can look ahead to a bright future.

Inventory, Brunello speaking. As Luca was saying, customers are always seeking out very special things, and we are pleased with that. Inventory, we think it is modern, as we were saying before, because obsolete inventory mirrors obsolete stores.

Production, as Riccardo mentioned, everything is going well there, but we are ready, should anything happen. We are ready to adjust and it could happen overnight as it happened back in 2020. We have basically reapplied all the strategies that we have in 2020. You might say it was bigger in 2020. Well, we are prepared. We laid the foundation, prepared the ground. If it turns out better and if the truce holds, then it will -- we will be fine, but we prepare for the worst.

Next question will be asked by Natasha Bonnet of Morgan Stanley.

Congratulations on the really great set of results. My first one would be -- and this might be painstaking a little bit, I'm sorry, but any change in trends you've seen so far in April versus Q1, especially the exit rate from March?

And my second question would just be on the performance of the Middle East, if you could give us a bit more color. I think you said traffic in stores was down 50% in the month of March. Was that for the full month? And how were sales impacted in a similar level? And have you seen that evolve lately?

And then my last question would be on Saks. I know you had previously mentioned you were planning on converting 5 Neiman Marcus doors from wholesale to concession. Is that still a plan for this year?

Okay. Luca will start the answer and then Brunello will continue.

Okay. Luca speaking. For Saks, the plan is the same. Five locations have been identified for conversion during the year. And for the Middle East, yes, we confirmed that during the month of March, traffic decreased by 50%, 5-0. And as we said, the Middle East accounted for 5% of our revenues, both in terms of geography and nationality. So that means that the Middle East exports demand towards Europe as much as it receives demand from other countries.

Brunello, can you discuss trends?

As far as style trends, people look for quality more and more. We do knitwear, which we call couture knitwear. It takes capable hands. We need our people to be prepared, to be ready. Everything works well. Schools and academies work well. Something which is important is we have 25,000 people applying for jobs with us every year and nearly 4,000 of these people want to be working in production. And so they know that they have good salaries, good workplaces. But also, they know we're looking for more special things by the time. And also the fall/winter collection, just like the spring/summer collection, has got nothing basic at all. So at this time, as we've seen in the fashion shows in February, March, products are elegant, sophisticated, expensive, chic, very feminine. So Winter fashion seems to be going among these trends all the time.

For spring/summer, we have seen our friends at Chanel that presented very beautiful things and their stores are full of people. So it's a special and very beautiful time for fashion. There's a lot of innovation. People want very special products. Not necessarily unwearable, that's for sure, but pretty special.

Yes, comfort, for instance, is one of the specific demands of the recent fashion trends. But should we summarize one of the main new trends is exclusivity, uniqueness, quality and elegance and feminineness. So this would be the summary of the fashion trends we have seen in the last few weeks. So this is it for fashion.

So you'd find it pretty, let's say, energetic for fall/winter. We have beautiful collections for winter and hopefully, the famous geopolitical situation will allow us to play out at best. And as far as the beginning of April, we have recorded no significant changes versus March. Oh yes, I was forgetting about April. April is following along the same trend as March.

Next question will be asked by Chris Huang of UBS.

It's Chris from UBS. I have 3, if I may. The first one on the wholesale order book. I think in the press release, you mentioned that you only resumed shipment with Saks from mid-January. So could you give us some visibility on what to expect for Q2 in the wholesale channel? Is something similar to Q1 a reasonable level?

Secondly, I want to ask about the Americas DTC. I think you highlighted in the press release that the U.S. DTC channel continues to accelerate sequentially. Could you maybe talk about the underlying drivers here? And are you in any concern about any potential impact from perhaps a more muted stock market performance. I mean if we look at S&P 500 is not actually growing too much year-to-date. So I just wanted to hear your thoughts on that.

And last but not least, on the cluster performance. If I look at your regional retail trends, it is quite clear that the Japanese -- sorry, the Chinese, American, European consumers are up in the double-digit territory. Are you able to talk a bit about the Koreans, the Japanese? I'm just interested to hear other trends in other Asian markets.

Thank you, Chris. Let me answer that. Well, so far, even in the U.S. what I'm going to New York next Monday, and we see it very positively as we speak. I mean it's really successful in the United States.

Luca, can you comment on Korean and the other Asian countries?

Yes, of course. We have gathered campaign orders. We love these orders in terms of both quantities and quality. Well, for us, this is very important, says Brunello, because there are -- there's a clear indication that the level is getting higher and higher. So since these markets didn't buy much from, let's say, mid-market brands, there's more space for real luxury today.

Well, Chris, thank you for your question on Japan and Korea. These are 2 markets that are doing very, very well. Both markets appreciate quality very much, Japan in particular. And something we absolutely like is that both these markets are captured to serve multi-brands. And department stores are very, very important there. The customer loyalty towards department stores is unprecedented and unparalleled. I mean they have been loyal to department stores and multi-brand stores for centuries now. So this shows how contemporary, and how important well executed multi-brands are.

So Korea is actually becoming more and more important in our world, too. Our people in the design offices are working on this more.

Brunello speaking now and saying, well, Chris, 10 years ago, we would never imagine to do research in Korea. We used to go to the U.K., Germany, Belgium, whereas our people do go out and do a lot of research in Japan and Korea in particular. Korea is an extremely creative country. So this is very, very interesting for us.

And Luca speaking now, as you know, we do have wholesale and distribution agreements there that are really important for us. And last year, we opened a beautiful story in Gangnam, which is conveying a fantastic image for our brand. And when the owner invited me for lunch, however, the lunch was all Italian and garlic-free. Ms. Shinsuke invited me and my wife over and she said, we have prepared an Italian garlic-free lunch for you, which was fantastic, by the way. So that means a lot of mutual respect between countries. So generally speaking, we're very positive towards everything, with the exception, of course, of the war.

James Grzinic from Jefferies.

Congratulations for a fine quarter. I have 2 quick questions. We are happy to Brunello commenting. So starting from the Middle East. What was the impact on the wholesale order in the region in the first quarter? So can you -- did you already see an impact, or is it something that we will see later on? And then this rate 20% retail in the first quarter, do we have to believe that this contribution might be around 7%, 8%, given the timing for your openings in 2025 and the next?

Well, as for the first quarter, Luca speaking, there's balance between comp and non-comp. Then as part to the order collection in the Middle East, it had completed indeed before the start of the war. But Brunello comments, nobody asked to cancel any orders. So this is very positive.

The only thing that we said with them, we had some shipments of the summer -- the summer in March that we diverted elsewhere, but it was just the summer sales. So we can say that for the time being, we do not really feel it, this war.

And it is also incredible to acknowledge how everybody wishes to live normally. So stores were closed for one afternoon only as a matter of fact, and we saw images of other stores opening.

Brunello says, we speak to with America on a daily basis. They say that actually the war is ranked second or third in the news, whereas in Italy, in the Italian television starts off immediately with the war any kind of new edition. And now we have -- it was Ukraine, now Iran.

So I have been at war, Brunello says, or part of the war for 4 years because indirectly our experience, it was in America. This topic comes second or third when the news broadcasts. Well, yes, they are further away geographically. But Brunello says, personally, I feel at war -- have been at war for 4 years since when Russia started with the invasion of Ukraine in 2022. But I wish and hope that, well, truth be told, I was really scared, frightened the other night when the President said those words. I spoke with my wife, and you might even think that something tragic might happen, as it was the case for the Hiroshima bombing. So of course, you try not to think about that, but you have a seeping fear.

So we live in 2 worlds. On the one hand, we have the business, and we focus on that. And on the other hand, we have tension and fear underlying it all. And on top of that, I would say that humanity needs a new world order. And within this world order, it will take efforts to reach this new world order.

Well, hopefully, we are close to the -- to our destination of the -- well, yes, but when you have a President make you some statements, truth to be told, we will wipe out the whole civilization. I'm in love with the culture, I have the bust of Cyrus the Great at home, who ruled Persia between [ 509, 503 ]. He was a man, he was enlightened for mankind. If I hear someone say that they will wipe out this civilization, I was really scared. And I thank God, right in the middle of the night, I received the message of the truth -- truce, sorry, being signed. So there is some sort of seeping concern because we are the first generation who, well, never experienced a war directly.

Next question by Oriana Cardani, Intesa Sanpaolo.

My first question is about the performance of the European market in this first quarter. Were there some regions that outperformed or underperformed? And what supported growth, local demand or also tourist demand still positive?

And the second question concerns retail in the U.S. in the first quarter. In the press release, you mentioned an acceleration compared to the previous quarter. Would it be possible to have a precise figure for this retail growth?

Luca?

As far as Europe is concerned, Oriana, growth is well scattered across geographies. As you know, we -- may I say that if you hear someone complaining a bit more, it's Germany, the German market. They are complaining, Brunello says, but we can't say the results differ in German stores. But the Germans are a bit like that. The Frankfurter Allgemeine mentioned this the other day, but there was an article about me on the Frankfurter Allgemeine that mentioned pessimism.

And also tourism, Luca resumes, tourism is the high-end tourism and therefore, it is not at all impacted by the breaking out of the war.

As to the American retail, we can confirm that we had already experienced a particularly favorable second half of the year last year and this first half of the year, but it is a very responsive market. And it is welcoming our collection with a lot of appreciation. Brunello?

I have to say that the market is faring well. But then, of course, different brands, different stories. One thing is for sure, the market is in dire need for new and upcoming brands. This is the way it is. When you walk into your department store and you say, what's new? And you want a new restaurant in Milan, a new restaurant in Rome, you want new brands. So that's what the customers ask for. And as [ La Bruyere ] said in 17th century, one trend and one fashion will be replaced by another, and this one by another again. Today, we have Mr. Barilla, who is the member of our Board. And he said, well, yes, that's difficult, yes, but you sell pasta, we said to him. And if we get the connections wrong, we will have 20% less, whereas for pasta, everybody eats pasta and we always have sales. But for the time being, we are all focused on good things, although the war really is there. And now I want to believe in this truce because I think that nobody wants the war. But it's something bigger than us.

But why did you confirm estimates, you might ask? Because we believe in that because we need to have something to work on and also because we want to really be clear with all the local institutions, and we want everybody to know what we are doing. We don't want to hide behind the statement, we are listed, so we can't divulge anything.

Next question from Paola Carboni of Equita SIM.

Congratulations for this great trend in the first quarter. Two quick questions. Could you please get back to what you said about the latest weeks in March, where after the war broke, of course, there was an impact on the Middle East, but it was offset by other geographies that are performing very well. So could you please give us more details about them and some color -- add some color to that?

And then my second question is about Europe and wholesale in Europe in particular. I know you had asked your clients to be more, let's say, careful on digital channels. So I was asking myself what kind of response you've had from your customers here.

Yes. Brunello speaking. In December, Paola, we wrote a letter to our clients and said, let's collaborate, but you have very beautiful physical stores and be very careful with online stores because online may be a small percentage of sales, but they may be pretty dangerous for your image, and everybody understood and responded. So I think the atmosphere here is really good, Paola.

So for the quarter, yes, we did have a slight decrease in that cluster. But Paola, we're talking about a few hundred thousands of euros. So these are not earth-shattering figures actually. So of course, the spring/summer collection was particularly good. We are harvesting very good results.

But in general, I think we are perceiving, we are feeling a very good atmosphere on the brand. So the brand is healthy. It's in great shape. There were times when the brand was not as healthy as today, but these new collections, this new size before winter, we had a beautiful, beautiful welcome. And if you look at the new collections from other brands, including our beloved Chanel with the new designers coming on, there's a lot of excitement and good atmosphere.

Okay, Paola said, so there was a slight decrease, but nothing to worry? No, absolutely. Absolutely not. Also, the wholesale accounts are doing well. They have canceled no orders before winter, no particular problem. But we don't want to take this too lightly, considering the times we're living through.

So we'll see what happens in Q2. Retail might be growing by 15% to 16% and people will say that retail will slow down. See what I mean, Paola? That might be the general impression. But so far, the most important thing is they strike a peace agreement. We all need it.

And so as a company, we are not really suffering the cost of energy too much, not in any proportion as to alter our P&L because 63% of our production is handmade. Of course, we're not energy intensive. But we don't want to take things too lightly. Also because being too light at the moment like now, well, I've said it during several meetings, we're very focused, and we're very careful to anyone who suffers the consequences of war. We are at war. That's the truth.

Thank you. And for the other question?

Yes. Paola, you may imagine that the Middle East is 5% of our revenues and 1 month of war, while it was offset by a slight overperformance in other geographies. So we're actually talking about relatively small figures. So we know that the European performance was in line with our expectations, and America and Asia actually outperformed, and this has more than offset what we haven't obtained in the Middle East. Thank you.

There are no further questions so far.

Very good. So thank you. All the best for everything. And hopefully, we'll get together again in a few days' time and the war will be further away. Thank you very much.

This is the chorus call operator. The conference is now over. You may disconnect your phones. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

[Audio Gap]

[Foreign Language] Brunello Cucinelli, President; Luca Lisandroni, CEO; Ricardo Stefanelli, CEO; Dario Pipitone, CFO; Moreno Ciarapica, Co-CFO Senior; and Pietro Arnaboldi, Investor Relations and Corporate Planning Director. [Foreign Language]

[Foreign Language] So the most important thing is that next week, we have the Milanese Fashion Week, perhaps the most important appointment for our industry. And we have the international as well as the Italian press coming to the appointment. And we can definitely talk freely, speak freely with them because we have already disclosed our results. This is -- the same happens when we go to Pitti the early January.

Then the second item, having clarified and completed our entire relationship with the new course of Saks Global following its restructuring, now this allows us to share everything with you. And we are very satisfied with this new relationship, both in terms of sales and brand image.

So these new timings -- so for this call, we would like to also keep the schedule also for the years to come. As always, all 10 of us are here today. This is how we would like to proceed. I will present the key figures. Dario, our CFO, will go through the details. I will explain everything regarding Saks Global. Then I will go through a detailed growth plan for 2026, a couple of words on 2027. Luca will touch upon the international markets and then 5 minutes for the strengths of our business model in which we strongly believe and where we see great opportunities for the years ahead.

Now -- so excellent revenues with a turnover of EUR 1.408 billion, representing growth of 11.5% at constant exchange rates and 10.1% at current exchange rates. Normalized EBIT of EUR 235.9 million, representing an increase of 11.4%, margins of 16.8%, up from 16.6% the previous year. Net profit of EUR 142 million, an increase of 10.5% with an impact on sales of 10.1%, in line with the previous year. So the completion of the '24, '25 and '26, 3-year project for Made in Italy artisanal production has been brought forward by 6 months with extraordinary investment, and this will enable us to operate to function with confidence over the next 10 to 15 years. So in 2025, investment amounted to EUR 146.2 million, accounting for 10.4% of turnover. Net debt for the core business amounted to EUR 198.4 million, reflecting the significant investments made and the distribution of EUR 68.8 million in dividends.

The Board of Directors will propose to the shareholders' meeting called for 23rd of April 2026. So the proposal will be the distribution of a dividend of EUR 1.04 per share payout of 51%. Then the strong start to sales in the boutiques is also another important item together with a solid order intake for the upcoming fall/winter men's and women's collections. And this enables us to confirm for 2026 an expected revenue increase of around 10% at constant exchange rate, reflecting our long-term sustainable growth project. A gradual improvement in the financial position is expected, favored by the return to ordinary investment levels from 2026, having completed ahead of schedule the significant investment plan for the Made in Italy artisanal production.

On 21st of January this year, the new AI-based e-commerce website was unveiled. It was developed on the proprietary Callimachus platform with the aim of offering personalized tailor-made experiences and placing uniqueness, exploration, discovery right at the core. We believe that this new pageless website can generate benefits, both in terms of brand image and revenue. And I'll give you more color later on.

On April 14, in New York at the Lincoln Center, we will host the first of the world premiere of the documentary film Brunello: The Gracious Visionary, following the warm reception given to its absolute premiere on December 4 in Rome, Cinecitta. The premiere will continue in the major world capitals, and it will end in December in the Middle East.

And this will entail a lot of travel. So a year has ended that we are pleased to describe as solid, balanced and beautiful, marked by excellent results in terms of revenue, profits and also international recognition. These achievements should allow us to look ahead with confidence to a future of outstanding prospects, growth in the years to come, positive forecast and enduring prosperity. Markets across all geographies appear to be expanding in a healthy and harmonious manner where each fashion brand expresses its own heritage, identity and positioning.

We are receiving extremely positive feedback regarding the Callimachus platform developed by our Solomeo AI, our new e-commerce conceived to offer visitors an AI-driven digital experience through which they may discover the brand's collections in a manner that is consistent with the values that have always inspired us. At the core of Callimachus lies a new concept of website without pages and endowed with its own intelligence. It is a system that is capable of understanding and following each user's preferences, delivering a personalized, dynamic and pleasant and engaging experience in real time. Visitors are spending more time on the new e-commerce platform than in the past because the experience seems to be both stimulating and enjoyable. To conclude, in this first part of the year, sales continue to perform extremely well across all markets and then Luca will give you more color on this.

The excellent order intake currently underway for the Fall/Winter '26 collections, together with the positive feedback from buyers, the international press and our teams in our boutiques, well, this leads us to envisage with confidence for this year too, a balanced and solid revenue growth of around 10%, accompanied by the achievement of a healthy profit.

And now Dario, you know that you have been translated, so do not speed up too much.

Yes. Thank you, Brunello, and good evening, everyone. I will begin with an analysis of -- and please use the presentation to follow the slides from Slide 24 onwards of the presentation. The final revenue figures confirm the preliminary data released last January 12 with revenue growth of 10.1% at current exchange rates and 10 -- 11.5% at constant exchange rates. With regard to the other income statement items, Slide 26 shows that as at 31st December 2025, we report a balanced margin and cost structure with the reported EBIT and net profit increasing by 7.6% and 10.5%, respectively, compared to December 31 last year.

Normalizing margins for the extraordinary provision of EUR 8.1 million recorded during the year following the Chapter 11 filing of our client Saks Global. So normalized EBIT amounts to EUR 235.9 million or 16.8% of revenues compared to 16.6% in 2024, a growth of 11.4% reported there. First margin equal to 75.2% of revenues increased by 11.1% compared to last year, mainly ascribable to the sales mix by distribution channel, product mix and geography. Operating costs increased by 10.5%, reflecting the expansion of our fashion house.

Now moving to Slide 28 for a detailed analysis of the main cost items, namely personnel costs, rents and communication investments. So we can highlight that personnel costs as at 31st December 2025 amounted to EUR 255.4 million, and it's with -- increasing by 9.4%, slightly less than proportional to revenue growth with an impact of 18.1% as at 31st December -- sorry, it was 18.3% last year. As of 31st December 2025, total headcount stands at 3,327 FTEs with an increase of 226 FTEs compared to last year. And this is down to the targeted expansion of our retail network and also the strengthening of our artisanal production workforce as part of the project launched last year to expand in-house handcrafted production.

Now moving on to rent costs. So net of IFRS 16 effects, this cost amounted to EUR 218.9 million or 15.6% of revenues, up 19.5% compared to EUR 183.2 million or 14.3% of revenues as last year. This increase is mainly down to 3 different items: new and selected openings and enlargements carried out throughout the year, certain important lease renewals and partially costs that we began recognizing in 2025 relating to openings and enlargements expected in the coming months. As to the communication investments, they went up by 5% or EUR 4.6 million, amounting to EUR 96.9 million with an impact of 6.9% vis-a-vis EUR 92.3 million or 7.2% last year. So the above reflects our ongoing and increasingly strong focus on consolidating the brand's positioning within the absolute luxury segment as well as organizing family -- organizing small events that enhance the brand allure without affecting its exclusivity. As we said last August, major events were concentrated in the second half of the year mainly with communication investments accounting for 7.2% of revenues compared to 6.5% in the first 6 months.

So before moving on to the main KPIs below EBITDA, it is appropriate to briefly comment on transport and duties, which amounts to EUR 62.4 million as at 31st December '25 or 4.4% of revenues compared to EUR 55.2 million the previous year, 4.3% of revenues. This item went up by 10.4%, in line with revenue growth.

So to conclude on Slide 26, as at 31st December 2025, depreciation and amortization amounted to EUR 180.6 million compared to EUR 153 million in 2024, up 18% or EUR 27.6 million, mainly ascribable to new lease contracts signed during the period.

Consistently with our earlier comments on rents, excluding IFRS 16 effects, depreciation and amortization amount to EUR 55.6 million compared to EUR 49 million in 2024, with a slight increase in the impact on revenues from 3.8% to 4% for this year. Following the EBIT growth, as previously mentioned, and after financial management reporting net financial expenses of EUR 29.1 million and a tax rate of 28.5%, net profit as at the 31st of December '25 amounts to EUR 142 million with an impact of 10.1%, up 10.5% compared to last year.

Before concluding the income statement analysis, I would briefly come back to financial management with reference to Slide 29, sorry, where we provide the usual breakdown, highlighting so-called recurring component on which to project expectations for the year. Then we have a component which is linked to exchange rate fluctuations, and there is a component reflecting the effects of equity investments. The increase in the ordinary and recurring component is equal to EUR 15.7 million and is mainly attributable to -- well, for EUR 6.8 million, financial expenses and lease liabilities amounting to EUR 27 million as at 31st December '25 compared to EUR 20.2 million of last year, following new lease contracts signed during the period. And for the remaining part, EUR 6.4 million relating to the increase in net financial expenses associated with characteristic with net financial debt to the core business, which we will comment on shortly.

The exchange rate component shows an income increase of EUR 18.6 million, mainly reflecting unrealized net gains from currency fluctuations and therefore, subject to variation from period to period.

Now let's turn to Slide 30 and following. I'd like to share a few brief comments on the balance sheet items such as net working capital, investments and net financial debt. The net working capital, including other net current assets and liabilities, amounts to EUR 313.2 million with an impact on revenues as at the 31st of December 2025 of 22.2% versus 19.3% at the 31st of December 2024. In detail, well, the items were developed as follows: trade receivables at the 31st of December '24 amounted to EUR 82.1 million at 30 June 2025, EUR 103.6 million and EUR 101.2 million at the 31st of December '25, corresponding to 7.2% of revenues versus 6.4% last year. These dynamics reflect strong revenue performance, particularly in the wholesale channel and the net balance due from the Saks Global Group, which we expect to recover upon completion of the Chapter 11 procedure, against which we recorded an extraordinary provision of EUR 8.1 million, bringing our bad debt reserve net of utilizations to EUR 13.7 million at the 31st of December '25. Excluding the extraordinary event relating to Saks Global, we therefore consider our receivables position extremely sound with losses recorded during the year equal to 0.09% of revenues, which is, virtually nil, consistent with our track record.

Payment terms to suppliers, collaborators and third-party consultants remain unchanged with trade payables amounting to EUR 177.1 million versus EUR 169.2 million at the 31st of December '24, up 4.7% due to the business growth. Inventory impact on revenues stands at 28.3%, which is substantially in line with both the 30th of June and the 31st of December 2024 reported results, and this is a level that we consider as healthy and ordinary for our company.

Other net current assets and liabilities show a negative balance at the 31st of December '25, equal to EUR 9.7 million versus EUR 36.5 million in 2024, with changes that are almost entirely attributable to the fair value measurement of derivatives, hedging currency risks.

Moving on to investments. I'm on Slide 32. You see that as at the 31st of December 2025, investments amount to EUR 146.2 million, 10.4% of revenues versus 8.6% last year. And they relate to -- well, for EUR 84 million, significant commercial investments supporting the image of our fashion house and the contemporaneity of spaces, both in showrooms and in our boutiques. For EUR 46.1 million, they are referred to likewise important investments aimed at consolidating our strongly artisanal production capacity within the 10-year project that Brunello mentioned and for about EUR 16.1 million, well, these are almost entirely referred to significant technology investments.

Finally, the net financial debt for the core business on Slide 33 amounts to EUR 198.4 million or 14% of revenues at the 31st of December '25, in line with what we discussed in our August call versus EUR 103.6 million at the 31st of December '24. The 2025 net financial position for the core business reflects the positive operating results for the period, the significant investment plan, both in sales and real estate and changes in the net working capital as described above as well as dividend payments totaling EUR 68.8 million.

Thank you all for your attention. Well, Brunello, well, I concluded my remarks. I would like to hand the floor back to you.

All right. So before summarizing the 2025 and talking about the 2026 and '27 projects, I'd like to go into the detail of the Saks Global issue. We have had a great -- more than 30 years of relationship with Neiman Marcus, Saks and Bergdorf Goodman, which were brought together last year under Saks Global, but we continue to regard them as 3 distinct department stores in the world of fashion that are extremely important and among the finest in the world. We have grown consistently in both revenue and brand image. And in over 30 years, we've never lost a single donor. So we're not commenting on the financial merger. But for us, they remain separate brands, as I said.

Only a very small amount of end customers overlap between Neiman Marcus and Saks. And this means that in the eyes of the final client, the strong and distinct value of the brands, Neiman Marcus, Saks and Bergdorf Goodman clearly remains. The spaces we have with them are very nice. They're beautiful, significant, located in equally important locations. Broadly speaking, our relationship with them is about, well, half concession and half traditional wholesale, representing approximately 6% to 7% of our total company revenues. For us, business in 2025 has performed very, very well with all 3, Saks, Neiman and Bergdorf, both menswear and womenswear and the image, the visual presentation and lifestyle positioning have remained at a very high level.

Since January, there has been a new team in place. We think they are highly capable. We know them very well because the team is led by Geoffroy van Raemdonck and Lana. They are outstanding product experts, and this is something we've always appreciated. They're going -- they're coming to Milan next week. And so first and foremost, the discussion is about product, then about brand contemporaneity, visual identity and lifestyle and only afterwards about other topics. The entire team performed very well at Neiman Marcus. We met them in New York, and they clearly explained the group's new strategy, which is very clear, is based on concentration and elevation.

This means closing nonprofitable stores, which incidentally do not concern us and carefully selecting brands in order to remain firmly positioned in the true luxury while including contemporary brands. So we are closing this 2025 cycle with them by booking a provision of EUR 8 million to cover any potential losses, as we said, which allows us to feel very comfortable for the future. These would represent the only potential losses in more than 30 years of track record with them. Since the end of January, we've begun this new phase. We've resumed deliveries. We are already receiving payments on time, and they are preparing orders with extreme care for the autumn/winter 2026 men's and women's collections.

The feedback on the collections has been so far truly exceptional. They said, you have created the 2 most beautiful collections in our history. Hopefully, that's true. Well, these assessments align perfectly with those of our other clients, the teams in our boutiques as well. Well, the best objectives that they've used are rich and unique. We like them very much. They've told us that sales of our brand have been performing well at the beginning of this year, too.

And this is a very important moment. So please note and remember that we always consider the 3 brands together, but separate. So we expect a year of solid growth, not only in terms of revenue, but also in terms of image by -- from Goodman, we will have 2 new spaces.

So final conclusions for the year 2025, which is for us the second -- the end of the second year of our 5-year plan '24 to '28. 2028 will mark the 50th anniversary of the company. We have defined this year as record-breaking in terms of growth, profits, investments and also for the recognition. Revenues increased by 11.5% at current exchange rates and by 10.1% at constant exchange rates. Throughout our history, our 30 years as a listed company, we have achieved an average revenue growth of 13.7%. Well, in 2021, '22, we recorded a 30% growth, which was rather unusual, but 13.7% at current exchange rates and 13.4% at constant exchange rates.

EBIT showed a slight improvement, 16.8% normalized because of the Saks-related topic. Net profit, 10.1%. Inventory remains healthy, high quality, well balanced as has always been the case for our company. Please note that we work in the apparel world, and this has been our average value since we became public. If inventory were a bit older, the image in the boutiques would be old styled as well and not contemporary any longer, and this would have an impact on sales.

Investments, well, we reached a peak in 2025 with 10.4%. However, now that we have completed all our factories and the expansion of our headquarters, well, we feel well positioned for the next 10 to 15 years at net debt maximum level, but we consider that a healthy level over the next 3 years. It will decrease as investments will normalize at around 6% mainly related to commercial activities. But do not think we have reduced investments. They should be viewed in combination with the last 3-year period during which they accounted for approximately 9% on average dividends and change to 50% of the net profit.

So how do we envisage 2026 in quite a tangible way? Sales in the first part of the year have been excellent across all geographies. And Luca will go into details shortly. We expect healthy growth of around 10%, EBIT growing more than proportionally, investments at around 6% and communication investments between 6% and 6.5%, what was 6.9% last year because in the past 3 years accounted for about 0.5%, but there was the film project, which ended, then inventory stable as a percentage at around 28%. Net debt improving, also thanks to lower investments in artisanal production. Dividends, as usual.

So it seems to us that at this moment, the brand image is very clear, and it has a very well-rooted identity in menswear and womenswear, style identity in absolute luxury and identity rooted in exclusivity, craftsmanship and quality, the identity of the thoroughly Italian company, including its idea of sustainability.

All of this supported by the recognition and accolades received in 2025. And the film was released in 2025. And in 2026, the movie will tour the world starting in April in the United States. How we see 2027, but only in general terms, just to give you some visibility. So no changes in strategy, healthy and balanced growth of around 10%, slight improvement in EBIT. And overall, we expect a similar -- a performance similar to 2026. And if that happens, we would be very pleased. Luca, now it's up to you. Thank you.

So let's now step into 2026 based on -- building up from 2025. The first part of the year brings us 2 very positive pieces of new excellent retail sales and a very, very positive Fall/Winter 2026 sales campaign.

Let us begin with retail and starting from the product. So the first month of the year is always a pretty sensitive period because there is the overlap of 2 collections, winter and spring/summer. Winter sales continued to perform pretty well. But it was the first deliveries of the spring/summer collection that truly provided a boost to our sales. This means that we worked effectively on the season launch in terms of timing, proportions and weight and visual merchandising. But even more importantly, this means that the creativity of the new Spring/Summer '26 collection currently being sold in stores has been highly appreciated by end customers. And this represents a very strong guarantee for the rest of the season. So this becomes even more meaningful when you understand that this is consistent across all geographies and even balanced between men and women. So we can now confidently say that we can rely on a very beautiful and very fine spring/summer collection.

Now from regional standpoint, still within retail. North America, excellent sales and even with a slight acceleration compared to the fourth quarter of 2025. Europe, very good, thanks to the crucial role of local clientele. And particularly positive and immediate has been the contribution from the flagship expansions in London and Paris, along with the widespread growth across the rest of the European network.

As you know, we are very closely linked with a very high -- we look up at Hermes, and we greatly appreciated Axel Dumas' remark talking about expansion, saying that it is the customers who push the walls of the stores. It is a great expression. So we therefore want to thank our customers in London and Paris who have enabled us to make these stores even more welcoming and vibrant besides them being bigger. In Europe, we had no new openings throughout 2025 nor in this first part of the year. Therefore, the result is definitely on a largely comparable basis. Asia, excellent sales there with China growing significantly and consistently week after week from the very first days of the year, regardless of the different timing of the Chinese New Year. And when we take a look at our results in the past 12 months, we can say that store by store, we have achieved a new and higher level of performance.

Now taking a look at our retail channel as a whole overall, we can say that it continues to benefit on the one hand from growth in the number of customers period after period between 5% and 10%, thanks to the onboarding of new clients and on the other hand, an increased average spending by existing customers. These figures highlight both the attractiveness of the brand and also our ability to create long-term value in customer relationships. And they seem to outline a very solid and reassuring evolution of our customer portfolio.

The growth in average retail selling price is higher than the increase in average list price due to a sales mix that basically favors more special products. Well, whenever this occurs, we view it as a very healthy element for our sales and a strong representation -- and also for our positioning and a strong representation of the steady elevation of demand at the high end of the market. So based on this, we expect a very strong retail quarter in which the exchange rate effect, the ForEx effect will be noticeable, but then we believe that it will normalize over the course of the year, especially from April, where there was high volatility last year. But even at current exchange rates, however, we expect a very positive performance.

Let us now turn to wholesale. We have completed the men's sales campaign, and we are approximately halfway through the women's campaign for the Fall/Winter '26 collections, but we can already say that we have received very flattering feedback on both collections. And we consider our order collection management to be excellent. So during the meetings we had in our showrooms, we have basically restated the message from our Christmas letter to send to our 400 multi-brand clients, probably the best of the finest in the world. In that letter, we asked them to -- even in the online activities, to basically try and achieve the very same nobility that the brands are recognized for in the physical brick-and-mortar world. We're very pleased that our clients have embraced this message, and we are highly confident that the wholesale channel will increasingly contribute positively to strengthening the modern and exclusive perception of our brand. The strength of the collection has allowed us to minimize the impact of this request on orders.

So we expect to close yet another quarter with slight growth in the wholesale channel, but more important than the performance in the single quarter, however, is the assurance that multi-brand clients worldwide have closed a strong winter season with us and opened the summer season with sell-out levels that are even better than last year.

In conclusion, the results and indications from this start to 2026 reinforce our conviction that we can experience yet another year of growth around 10%. We expect growth to be more concentrated in the retail channel and well distributed across regions, always moving towards an increasing geographic balance.

Now 8, 9 minutes devoted to the main topics and then, of course, discussion and take your time for that. So we have a fashion house that accounts for 75% and lifestyle accounts for 25%. And we are mainly a ready-to-wear brand and only 25% in apparel and 15% accessories. This is how we want to grow. And this is how we believe we were recognized last year in London with the Fashion Oscar we received last December, a clear identity in Italian men's and women's style of true luxury, great craftsmanship, quality and exclusivity. So therefore, we must remain exclusive and also strict in our communication, especially online as we have always tried to do.

So we account -- retail accounts for 68% and wholesale 32%, expect to drop to 30% in 2026. We have 136 directly operated stores, a few openings each year, just 3 or 4 expansions of existing stores and occasional relocations and between 470,000 and 500,000 customers annually with about 5%, 10% new customers added to the equation every year. And then we organize these events, these small-scale events worldwide, gathering about 100, 150 clients per evening. And we find this format to be very important because you can speak to anybody attending. According to recent measurements, customers spend about 30, 31 minutes in our boutiques. A year ago, it was 16 minutes, 50% men, 50% women.

Casa Cucinelli are very important. We currently have 9 worldwide. We will open the 10th in Shanghai in early September, and we will organize events there. Then revenues per country. So today, 37% North America, 35% Europe, 28% Asia, of which 13% China. Perhaps in 3, 5 years, we expect the split to be as follows: 33% U.S.A., 33% Europe, 33% Asia, with China possibly reaching 18%, 20%. We started late in this country, but we see great opportunities in the years ahead.

Then production and sustainability. We collaborate with approximately 400 SMEs, 800, 500 people, 80% of whom are located in Umbria, Tuscany and Marche.

Sustainability. So Ricardo was included by Time in the Time 100 Climate 2025 list as one of the most influential international leaders in climate action. We have always believed in sustainability: in environmental sustainability, avoid waste, recover everything possible; human sustainability, meaning how much you earn; spiritual sustainability, how you treat others; technology-related sustainability, how long do I have to be online for business reasons; and moral sustainability because we are a company based in Italy that works in Italy, produces in Italy, manufactures in Italy and striving to work for the future of our nation, and we also pay our dues here.

A very important topic. In 2025, we had around 3,400 employees with approximately 250 new hires per year. Employee turnover is extremely low across the company. However, please note that we never implemented and never will implement working from home or remote working for 3 main reasons. Because that way, if you do remote working, there is no distinction between private and work life. This jeopardizes collective creativity and especially young people learn almost nothing. And they basically come up with the idea that they will always work 3 days per week only. This is the reason why we decided to ban it. We have always wanted to work 8 hours a day, very focused with 1.5 hours in the company restaurants. So if we were to remove this no remote working rule, turnover in the company would be almost 0. This does not mean that we do not consider or hold human flexibility extremely high, which has always been a tenet of our company. So we all start at 8, but if you need to -- if you have a medical appointment, you can definitely take it. And the vibes in the company are pretty pleasant.

So about prices. The pure price increase in 2026 is around 3%. Part of this depends, even though a negligible one, depends on the new clothing industry labor contract in Italy, which was renewed in 2025 after 6 years of unchanged numbers, EUR 60 a month after 6 years, I'm not so sure that it will be easy to recruit new labor. But we have 20,000 job applications per year. We only need 300, but you should consider that out of the 20,000, 4,000 are willing to perform labor work, of course, high-quality artisanal work.

Then there are about 100 people in the design team, 20 of whom are top level, plus myself as a coordinator. That's why you can definitely be sure that even if I was to pass away, the company would not be stuck. My time at the company is 80% devoted to product, including visual, stylists and lifestyle. We have the academy in Solomeo for the arts and crafts, and we have a lot of confidence, thanks to that, that the value of the hamlet, Solomeo, that's very important. Every year, we welcome about 13,000 to 14,000 visitors, including customers, friends, journalists, celebrity, politicians, and I have a problem. The only person having a problem is me because I have to dine with someone every single night. So we believe that the village of Solomeo gives us -- this hamlet gives us a strongly rooted identity and uniqueness. And honestly, we work daily to preserve it.

A couple of minutes on Callimachus. Callimachus is based on a new concept of a website. It was launched in January. Well, an important thing, well, usually, people tend to stay 4 minutes on our website, and now they stay 9 minutes, and they usually visit 3x more products, and this is very important. Just let me share a couple of feedbacks. Well, companies that are leading in the world, so leading in all industries. They said, for example, a truly exciting turning point for digital storytelling in luxury; or another feedback, a clear break from the traditional rules of e-commerce, a radically innovative experience, truly brilliant or congratulations on this fantastic project. Congratulations on the wonderful work you've done, we would love to meet you.

Groq, for example, I can disclose this name, the one that NVIDIA bought for $20 billion. Well, Groq said that's their feedback, Callimachus reinvents websites and e-commerce. Solomeo AI has launched an online platform based entirely on artificial intelligence, transforming Brunello Cucinelli's e-commerce into a personalized shopping experience that reflects the attention and care typical of a luxury boutique. Another very important company says a true innovation that pushes the boundaries, highly inspiring. And then another one says beautiful website that truly represents your manual work and craftsmanship.

This is the feedback of 10 leading brands in the world, which wrote to us, and we like this very much. Where we started this project as a sort of a hobby. This is not our core business, but we reached a great success.

Conclusions, we think we have great opportunities in the years ahead, provided we continue to develop contemporary collections. So first and foremost, we have to focus on products. The Fall/Winter 2026 men's and women's collection are the most beautiful ever as reported. But having strong collections in stores gives us a bit more peace of mind between July and December now regardless of what happens than worldwide. So we are experiencing a very positive moment for the brand image and a brand which is Italian, artisanal, contemporary and exclusive in terms of luxury.

So thank you very much for your attention. We can open up the discussion now.

[Operator Instructions] The first question from Andrea Randone, Intermonte.

I have a first question, which may be a bit trivial, a bit banal, but this is to better understand the guidance at constant exchange rates. You are talking about a quite heavy exchange rate with a quite heavy impact on the first part of the year. Can you give us more flavor? Are you talking about 2%? Is this going to be the impact on the full year? Is it a reasonable value?

And then I have a second question. Can you summarize again the elements that lead to an improvement in cash generation? You talked about normalization of investments, stable working capital. So these seem to be the main elements for an improvement in cash generation. But this is certainly -- well, the normalization of cash generation is certainly important for the market. So if you can please recap these elements?

And the third question concerning business. I'm curious to know whether you were happy with the take-up of Harrods in London or well satisfied or happy with similar initiatives. Do you think they are effective?

Andrea, I will answer the second question. As far as exchange rates are concerned, we estimate 1.2%, 1.5% to 2% for the full year. And the first -- in the first quarter, we may have 4%, 5%. But then from April onwards, well, we think it will be 1.5% for the full year. Then as far as the take-up of Harrods is concerned, this was a beautiful success, honestly speaking. Now this year, I think, they will celebrate the 130th anniversary or something like that.

So Luca will take the other answers.

Well, first of all, we want to go back to an ordinary level of investments in the past 3 years. As Brunello said, we had a very high concentration of investments. For next year, we envisage to continue with commercial investments that are absolutely ordinary. The extraordinary part of investments dedicated to factories will no longer be there. So please, Andrea, do not think we've dropped our investments. That's very important. Investments remain the same.

Next question, Oriana Cardani, Intesa Sanpaolo.

I have 2 questions. First question about the first margin. Do you expect a result for 2026 in line with the 2025 result? Or do you see any potential for an increase as a percentage of revenues?

And the second question is on fragrances and glasses, eyeglasses. Can you comment from a qualitative and quantitative viewpoint, the performance of these 2 categories last year? And for eyewear, are you expecting to extend the partnership with EssilorLuxottica on the smart glasses part?

Luca will take the question on eyewear. And then as far as revenues are concerned, we expect to be in line with what we said. And well, if we can increase that by the end of the year even further, would be even better, but that's it. As for fragrances and eyewear, well, they have been performing very well, especially from an image viewpoint because we have positioned them the right way, as EssilorLuxottica said. So we are very important for them like Chanel. Well, with Chanel, they make huge numbers, but it's in terms of research and positioning. Fragrances are very high end and the response rate is very high.

Do you want to add anything on eyewear?

Yes. This was the very target when we launched both categories. In these new categories, we wanted to achieve the very same positioning as the one we had in apparel. And I think we've managed to do so. And then as far as extension to smart glasses is concerned, for the time being, this is not in our plans, in our pipeline. However, we have a small high-end eyewear collection in the pipeline with gold frame. So we really want to focus on that. And these are glasses with a price ranging from EUR 5,000 to EUR 9,000. Well, going back to the previous question on first margin. Well, the question was on the first margin and not on revenues, but nothing changes. The final number for 2025 is a very good reference for the results that we are planning for 2026. Well, this doesn't mean that we do not -- we're not happy if we increase by 10 or 20 basis points, but the outlook that we have can be confirmed.

Next question from the conference in English, Chris Huang, UBS.

I have 3, if I may. First one, just a follow-up on the first margin. You said that 2025 is a very good reference for 2026. But I'm just curious about the actual drivers of this first margin expansion in 2025. I think in the press release, you mentioned channel mix being one of the key drivers, but actually channel mix wasn't that big of a difference when it comes to year-over-year performance. So just wondering why gross margin has been so strong in 2025, the drivers behind? Secondly, on the start of the year, I think, Luca, you provided a lot of very helpful comments on the retail channel by different regions [Audio Gap] .

Have new colors on the geographies. So I would start from this question. So as we said multiple times, we do not believe that our business is mature. And the reason being that we have new customers across all different geographies. Then as to the conversion to -- concession to Neiman Marcus, you should consider 3 brands. [indiscernible], I am not talking about the Saks Global gathering together all the 3 brands. We see them as separate distinct brands. We have a very balanced relationship and then we can move on with these 5 doors per year.

Then stores. So the openings are confirmed to Mexico City, Abu Dhabi. And in the first part of the year, we strengthened our network in Florida with 2 smaller stores and then in Wuhan, China. Then you see expansions will play a fundamental role in 2026. In Geneva, we will expand the store in the summer, then we will expand the store in Toronto and also Plaza 66 and Shanghai and also the opening of the Casa Cucinelli Shanghai. [ Paula ], I think we can close at around 140 stores. And we like this. We like the stores to be prime quality, the right size and also the number. We believe in exclusivity.

[Operator Instructions] The next question, a follow-up question from Andrea Randone, Intermonte.

I have a short follow-up question. You mentioned progressive results throughout all geographies. I know that tourism doesn't play a very important role for you. But what about Japan, considering that there are no longer Chinese tourists going to Japan? Is this having an impact on your sales?

Yes, that's true, but this is not new. Last year, Japan benefited much less versus 2024 from tourism. 2024 was an extraordinary year in terms of tourism. However, sales are -- Chris, I have -- well, for you, please call Pietro at the end of the call. So don't worry, you will get all the answers you need. So please call Pietro at the end of this call. Thank you very much. Thank you.

Let me just point out one final thing. Please remember that we always focus on absolute luxury on these markets. So please consider where we are in the market because we always say we work in the very high end of the market in the top luxury market. That's very important.

All right. So thank you very much. Thank you. Chris, please call Pietro. Thank you very much. Well, for the people living in Milan. So remember, next week, we have the Fashion Week. And on Wednesday, we will also get feedback from the press on the women's collection. So thank you very much for this because now that everything has been disclosed, we can speak freely about everything. And so we have a lot of confidence and peace of mind. Thank you very much. Thank you. Bye-bye.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good evening, and welcome to the end of year update of the fashion house, Brunello Cucinelli.

Speakers will be Brunello Cucinelli, 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.

[Operator Instructions] And now I'd like to give the floor to Brunello Cucinelli.

So here we are. Good evening. It is a pleasure to have you back, investors, analysts, journalists. So this is the last call of the year, which we have been holding regularly since 2020 because you might remember that during the pandemic, we decided to organize it, this call because otherwise, we wouldn't have had any contact with you from mid-October until March. So it's something that we have grown to enjoy. It is an important call because some -- in some ways, it represents a pre-closing of the year. So we would like to ask you the following.

Everything that we will be talking about, you should consider that it concerns absolute luxury. So we believe -- and also ready-to-wear because we are a ready-to-wear company and our fashion house is broken down as follows: 85% ready-to-wear and 15% accessories. This has always been the case since when we went public. So this is important that you bear this in mind.

So there's all 10 of us here. And so how would we like the call to proceed? First things first, we would like to provide you with the end year forecast for 2025. Just 15 days are left with excellent results. Then honestly speaking, this year, we have been harvesting, so to speak, what we expected, perhaps even more. And then a forecast of 2026 with a healthy growth. As you know, it's the figure, it's 10%, and it's part of us.

So what are we working on and the strategies? So this is a very, very, very favorable momentum for our company, for our lifestyle. We have many opportunities to seize. So we were saying this morning at the Board meeting, and we must be good at governing growth, trying to managing growth while remaining exclusive, high quality, highly artisanal, contemporary in our products, contemporary in our boutiques. So we have completed all the factories dedicated to artisanal production, the inventory with detailed explanation. And then Luca will give you an overview of the global markets with the events planned for 2026. And Riccardo will be dwelling on the production.

Then awards and recognitions. This has been quite a good year, remarkable year. So Carolina, my daughter, Vice President. She was listed among the 50 Women in Power 2025 in Fashion and Retail by WWD. Riccardo was included in the TIME 100 Climate 2025 list. So he went to Brazil to be presented with this accolade. On December 1, we were presented with the World Fashion Oscar from the British Fashion Council. And this is really one of a kind. Then we -- a major event in London was held last week. The movie was premiered last -- on December 4. And then in mid-January, we will be launching the new e-commerce website. And we believe that it will be very important, not just for the results, but also for those who joined the website and understand more about our company.

So let me read out the press release. 2025 is proving to be a record year for us, both in terms of numbers and brand image. Excellent sales throughout the year allow us to envision a revenue increase at constant exchange rates between 11% and 12%, higher than our expectations at the beginning of the year with growth at current exchange rates of around 10%. The fourth quarter promises to be very, very positive with truly pleasing feedback on the style and expected double-digit growth at constant exchange rates, in line with the trend of the third quarter despite a significant -- a decidedly significant comparison base.

In November, we presented the Fall/Winter 2026 women's precollection to our multi-brand clients, receiving particularly flattering feedback. And also, we presented it to the managers of our direct stores receiving equally positive comments. And this collection was considered highly innovative with a very high rate of creativity and innovation. And all of this follows a significant volume of orders already in our portfolio for the spring 2026 season. So we, therefore, confirm a projected revenue growth of around 10% for the year 2026.

2025 represents a year of reaping great rewards in terms of image, both for our fashion house and for Brunello Cucinelli, for myself and my family. So in April, I was -- I received an Honorary Doctorate in Architecture from the University of Campania, Vanvitelli. In September, Carolina, my daughter, was included by the prestigious magazine, WWD in the list of 50 Women in Power. In the first days of November, our CEO, Riccardo Stefanelli, was included by TIME in TIME 100 Climate 2025 list. On December 1, we had the event in London because in -- with Harrods, we took over the 26 windows. It will be displayed there until the end of January 2 followed by the Spring/Summer collection.

And then in the evening, on December 1, the British Fashion Council awarded us this so-called Academy Award of Fashion that was, other honorees were Lagerfeld, Prada and Tom Ford last year. And then on December 4, there was the world premiere of the movie and actually between -- and last night, it was the first time that it was released in Italy in 250 theaters. And in mid-January, we -- there's a scheduled launch of the new AI-based e-commerce site and our friends in the Silicon Valley, they called it a true invention.

So what about my comment? So as 2025 draws to a close, we can look back on a year of excellent results in terms of revenue, profits and great image for the brand. The past year has been exceptionally generous to us, offering many blessings as a company and as individuals, we have received a range of truly special recognitions that have filled us with joy and optimism for the years ahead. Our gentle luxury has been recognized as a model of creativity through the prestigious Outstanding Achievement Award, which I have the honor of receiving for the British Fashion Council. A documentary film telling the story of my life was brought to the screen with a masterful touch of Giuseppe Tornatore, who captured my lifelong vision and transformed it into poetry. He's a poetry, I believe, beautifully accompanied by the moving score of Nicola Piovani, who was really able to translate all this in a very moving manner because we share the very same childhood with them.

My daughter, Carolina was honored by a friend at Women’s Wear Daily. So she was included among the 50 Women in Power 2025, while TIME 100 Climate recognized my esteemed CEO, Riccardo Stefanelli, knowing that all this stems from our commitment to Humanistic Capitalism and Human Sustainability. Well, this fills us with immense pride and motivates us to continue our work with renewed energy. Finally, and with great excitement, we are thrilled to announce that in mid-January, we will launch our new AI-powered e-commerce website, which our friends in the Silicon Valley have described as a genuine innovation.

Concluding with a strong Spring/Summer 2026 order book and excellent winter sell-out performance, we expect healthy revenue growth of around 10% for 2026. So how do we see the year-end 2025? So revenue growth at constant exchange rates of between 11% and 12%, current exchange around 10%. And as you heard before, we call it a record-breaking year. As to the exchange rates in our history, we have always had a -- you see a very low swinging, so around 1%, perhaps something more this year, perhaps next year, too. EBIT margin slightly improving compared to 2024 as planned. So we always seek a fair and balanced level of profit. And this concept is particularly strong -- strongly felt among the younger generations. It is an important topic.

So no client ever tells us you are extremely expensive even though you know our price levels. This gives us confidence and strength in believing that we are on the right path. And importantly, in all the recognitions we are receiving, there is always a reference to fair profit, fair growth, fair wages, workers' conditions. And this means that Human Sustainability is a very, very important and widely felt topic.

Then Sustainability. Riccardo, you will talk about this. I already mentioned it. It's very important because we worked hard on this, and it is a great gift for Riccardo and everybody. Very important investments in artisanal production. And as you know, we have doubled the Solomeo factory. We are nearly -- we are already operational. So -- and the whole plan you know '24, '25, '26, we completed it this year, roughly 6 months ahead of schedule. So this year, we invested around 10.5% of revenues. Clearly, when expanding factories, these are always plans with a 10- to 15-year horizon if you want to have a balanced growth that we constantly pursue and believe in. So around 10%, of which 4% is price mix and 6% the number of pieces. And this idea of growing around 10%, we are always pleased with that so that the brand they -- can remain exclusive both in terms of stores, we can govern quality, craftsmanship and manual excellence.

So please make sure to include in your projections our 2026 investments at around 7% of revenues. There is still some tail of investments for production of this year. But in 2027, there will be 6.5%. You can factor this in because we will see it in the coming years since there are not many commitments in terms of production. But this is the organization for the coming years. And this way, we feel pretty confident. So you see we always need to be modern in our product. We should never lose out on exclusivity remaining true luxury.

So a few days ago, we said, well, we met -- we said, let's meet for 30 minutes, end of the year, maximum focus. So we were very focused and we asked ourselves. So if we were to buy a brand in true luxury, by the way, consider we personally don't want to perform any acquisitions, mind you. But which brand would you choose? Where would you feel fulfilled? What do you feel is exclusive, well crafted, long-lasting, sustainable for the next 10 years? Well, when this question was asked, well, no one actually answered. We could not single out a single brand. This does not mean that there are no brands like that, but this means that exclusivity that we keep hammering about is still a very important topic.

Then inventory, it's perfectly aligned with our model, around 28% of revenues from the IPO onwards. But if the inventory were old or obsolete, that would mean that stores would be obsolete as well. So we went public 13 years ago. And the most important thing is that at the time, we were 85% ready-to-wear, a bit more on the women's side. It was 60-40, whereas it's split 50-50 women and men today. But we're still 85% ready-to-wear, and we do firmly believe in it. And there's not many others that do this and 15% accessories.

So going back to the idea of inventory, we do not really like evergreens. We hardly ever talk about them. So today, for instance, if you wear men's jacket, we were looking at the collection for Pitti for January this morning. So I mean, if you look at a man's jacket today, you can understand if it's last year's because it's 2 centimeters shorter, the buttons are a bit higher. So even a blue cashmere men's jacket cannot be an evergreen. It's got to be modern and contemporary at all times.

So we are living through a good time and a beautiful moment in terms of style, and this is also reflected in the quality of sales and the year is about to close in a year which we consider to be a great rebalancing for the entire fashion industry. France sales were very strong, both in quantity and quality and above all, in the style and identity of the brand. I don't know whether we're right or not. But today, we consider ourselves to be 75% ready-to-wear. And generally speaking, we consider the remaining 25% of what we do is lifestyle.

Now multi-brands and pre-collections. 10 days ago, we presented the precollection for women for Winter '26. And we received very important judgments on the creativity and modernity of our collection. And this is a major issue. So of course, this puts us in a very good position also versus our mono brands because not all of our store managers actually are extremely experienced in what we do. But when you know that for the next 6 months, you'll have in the market a contemporary collection, [indiscernible] and fresh, you start off on the right foot. I mean you know that the goods you have in the stores are very contemporary. And so we're really connected to the 400 mono brands we have -- multi-brand, sorry, we serve globally. They're very unique and prestigious.

Now for many of you and maybe especially for the younger amongst you, when you hear multi-brand, do you think of department stores, which is not necessarily the case because there are specialty stores globally that are absolutely beautiful. They have century old stories, and they are very knowledgeable about fashion. But it's quite normal. You don't know these stores. Managers in their 40s or early 50s have not grown up with these stores in mind.

Now let me say something nice about this. A couple of months ago, there was a meeting in Rome, kind of symposium, where the major European multi-brand stores met, and they asked me to go and speak at their meeting. And I told them they are particularly beautiful. They have a century old story, but their physical stores that are really unique and very beautiful do not necessarily always match the image they project online. This is quite challenging, isn't it? So they actually agreed they are prepared to improve their online image compared to the physical image of their stores. And from our side, they are now receiving right now from our company, a letter, where we thank them for the 10 years old or 20 years old relationship and the great image we built together. But also, we urge them to be more careful to what they do online.

So why is it so? Because I told them that at the end of the season, as long as the Internet just didn't exist, so at the end of each season, whatever unsold goods remained, which may be odd sizes or whatever, they were normally sold with systems which were as old as the world. So they came from stock. But as soon as the Internet arrived, even 5 pieces at a special discount even though they were the outsized out, were quite detrimental for the brand image. So everybody made a commitment.

And looking at this with a special eye, and we actually discussed this at the Board meeting this morning, we had about 500,000 customers globally, 480,000 to 500,000. And actually, no one ever complained because we believe that the actual loss of exclusivity of a brand may be caused by issues that are much more complex. We just list a few without being exhaustive in this list. So the amount of stores, the editing of the collection with price points that go all the way from the lowest to the biggest price, overcommunication, which is another key topic. And we all understand that overcommunication is an issue where we keep repeating the same thing over and over again. We would like to be less known tomorrow than we are today.

So we received very important awards. Carolina has been included by WWD in the 50 Women in Power in fashion and retail. And she was invited to a forum in New York to speak about how her creative vision and human vision is inspiring the younger generations. And it's a great honor for us to learn that. 10 days ago in London, I received a very important and special award, as I said, and the Executive Committee of the British Fashion Council has rewarded me with this award.

And actually, let me tell you what, I mean, next year, I think I'm going to travel a lot to accompany the movie all over the globe, but I'm going to learn English. I want to really try and understand whether in my 73rd year, I will be able to learn some English better than I do now. Actually, in the Laudatio that the British Fashion Council gave in the citation, they wrote this recognition goes to Brunello Cucinelli for his exceptional contribution to the world of fashion as a pioneer who has united luxury and design. I love this idea of luxury, united with design with a more responsible way of doing business. And I have to say that this truly honors us.

Now we want to leave some time for questions, but let me give you a general summary of 2025. So revenues are anywhere between plus 11% and 12% at constant exchange rate. At current exchange rates, plus 10%, which is actually a bit better than we expected at the beginning of the year. And it happens all the time when we start any year. EBIT is up. And as Moreno said, when we were talking about EBITDA in the classical way, that would mean that EBITDA in the classic sense would be 21%, which we think is a very good EBITDA. Investments stand at about 10.5%, inventory around 28%, net financial position is about EUR 200 million in this year of major investments. And we would like to keep the same dividends as usual, which is more or less 50% of profit.

So what do we expect for the future for next year? So of course, we start off with a very good atmosphere. So we expect the turnover to grow at around 10%. EBIT should be slightly improving again. Investments should be about 7%. Once again, don't say 6.5% in 2027. It's going to be 7%. We still have some investments from this year. The inventories would be steady at 28%. Net financial position is expected to improve because in the next years, investments are going to be virtually all in the commercial network, but not production facilities anymore and would like to give dividends always at around 50% of profit.

Now Riccardo, we are perfectly on time. So would you please take 5 minutes to give us a recap of our production situation. We feel we are robust. We feel we are well organized on the production front, and we feel we are quite subtle in swift reorders whenever necessary. So everything is in place.

Thank you, Brunello, and good evening, everyone. This is Riccardo speaking. I'm focusing on our industrial system here. We said it several times. It's totally Italian supply chain we have. We have our people, we have our know-how, and we actually have our own way to connect to our people. So together with our factories and tailor shops that Brunello mentioned and they are at the heart of our investment, we have 400 artisan companies that supply us. We actually have a direct relationship with these people. It's never been brokered through platforms. It's based on the quality of products and trust.

And by the way, we have nothing against platforms, mind you, but that's the way we were born. I mean it's in the nature of our behavior to have a direct relationship with our suppliers. Yes. And by the way, we are going to meet them all next week in our traditional end of year appointment. We meet them twice a year. And in October, it's a more operative meeting, and then we meet again for the end of the year. And it's a moment for us to share our vision, which, as Brunello said, is absolute luxury and absolute quality. And we want to highlight the importance of the main pillars in this work, which is high quality, hand weight, artisan skills and workers' conditions, factory workers conditions.

Yes, factory workers first. This is very important for us. So for a supply chain to be strong, we feel it's important that together, we make sure that we have beautiful, tidy, safe workplaces, work hours that are sustainable with a very clear life-work balance. We want to make sure that suitable compensation is always available. And we want to make sure there's fair profit for all the links in the chain. We believe this is an indispensable prerequisite for everything to fall into the right place. Fair profit is not an abstract concept. It's what happens artisan companies to look with peace of mind ahead at their future, and it allows their children to freely choose whether they want to continue their parents work. Yes, actually, if you see your parents are not making any profit, you wouldn't be willing to take on their business.

So this is where the robustness of our supply chain is created. And every time we meet our providers, we keep repeating our business model doesn't change. I mean if you want to produce twice as many garments, you need twice as many hands. And it's really important to invest there. It's a very simple, straightforward principle, but it's essential for us, and we feel it's the highest expression of top quality in ready-to-wear.

Also, we observed that the supply chain has become younger over the last 5 years. The average age of owners is 49 years. The average age of workers is 43 years. And this is really, really important because it means we are looking ahead at least 20 more years of these people working properly, right? Many young people have joined the business, both as owners and as workers. And the generation handover is going on pretty smoothly. This is really important for us because it's a model -- a business model based on fair profit, which makes this worth being inherited.

I'd like to talk about sustainability for a second. Now before I talk about the accolades we received, let me just remind you of the key issues for us, which rely on Human Sustainability. And we define this not just in terms of environmental sustainability, but also in economic and technological terms, cultural terms, spiritual and moral terms. So for us, sustainability begins from taking care of people and the community around us. So we believe that a company cannot be competitive unless the community that supports this is just as competitive.

And the recognitions of the -- we have received from time that is actually rewarding the whole company is there to reward our environmental performance and our sense of responsibility towards the social value of everything we do. One of the projects that contributed is the beautiful work we did with King Charles on regenerative agriculture in the Himalayas. And once again, it's a project of regenerative farming, but most importantly, it's a social project because it gives that social and economic sustainability to local families. It supports the whole local community, and it preserves the ancient know-how on cashmere. Also, they provide us with beautiful cashmere. It's small quantities, but it's absolutely perfect.

And by the way, this year, in 2025, we were able to harvest the first cashmere. And now we are selling the first 2 products in our Casa Cucinelli. And then last 2 items, we updated what we call the social return on investments. So the social value of the investments we make in our communities, and we can confirm that for every euro we invest, EUR 2.1 goes back to the communities, and this makes us proud and confirms that this measurement, although it is intangible, it is pretty concrete.

And we also confirm the positive performance of our emission intensity, meaning the emissions for every euro in revenues, and this is also quite a relevant figure, and it is in line with our targets.

Well, you see since we use the hands, we don't have the much machinery. But nevertheless, we were able to act upon it by collecting rainwater. So this is in line with the targets we set in 2019. And this completes the sustainability picture.

Thank you. Luca?

[Interpreted] Thank you, Riccardo. So now talking about sales. And in terms of sales, we can say that everything is really moving on smoothly. So the 2 main features that makes us stand out are the following: the clothing and absolute luxury for each product. So this means that what we say is not really matching with the market trends because we operate in a very specific segment.

That said, the fourth quarter for us was very lustrous in terms of results and also with a very pleasant ambience in the stores, good vibes. We think this is equally important and significant.

[Interpreted] Yes, there's a good balance, beautiful balance [Brunello adds].

[Interpreted] We know that in the fourth quarter, we will have an exchange rate effect that will be slightly more marked than in the first 9 months. But as Brunello said before, we truly believe in having constant exchange rates. In constant exchange rates, we think that we will beat the estimates and in current exchange rates in line with the 10% growth.

Now let's take a look at the channels, retail channel. We expect an excellent fourth quarter there with a growth that is in line with the one we had in the third quarter this year with a more significant comparison base. We should remind you and recall that last year, in the fourth quarter, we grew by over 15% in retail with 10% in the third quarter.

Well, all the markets are performing well. And by the end of the year, we expect a geography mix of sales that is in line with the one at the end of the 9 months. China, for us, it is an extremely healthy market, and it leads the whole Asian continent with a great double-digit growth. We want to say again what we said a few months ago: We strongly believe, staunchly believe in the fact that China has achieved quite a new balance.

These days in Rome were particularly interesting because we welcomed remarkable guests from China, distinguished guests. And in talking to them, we felt a lot of liveliness, a lot of enthusiasm and excitement. So China, excellent; and America -- as Brunello says, for us, China accounts for 13%. But in the coming years, hopefully, it will grow slightly more than Europe and America.

So that -- so we achieved the perfect balance, 33, 33 and 33 in the 3 continents. America, excellent results there, too. And excluding exchange rates, America confirms the quality of the results achieved in the 9 months, both in large cities in America and Canada. And Europe once again is very robust, thanks to the important contribution of local customers and also important contribution from tourism.

Now wholesale. Wholesale, there, we expect the fourth quarter slightly -- that it could be slightly positive just for the time -- as a result of the timing of shipping because you see the wholesale is valued in the 6-month result because that really captures the quality of the season. Well, we expect the second half to be extremely positive and an excellent end of the year.

And we recall that the growth in the wholesale channel is fully comparable because the accounts are always the same, it's like-for-like. So Brunello was saying before that in the sales campaign for the winter precollection, this is a time of important meetings with important clients, and we perceived a desire for interaction and dialogue that is really typical in moments of opportunity.

What did they say to us? They expect 2026 to be with a high concentration of clothing, ready-to-wear. They believe that in 2026, clothing will be one of the most important category.

[Interpreted] And we are very happy with that, [Brunello points out].

[Interpreted] And also the importance of new products on novelties. It is customers tend to ask for novelty, exclusive new items. Then in the top part of the brand portfolio, there's -- the old customers are seeking out unique and exclusive garments. And the last most interesting point, we were told about a constant -- the desire for receiving tips and styling tips and it is very interesting for us because we see -- and they see a great opportunity there.

And of course, the multi-brand channel has a lot of abilities in this field. For this reason, we believe that in the new year, our offering will be very much appreciated. But at the same time, we will be up to step with the market in terms of product, style and customer experience.

And our store network is extremely fresh, youthful and looked after in terms of both locations and visual merchandising because it does truly represent our lifestyle. And the most important thing, we have great staff that is able to forge long-lasting deep relations with customers because they are [indiscernible], they are very competent. And also this -- what is important is we organize this family like events with just 120 guests.

Yes, when talking about events, we are very proud to say that in 2025, too, there are new people -- we hired new people in the stores. And through their professional qualities, they truly represent -- they're truly ambassador of our fashion house in the world, and they represent another kind of wealth assets in our stores. And perhaps the best feeling for the new year is that of having a lot of trust and empathy because many customers pointed this out.

And this health -- this trust, sorry, was not at all tarnished by the Morpheus affair. And because what testifies to this is the quality of sales what happened after the report was published in the following months. And in managing this affair, what was important was the timeliness of and the way responded and the reputation was left untarnished. And we can say that the trust and the credibility of our brand has probably increased after this affair.

Let me conclude by giving you a few information on the network. In the fourth quarter, we had 3 important extensions: London, Paris and L.A.; and the openings of Macau and Shanghai. So these last events in 2025 represent the first important investments for the coming year so that we can even better qualify our network and still very exclusive in terms of numbers.

For 2026, we plan some important expansions and extensions in Geneva that we postponed from this year, then Toronto, Shanghai, Mexico City, Abu Dhabi and Juan. And then we have the conversion into concession of the first 5 locations at Neiman Marcus. So we know we have had a concession for quite a while with interesting results with Neiman and Saks and now we are open -- sorry, with Saks, and now we are opening with Neiman Marcus.

And -- so this way, we can say that Saks Global is a very important platform for the American market in 2025, too, many of the Saks Global locations translated into the best results for us. And this shows how crucial this client is. And in 2026, we aim at opening the Casa Cucinelli in Shanghai, and we are definitely looking forwards to that.

Thank you. So we already mentioned the Harrods event. Then in mid-January, as I was saying, we have the Callimachus platform, the AI new e-commerce website. We believe that this is extremely high quality, also fine to see with a hand drawing, so we like it very much.

Then the movie. Many of you were in Rome the other night with us. And we like many things about it. First thing first, the name of the company on the titles. So a couple of years traveling the world to present it and the cost of the movie have been absorbed in the past 3 years. So we will have to travel and go. But if actually you go to Tokyo, for example, and you are there for the preview, but you can do some other events. But we believe that this movie really shows our product, the style, but also the great concept of territory, production, community. As you know, Solomeo was very special to us.

So to conclude and then we open the floor for questions. It is the 48th financial statement for our company, which means that I'm not that young anymore. It is the 14th financial statement -- sorry, the 14th since our stock market listing, of which, as you know, we are very, very satisfied, although this -- despite the Morpheus event. So we believe in high-quality made in Italy.

As you know, the company is firmly rooted in the Italian territory, and it will still be there forever. There is no chance that any relocation will happen. We will stay in Italy. We are Italian. As you know, the family is at the helm of the company, and they want to stay there for the coming decades.

So at the end of the day, it has been a record-breaking year for our fashion house. We have harvested a lot, maybe even more than what we expected, but not just in terms of revenues, but also in terms of recognition and accolades, we would have never expected something like that. And there is no doubt that with all these awards, there will -- the brand will definitely benefit not just the products, but also the way we work and live.

So the movie was released yesterday in Italian cinemas, and it seems that it is ranking first in all the Italian cinemas. So the movie represents our company, represents Solomeo, my family. And we want to consider it some sort of hallmark, a hallmark to the memory and to the art. So we have the churches, we have the winery and this is the monument too. Those who will come after us will remember us because of that, too.

So we work with a very creative atmosphere. So the collection is ready, also the men's collection for Pitti. Of course, we wish you a great festive period. And also, we wish that you have time for reflections, too, because as I was saying in the past few days, I gave so many interviews, but the feeling is that we do need to rediscover ourselves and Christmas and the festive season is always one of those days.

Let's open up for -- now for Q&A. Then with some of you, we'll meet you all in Milan, so we have the usual dinners. So thank you very much. And we are very joyful, serene. And about the movie, so I decided to watch it. I decided to watch it just at the very last minute because I didn't want to change anything. Let's open for discussion.

[Interpreted] [Operator Instructions] First question will be asked by Andrea Randone of Intermonte.

[Interpreted] I have a few questions. Here they come. So I have a question on marketing first. For 2025, would you please remind us of the impact of marketing? Do you expect that percentage to remain constant? Because you did mention some initiatives for 2026, but it's always interesting to understand what we can expect. It's maybe not going to be as innovative as this year with the film, but we are really interested in trying to understand what you have in mind for next year, too.

[Interpreted] Is this your only question? Sorry, I can't hear you anymore, Mr. Randone.

So we'll take your question in the meanwhile. So we normally spend 6.2, 6.4, 6.3. In the last 3 years, we did 6.8 and 6.9, and it's going to be 6.9 again this year. And starting next year, we're going to go back to 6.4, 6.5 because, of course, the cost of the movie was quite sensible.

Then you said you have more questions?

[Interpreted] This is the operator. The line of Mr. Randone has become disconnected.

Next question will be asked from the English conference, and Chris Huang of UBS will ask it, please.

Firstly, congratulations on the film and also the very encouraging constant FX guidance you just provided. So I have 2, please. The first one, specifically on Q4. So you mentioned in the press release that you expect Q4 the retail channel to be in line with Q3 at constant exchange rates. Could you just maybe confirm what was the number you saw in Q3 because you don't disclose normally constant FX growth by channel. But if we do a rough calculation, it seems to be [indiscernible] So is that the expectation you have for Q4 retail FX neutral?

And connected to this, what are the regions and nationalities you are seeing that is driving this underlying acceleration given the tougher comp base?

Secondly, on marketing, just a follow-up to the commentary you just provided. So if I caught it correctly, you said marketing around 7% in 2025 and that budget will slightly normalize into 2026. So should we expect your EBIT margin in 2026 to see a more meaningful expansion compared to the slight improvement you are expecting in 2025?

[Interpreted] Thank you, Chris. Luca will answer this question on margin.

[Interpreted] Yes, Chris. As to retail growth in Q4, that was 14.4% at current exchange rates, which is 15% at constant exchange rates. So that's the benchmark for Q3.

As to the nationalities and geographies. As you know, we have a main proxy that actually nationalities seem to mirror the geographical countries of origin from different customers. So we confirm that by the end of the year, we expect the geographical mix will be very similar to the first 9 months. So there's beautiful continuity in all regions.

Well, Chris, as to the 6.9% marketing budget, if we do 6.4%, 6.5% next year, that's something we had expected ever since the beginning because we had budgeted the cost of the film to be split over 3 years. But as far as margins are concerned, we always try and do a bit better than the year before, but it's not a mathematical formula. I mean you don't necessarily take money from marketing and put it on margins, it's not automatic.

Because we always think that profit should be very, very healthy. I've seen it in this time as well, young people are very careful. And when I say young people, I mean people in the mid-20s that are highly educated and that have a very clear understanding of what they consider fair profit and fair compensation of workers. So being fair, being just is very, very important for people in the 20s and 30s. Thank you, Chris.

[Interpreted] The next question will be asked by Charles-Louis Scotti of Kepler Cheuvreux.

Yes. I have 2, please. The first one, could you remind us the breakdown of the 11%, 12% constant FX growth in '25 between volumes, prices and mix and also the key building blocks behind your 10% constant FX guidance for next year, and more specifically, the expected pricing contribution?

And second question regarding your e-commerce. Could you remind us the size of your e-com business and the split between DTC and wholesale? And do you have any long-term ambitions for e-commerce revenues or should we view it primarily as, I don't know, a tool to support your omnichannel clients and a discovery channel to recruit new customers?

[Interpreted] Okay. I'll take the second question first, if you don't mind. Now for the e-commerce launch, we don't have any special ambition in mind. I mean direct e-commerce is about 7% today. Globally, it's 12.5% to 13%, including multi-brands. But we don't expect big things from it right now. But what we do expect is product showcasing.

I mean people go to the stores with the pictures of what they've seen online already. So presenting products on an e-commerce website properly is extremely important, with this new system, which will help you and advise you on what to wear. So it's going to be a major image-building tool. But as far as actual sales are concerned, we don't expect much from it.

We still feel physical stores are fundamentally important, especially for men's. They need a lot of advice. And also if you want to create something special in outfit, which is just perfect for you, you need physical content and advice.

As to growth, today, volumes accounted for 3.5% to 4%. And for next year, we expect the same. We know that prices next year may be 3% to 4%, depending on the pricing of raw materials. Unfortunately, after 6 years of employment contract was renewed in Italy after 6 years of standstill. So it's pretty stable, so to say. But we do expect a good atmosphere in stores because I do think that that's something you feel.

I mean there's a good rebalancing going on. And if we altogether were brave enough to mix up the results of '21, '22, '23, '24 and '25 of luxury companies and see them all together as a 5-year plan, we would be satisfied with revenues, margins and everything because we went through 3 years of relevant growth and 2 years of rebalancing.

[Interpreted] The next question from Maria Meita of Bernstein.

I just have one and for clarification, regarding your guidance for 2026, is a 10% growth at current or constant exchange rates?

[Interpreted] Well, it's always the same target. I mean we start at the beginning of the year with a 10% target, and we've been doing this for 14 years. The impact of exchange rates has always been very, very limited. This year, it was a bit higher. Maybe next year, it's going to be similar. It swings a bit, but we'll see as we go during the year. But our order of magnitude at the beginning of the year is always the same. We want to grow it around 10% to still be extremely exclusive.

[Interpreted] [Operator Instructions] Next question will be asked by Oriana Cardani of Intesa Sanpaolo.

[Interpreted] I actually have 3 questions. First will be about the performance in Q4 of the retail channel. So what is the impact of like-for-like growth versus the [indiscernible] new openings? What's the impact of this on the double-digit growth you expect for Q4?

And the second question is about new openings, extensions, new concessions starting in 2026. What estimated impact of those on the growth you expect next year for retail?

And third question is about the beautiful docu film you just presented and -- in Rome on December 4. So what kind of distribution do you envisage for the film outside Italy? Is it going to be circulated to America and Asia? Is it going to be accompanied by special events?

[Interpreted] So as far as the contribution of new openings and the retail growth, this year was very beautifully balanced between growth on the comparable basis and the new openings or expansion. Then as to the value of concession in 2026, you, Oriana, should consider that when they are performed during the year, the gap between wholesale and retail is offset each other because on the one hand, the wholesale is for the whole -- it's true that the retail value is higher than the wholesale, but over time, distribution basically translates in a 0 effect in the first year. There will be a shift from wholesale to retail.

Then as for the movie, Oriana, we will have loads of events, Japan, America, across the board. Well, a last for me, but there's also Carolina, Riccardo, they will be going there, too. But we are very pleased that the feedback was particularly pleasing because that's the name of the brands and the titles. So the London prize for the style because you see the awards we received in London was not for the product, but for the whole lifestyle, putting together luxury and design. So that's a very strong message.

Then the movie. So this seems to augur well. But I've always thought that when you stop wanting to travel, then you have to stop. So now that young CEOs will be traveling more than me. You see, I went to the premier in Rome the other night, and I came back at 3 in the morning. So I was wondering, God, I wonder if I'd be awake for the call.

But the idea, Oriana, is that the movie was directed by a man with a soul. Thank God, you see, it bears the name of the brand, and they say that it can be very successful abroad, too. So I would -- as I keep saying, Oriana, tomorrow, we should be known better -- sorry, less than today. So we only have 500,000 customers at the end of the day. Thank you, Oriana.

[Interpreted] [Operator Instructions] So there are no further questions.

[Interpreted] Very well. So thank you. Thank you very much, and best wishes for the festive seasons. We will meet many of you in Milan tomorrow. And hopefully, you will spend some nice holidays, but be confident because high-quality products will always have -- always be special. What really matters is to find the skilled hands. Thank you, and have a great festive season.

[Interpreted] The conference call has ended. You can now disconnect your phones. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[Interpreted] Good evening, and welcome to the presentation of preliminary revenues for the 9 months in 2025 of the fashion house, Brunello Cucinelli. Speakers will be Brunello Cucinelli, Executive Chairman and Creative Director; Luca Lisandroni, CEO; Riccardo Stefanelli, CEO; Dario Pipitone, CFO; Moreno Ciarapica, CO-CFO Senior; and Pietro Arnaboldi, Investor Relations & Corporate Planning Director. [Operator Instructions]. Now I would like to give the floor to Brunello Cucinelli.

[Interpreted] Good evening. It is a pleasure to have you all here, analysts, investors and journalists. This is the call to report on the preliminary results of the first 9 months of the year, which we decided to bring forward by a few days in order to have the opportunity to discuss with you the company in detail and also to discuss together on the problem that we have defined, short selling activity. So we're all here, all 10 of us. How we would like the call to proceed. So I will read the main figures that we consider excellent. We will give you our final 2025 revenue and profit forecasts, which we are very satisfied with.

And there is absolutely no change from the last August call, and you already know these figures because they are unchanged. Then we will dwell on 2026 forecasts after the closing of the Spring-Summer '26 men's and women's sales campaign and the performance of sales this autumn. And we have the feeling that everything is going very well, both in terms of numbers and product image. Then Luca will give you a brief overview of the markets. And this too has not changed since late August. Then we will provide you with a summary of the fundamentals of our fashion house, a very essential and concise summary as well as our business model.

And then we will move on to the explanation and the discussion of the short selling activity, which consists of inventory, #1; multi-brand, #2; exclusivity #3; and Russia. The discussion is open. Do not worry about time. If more is needed, we are fully available. Now let me read out the press release. Excellent results totaling 1 -- sorry, okay, let me read it out in full. Excellent revenue totaling EUR 1,019.6 million, up plus 10.8% at current exchange rates, 11.3% at constant exchange rates compared to the first 9 months of 2024.

Very, very positive growth in the Americas, up 9.2%, 10.8% at constant exchange rates, extremely solid in Europe with an increase of 8.9%, 8.6% at constant exchange rates and very strong results in Asia, up 15.5% (sic) [ 15.6% ] and the same at constant exchange rates. Excellent performance for the retail channel, up by 11.4% and very, very good for the wholesale channel, up by 9.7%. In Q3, sales reached EUR 333 million, up 12% at current exchange rates and 12.4% at constant exchange rates with an excellent increase of 13.8% in retail and still very, very good in wholesale at plus 9%.

The results achieved in the first 9 months, together with the excellent start of Autumn-Winter 2025 collection sales in stores give us today an even clearer visibility and stronger confidence in achieving the targets set for 2025 with expected revenue growth around 10%, always accompanied by healthy and balanced profits. So the Spring-Summer 2026 sales campaign ended, and it ended in a very positive -- on a very positive note for both men's and women's collections, very, very positive comments and feedback received from international press during last week's Milan Fashion Week.

With renewed confidence, we therefore confirm expected revenue growth of around 10% also for 2026. We confirm the presence of a just and balanced inventory. This is the way we defined it, just and balance for our company identity, perfectly consistent with the fundamentals of our collection offering and aligned with historical data of our ready-to-wear fashion house since its listing in 2012 and to operate in the Russian market according to EU rules. The weight of this market is -- amounts to 1.4% as of 30 September 2025 compared to 2.7% on September 30, 2024, 2.4% as of 31 December 2024.

So this is how I commented. We closed the first 9 months of the year with excellent revenue results, up 10.8% at current exchange rates and 11.3% at constant exchange rates. And given the quality of sales, we believe this also applies to profits. We feel that the brand image clearly reflects how we aim to live and work. The Women's Fashion Week in Milan has ended. Our collection received extremely positive reviews for style, craftsmanship, quality and exclusivity. And we are clearly very satisfied with this.

In my life, I grew up with three great masters, the refined Jil Sander, the German designer, the genius like Ralph Lauren and the visionary Giorgio Armani, and I nourished myself with their refinement, their genius and immense poetic vision. So last week was a week honoring the figure and work of the great Giorgio Armani. For all who love beauty, simplicity and the statement and work, he is a star. This star of the great Master Giorgio has extinguished on earth after shining for long among the most brilliant artists of our times. And from now on, it will shine gloriously among important mortal spirits as the absolute symbol of Italian fashion to him the honor of the great.

Thank you, Master Giorgio. Of course, if in this week, events we have defined as short selling activity had not occurred, well, the activity regarding our fashion house, it would have been preferable and a little less demanding for me, the two CEOs and for Pietro. But what happened is part of being listed on the stock exchange and its rules. On this matter, I received countless messages of appreciation. For the rest, everything remained particularly special at the company.

We had -- perhaps we have had the most beautiful fashion week in our history in terms of number of journalists, celebrity, talents and client presence from boutiques around the world to whom we dedicated an exclusive evening like we usually do. So we, therefore, expect a year-end with healthy revenue growth of around 10% and consequently, proper profits. And given the results of the Spring-Summer 2026 sales campaign and the way it performed, which we consider excellent and given the Winter collection sellout, which is going very, very well, we envisage 2026 revenue growth of around 10%.

Now I keep clearing my throat because of this sudden increasing of temperatures. So how we see year-end? You already know everything from the 28 of August call, no significant material changes. So revenue growth around 10%. EBIT margin slightly improved compared to 2024. Very significant investments in artisanal production and the doubling of the Solomeo headquarters almost completed and already operational planned in the '24, '25, '26, 3-year period, but brought forward by about 6 months. So we will end everything this year. So this year, we have invested around 10.5% of revenue, but this gives us security, hopefully, for the next 10 years.

Please note, and I will say it once again, our investment plans for '26 and 2027 should be normal, considered normal of around 7% because this is our standard. Clearly, when expanding factories, well, these are always long-term projects. In this case, it amounts to 10 years. Now 2026 forecast. So excellent order collection for the Spring-Summer men's and women's lines. I would also say excellent in terms of taste, style, visual merchandising and lifestyle. And you know how important this is because 75% is ready-to-wear and 25% is lifestyle.

You know how important this topic is because the feedback of multi-brand stores on the collections guides our own orders for our retail boutiques in that specific market. And it also highlights the collections value. When they turn up at your doorstep, they look at the collection, they say, is it beautiful, modern or slightly repetitive, or outdated, this means that if you go back home and you integrate new styles to place in your stores for the upcoming season accordingly, then it is always a good thing. Very, very positive sellout in our boutiques and multi-brand stores even in the last week after the report, and we will discuss in detail later.

As you know, we have around 450,000, 500,000 end customers. Now inventory, its incidence -- let me sip some water. So inventory around 28%, 29% of yearly sales. This has always been a healthy level because we make clothing, and we find it fresh and contemporary. Otherwise, it would mean that stores have outdated goods and sales would not perform as they are because we call it inventory, but actually, it amounts to the goods that are displayed in the stores. That's in line with the June 30 values. So we feel sound and contemporary in style and lifestyle. So dividends typically around 50% of profits.

Sellout for this Spring -- for this Fall-Winter, we were very, very positive. So it's now the end of September. So we understand that and how it works. So please remember this is an important thing. Should I tell you about last week's Fashion Week in Milan, as we looked at the collections and as we talked to customers who came for orders at our showroom, the air was slightly positive, so it was certainly on the plus side. So that means that taste for the product in our boutiques is very contemporary.

We have noticed that customers stay in boutiques around 30 minutes as against the 15 minutes in the past, which shows that the way we welcome people, hospitality wise, cappuccino and kindness of sales staff are very important. So spending 30 minutes at the store is really, really interesting for us. Now there are three major events planned for this year. And the highlights are the Fashion Oscar, which will be awarded to me on December 1 in London by the British Fashion Council together with the world premiere of the documentary film about my life on December 4 in Cinecittà, directed by Maestro Giuseppe Tornatore and -- with the music by my friend, Nicola Piovani, both Oscar prize winners.

I think this will actually be a major image building event. And so Giuseppe Tornatore won an Oscar for Nuovo Cinema Paradiso whereas Nicola Piovani won the Oscar for the music of Life Is Beautiful with Benigni. So all these events will give us great visibility, and it will boost our healthy revenue growth around 10% with solid profit. Now let me talk about the company setup. And just one minute to explain the company organization because sometimes I hear people asking, well, after Brunello, what happens after Brunello. Now with my family, we hold 50.1% of the shares. And it's subdivided as follows: myself, I'm 72 years old.

I'm the Executive Chairman and Creative Director, 80% of my time is dedicated to product design, remaining 20% sees me traveling around the world for events and clients and so on. Riccardo, who is the husband of my daughter, is the CEO together with Luca, and he's a father of two grandsons and granddaughters. Luca, the co-CEO. Luca is the only nonfamily member, but we consider him like family. Camilla and Carolina are both Vice Presidents and responsible for product and image. Carolina was recently awarded with a very important prize in New York and so we are very proud of this. Alessio, her husband and the father of a grandson is another important component of the men's team.

Federica, my wife is 71 years old. We've been together for 55 years now. So we're responsible together with Camilla and Carolina for all the events that happen in the village. For us, our Borgo, our little town Solomeo is very, very important. Finally, the trust. Camilla and Carolina are the beneficiaries of the irreversible English inspired trust with three company advisers. And I established this trust when I was 59 years old. So I started thinking about my heritage when I was that young. This trust allows me to operate freely while alive. But the day after my death, Camilla, Carolina and the three advisers or people working with us will make their own decisions.

So this is going to continue for 20 years after I die. So don't be alarmed, as soon as I die, the morning after my passing, everything will be organized, and the company will keep on working in a fully organized way. Let's now see some key figures of our fashion house, revenue, 50% men, 50% women, 40% multi-brand, 60% monobrand, 3,300 employees, half in Solomeo, half in stores worldwide, 400 artists and companies representing our production soul. We are a ready-to-wear company, 85% is ready-to-wear and 15% accessories, and this was the same when we went public in 2012.

So this is what we are today, made in Italy in the absolute luxury segment where we see quality, craftsmanship, creativity, minor skills and extremely important exclusivity. And exclusivity is a fundamental thing for us, and we'll discuss it further. Our business model and the big fundamentals that we believe in are always unchanged. Our business model has not changed over time. We'll keep the company alive in Solomeo for the next 200 years. We want healthy annual revenue growth, healthy profits. We want better workplaces, better salaries where human beings feel like they're thinking soul.

In particular, we do support manual labor. So who's going to be a factory worker in the future? What parents will encourage their children to become factory workers? I think in the future, the challenge will not really be whom we sell to, but who will produce such special items made in Italy. Now Riccardo, for the next 2 minutes, can you please update us about the connection with the 400 providers and suppliers that are our soul.

[Interpreted] Well, thank you, Brunello. Good evening, everyone. We consider those 400 little companies that Brunello mentioned as the real jewels of made in Italy. And so we wanted you to understand this because we have a direct personal relationship with them. We've never relied on platforms. We always build a day in, day out connection and dialogue with these companies based on company -- on product quality, but also on the quality of our work and human relationships. And frankly, it's really nice to see that each and every one of them really subscribes to the same principles.

And over the last few days, we've been reminding ourselves about this all the time. Our -- the Constitution of Italy at Article 36 says explicitly that all workers are entitled to receive a salary proportional to the quantity and quality of their work, which, in any case, should be sufficient to grant them a free and dignified existence for themselves and their families. Now this is the founding principle of our country, and it's even more important for a supply chain like the one we have in Italy that's been built over time. So this is true for us as a company and for us as a brand.

We want to protect these companies and their profit-making skills and abilities and the possibility to plan their future, which is so important for little companies. Actually, next Friday, we're going to meet with all of them here in Solomeo. We talked about the excellent Spring-Summer campaign and -- which means it's their work from October to May. So it's going to be very important for them to plan carefully. So we do believe that the Italian supply chain is top quality today and for the future. And maybe 70% of French brands do actually manufacture in Italy themselves. So I leave you with a recommendation that's very important for them and us.

Let's support this supply chain. Let's make sure that our artisans can work in beautiful places, that they make the correct profit, they receive a suitable salary and especially for younger people, they may consider Italian manufacturing, not just as a hope, but as a real life opportunity. Well finally, e-commerce is so important for us. Towards the mid of November -- by November, we will publish our first e-commerce AI-powered website. And I think it's going to be special because it will be able to welcome all visitors in a very personalized way and show people the collection, which is more relevant for them. It's a bit like kind of a make-to-measure experience.

[Interpreted] Okay. Thank you. Let's now move on to a discussion on what we called a short selling activity. We feel that the thesis suggested -- shows a big -- major critical issue with our inventory, which has been called bloated, leading to discounted multi-brand sales and consequently, loss of exclusivity and hence the necessity of doing this also in Russia, where in the first 9 months, revenue is currently 1.4%.

So how do we define this? Bloated inventory, multi-brand, not respecting rules with discounts, loss of exclusivity and need to sell to Russia to reduce inventory and generate revenue. So let's look at topic 1, the inventory. In our 47-year history of the company, inventory has always been 28% to 30% of revenues. Since our 2012 IPO, this has always been the case. Today, it is between 28% and 29%. So we've never believed in evergreen products because we believe they don't lend contemporaneity to the brand, except for some iconic items, mainly accessories, but not ready-to-wear. So this is what we've always thought, and we sell 85% ready-to-wear.

So there's no code, which is fashion this year and evergreen next year. So bloated inventory means carrying goods that are not truly contemporary in the stores, which would mean that both products and stores would be less charming, less fascinating and so hard to sell. Today, we feel balanced and sales in stores are very, very good, and we are happy with the image. It appears to be very contemporary, both in store windows and inside stores. At the time in 2012, 27% was retail and 73% multi-brand. Today, we sell about 60% through retail and 40% through multi-brands, but the inventory ratio remains the same.

The annual production is just under 2 million units, all made in Italy, very limited and expensive. Our estimated customers are anywhere between 450,000 and 500,000 people, which means they roughly buy four pieces per person per year. Of the 2 million pieces in introduction, 40% goes to multi-brand stores that have no return rights, i.e., about 800,000 pieces. The remaining 60%, which is 1.2 million pieces, go to our direct stores. So you can easily understand that our unsold inventory is in limited numbers. And also, we have a beautiful project, which is Brunello Cucinelli for Humanity, which was first created in 2020 during pandemic to support the least lucky part of mankind.

And besides that, we have sales to our employees and friends and family sales. So the amount of inventory pieces is actually well balanced for our business. Of course, a problem may arise when sales stagnate, which would be a very different situation. Inventory quality reflects the management quality and the contemporaneity of the brand. Of course, our highly artisanal production is concentrated in our micro companies, 70% of them in Umbria, the rest in the rest of Italy. And this gives us flexibility, security and speed.

So this production model with our 8,400 artisans provides us with a very good level of security. Now another important topic is multi-brand. We were born with multi-brand stores. That's been our story forever. Today, we have around 400 stores, multi-brand stores worldwide, beautiful, very beautiful, very prestigious multi-brands. They've built our image from the beginning. And if we are what we are today, it is largely thanks to them. We believe over the decades; their behavior has been extremely reliable and inspiring. When we encounter issues in their behavior, we point it out and if necessary, stop collaboration.

But this has been very, very rare throughout our history, maybe due to their economic difficulties. Let me just make a little example considering Hermès and CHANEL. I mentioned these two brands because I think they are two great brands that have always inspired me, undoubtedly amongst the most beloved brands in the world. I was carefully following when I was younger, even though it was really hard to find them, the interviews of Mr. Jean-Louis Dumas and they were fascinating when he said, I want to feel responsible for everything that leaves our maison, it was beautiful.

Mr. Karl Lagerfeld inspired me to do what I do today, a creative director, which is something that perhaps you do, you can do even at an advanced age where you lose creativity, but not your taste and still be the beacon, the guiding light for your brand and coworkers. These wonderful brands have grown for more than a century, being present in the world's most prestigious multi-brand stores. So we would never be able to think that these beautiful multi-brands would not respect the brands they collaborate with. And this, we can say based on our direct experience.

And so important multi-brand stores and year of foundation, Saks 1867, Goodman 1899, Neiman Marcus 1907; HIRSHLEIFERS 1910, Mitchells 1958. In Germany, Unger, 1878; BRAUN, 1933; Daimaru in Japan, 1717; Isetan, 1886; Takashimaya, 1831, [indiscernible] 1929. In Hong Kong, Lane Crawford, 1850. In Italy, Nugnes, 1920; [indiscernible] in 1946. Why have I listed all these? Because they are wonderful multi-brands. The history of multi-brand stores is ancient as ancient as the world. And until about 20 years ago, almost everything happened and was sold through multi-brand -- the multi-brand channel. This is what we have experienced with our company. Even today, important exclusive watch brands are sold through multi-brand stores.

I always cite my favorite Vacheron Constantin. Well, at the end of the season, of course, they might discount some items, for example, mismatched sizes, seasonal pieces, but they are very, very careful because their image is at stake. Over the decades traveling the world, I have never seen anything harmful to the brands. Perhaps today, with technology, something more could happen, but it is really not relevant. Multi-brand stores are the true guardians of the brands. They provide you honest feedback of your collection and the contemporaneity of your brand. And this is crucial to understand how your brand is really whether it is healthy or not.

And we -- as we heard in Milan, if the feedback is not very positive, then you go back home and you make some tweaks and changes. They have viewed 300 different collections. So therefore, their judgment is not the same as valuable as the store directors who have not seen other brands collections. They are true critics. But if you have the courage to listen, their criticism is always very constructive. When our team travels worldwide for research, we almost always visit multi-brand stores seeking inspiration and exclusivity. So we restate once again our belief in multi-brand. Another very important topic, 1 minute on exclusivity. Well, this is a major topic.

I once read which brands will be truly exclusive in 5 years' time. We have discussed this extensively with our team as we do it on an actual daily basis. It's something we work on. Exclusivity is synonymous with limited quantity, hard to find very well-made items with a very high -- highly recognized image, possibly heirlooms and expensive. In Italian, exclusivity is being replaced with desirability, but these are two very strikingly different concepts. Exclusivity means, it is hard to preserve over time as the company grows. Desirability, it's something that is easy to find but highly desired.

For example, my friend, Eddy Cue today, he gifted me with a new iPhone. I showed it to my granddaughter, and she was really thrilled. And I said, yes, I agree, but this is not exclusive. So for our company, we have always opted for exclusivity combined with healthy annual growth, proper profits, ethical production, better workplaces and adequate salaries. Balanced numbers of new stores openings each year appropriate to our brand. Then fourth topic, very important, Russia, necessity of sales at all costs in Russia. Luca will explain this in detail.

[Interpreted] Thank you, Brunello. In just a few minutes, with just a handful of numbers, we would like to give you a very clear scope of our activity in Russia. Let's start from the beginning. The start of 2022, when the conflict broke out, we decided to tackle the situation the same way we did with the pandemic, meaning protecting our people and our partners. In the Ukraine, we never had -- we always had a wholesale activity, never retail, always with multi-brand stores and a monobrand franchising. So our focus and attention has always been focused on offering the utmost support to these partners. And since the beginning, we have always appreciated the courage and determination to continue their operations also in the darkest days.

In Russia, we always had a twofold activity, retail on the one hand and wholesale on the other. Let's start on the retail. Precisely -- well, just before the war, we had just renewed our network with three new flagship stores in terms of size, and they were to represent the image of our brand on the Russian market. In March 2022, we decided to close these points of sale, and they have been remained so until now. This network in Russia also includes two spaces in multi-brand stores, and they stayed open. What kind of product have these two small stores sold smaller than the three flagship stores that are closed.

The product that we had shipped before the introduction of the -- before the start of the conflict and the product with worth less than the threshold set by the sanctions. We would like to recall that sanctions never introduced an obligation to close down the store or to stop shipment, but they just identified a value of EUR 300 as a statistical value, meaning the value beyond which articles, items could no longer be shipped to the market in question. And statistical value means a value of transfer. And for the sake of clarity, you should remember that to move from the transfer value to the retail value of the very same item, we have to multiply 3x, sometimes even higher.

So the revenues generated in these two spaces together with the one in our showrooms in these one-to-one appointments between our salespeople and our loyal customers, this generated the results of our Russian subsidiary. And from year after year, we have always shown these figures in the accounts of our Russian partner -- subsidiary. This for retail. Now wholesale. The wholesale activity is limited to the shipment to multi-brand -- Russian multi-brand stores of items that are lower in terms of value of this EUR 300. We have never even envisaged or imagined to make special products just to be included within the range, the allowed range.

And we have always checked that everything was proper and correct. The retail revenues, if we compare this with the shipment -- multiply this, sorry, by the shipment in Italy, we arrived to EUR 14.8 million generated in the Russian market until September 30, matching the 1.4% of our revenues. No -- so just to give you any other figures in the first 6 months of 2024, it was 1.7%. And if we take a look at the whole 2024, it was 2.4%. We believe that these numbers already properly describe this revenues growth that was consistent between 2022 and today.

We used this decrease -- to give you an image of that, our Russian business is like a candle that it is melting hand-in-hand with the use of the inventory we had in Russia and the reduction in the number of employees. We had over 70 employees before the war and today, 44 due to the voluntary departure of many other people who decided to move elsewhere. So once the revenues have been cleared, let's take a look at shipments. And so the volume of trades. We basically used weight, although this is not a measure that we -- a parameter that we use. But we can say that since 2021 and 2024, our shipment to Russia dropped by 52%.

So in a very consistent way with the revenues performance that we just described. Now just one last remark. When we take a look at the growth that our company enjoyed in the past few years, undoubtedly, at world global level, retail was at the forefront. The multi-brand channel grew consistently definitely, but in a lesser proportional way than the retail. And we believe that this number can also reassure you of the fact that we did not force at all the multi-brand market. So I would now like to stop here. So to wrap up, first thing first, well, we can say that we could have done without the short selling activity after such a great week in Milan.

But today, this -- I should have started my English lesson a week ago. Thank God, this is postponed. Now what do we want to say? The company is working normally. Tomorrow, we will have an employee general meeting to explain everything to our employees, although they're already very well informed. And we can say that we have four very important events expecting us in Korea, in Japan, in London, an event at Harrods and then the award, this prize that I'll be honored with. And then on December 4, we have the pre-screening of the movie. So we are pretty confident especially because the collection has received great feedback. So we now live in the certainty that in the coming months, there will be beautiful product displayed on the shelves. And now we open for discussion.

[Interpreted] [Operator Instructions] The first question from Andrea Randone, Intermonte.

I have two questions, one on the business and the other one on Russia business. So very good numbers there. It was perhaps a further comment on revenues in Asia that were particularly buoyant. Perhaps you can give us some colors on this and specifically Japan and if something has to be reported -- pointed out on retail or wholesale, if everything is -- or not? Second question, very interesting details you provided on Russia. And as an outsider, I wonder what are these customs checks. Did something specific happen in the past few days? Or are you just talking about the regular frequent checks? Yes, let's start from here.

[Interpreted] Andrea, Luca speaking. So nothing special over the past few days. So these -- we have had over 100 custom checks since 2022 always. What kind of checks are these? Well, the documentation first, the documents, the accompanying documents. Secondly, sometimes to what extent the price matches, the pricing other -- of shipments to other countries, and there was nothing to report on this, never. As to your comment on results, we had 9 months that were particularly positive, and there is -- there are linear results. And for this reason, all the comments that we shared in August still hold true. So today, we basically defined the Americas results very good.

And there was no impact on the willing to shop on the purchases. Brunello traveled to Europe very often, and he was met with beautiful multi-brand stores. And yes, multi-brands are working hard in order to identify special goods and excellent results in Asia and China that we called a strong, modern and balanced market. Andrea, you see in China, our revenues amount to 13%, so -- but we came back from Milan and after speaking to all the different Asian markets, we came back with confidence, but definitely not on the last day because that's when we learned the news. And then to conclude, Japan, last year was a special year for Japan. But this year, too, it keeps being a great contributor. Yes, it was very special last year. Thank you, Andrea.

[Interpreted] The next question will be asked by Chris Huang of UBS.

I have three, if I can. The first one is on the trends you are seeing in the business. If we look at your retail performance in Q3, it seems like it saw quite a big acceleration versus Q2. So I'm just wondering what are the trends you're seeing within the quarter. I know this is not something you usually comment, but given that you're the first in the sector to report, would it be able to give us a little bit more flavor in terms of maybe September is growing faster than the quarterly average? Anything like that, that would be very helpful. Secondly, on a more kind of a P&L structure, can you just maybe remind us of the way you report? Because I think recently in the market, there's a lot of debate around cost of goods sold.

And if I remember correctly, you report production costs. So can you just remember -- remind us of what is the difference between the production cost report and then the typical cost of goods that we see for a company? And last but not least, on wholesale. I think currently, the wholesale channel is around one-third of your sales on a global level. Do you expect maybe perhaps in the future that this channel continues to decline in terms of its reliance? And do you have in mind a relative kind of ideal channel exposure you have for the midterm?

[Interpreted] Very interesting, Chris. So let me take your question about the multi-brand trend. So the beginning of the Winter season was very, very good. But please remember, Chris, that if you do -- well, if you look at retail, it doesn't really look like a great moment in time. I mean, people keep asking us how we're doing all the time. And what I'm telling is, well, we do plus 10%, which is quite reasonable, so to speak. At times, people say fashion is in trouble. And so my question is, why don't we just look at '21, '22, '23? Why don't we look at all financials from '21 to '25 altogether? Because if we do put these things together for the fashion industry as a whole, we have a good 5-year period.

Now as for this season, the general atmosphere is good, started off on the good foot. That's what we felt in the Milan Fashion Week. Of course, I keep talking about multi-brand stores, and I love multi-brand stores. But what do multi-brand stores do? Well, they boost our creativity. When we engage in research, we go to multi-brand stores because they would buy like maybe trousers from one brand, wear it with contemporary jackets from a different brand. And so that's all very interesting. Of course, multi-brand people should be very good at visual merchandising and lifestyle. But of course, novelty belongs to multi-brand stores, most of all.

So the trend now is that are going back to shopping in multi-brand stores, too. So multi-brands are doing well right now because people trust the sales associates they normally talk to because they know they'll come up with some interesting proposal for them. And then there's something else we should say. I mean, when you go to a single-branded store, that's one thing. But if you go and see Harrods, Neiman Marcus, Lane Crawford, I mean, you just walk in, take a tour and you see how your taste has been positioned and where it's been presented.

So you can actually see what your performance are, also depending on how you're located in multi-brand stores and the contemporary appeal of your brand is very visible, also depending on how you're displayed and merchandised in multi-brand stores. So of course, we do believe in multi-brand stores. It's growing a bit less than retail, but it's still growing. So should I think of the next 20 years, my project would involve multi-brand stores all the time. For us, it's always been an interesting channel. But besides actual sales, we look at brand positioning because multi-brand stores tell us where the collection is going and how it's performing. Now Chris, as to the accounting, our first margin is calculated as the difference between revenues and the cost of production.

So what is included in the cost of production, the cost of raw materials and consumption material and the cost of processing of these products. Other peers on the market, I mean, that's -- sorry, that's what we've always done to calculate cost of goods sold. So it's always been the same. So other companies, other peers actually match the cost of goods sold and the cost of production. And so besides the elements I just mentioned, they also add cost of prototyping, for instance, or the cost of in-house employees, which we actually classify as operating expenses. So that's maybe one difference between us and other peers. Thank you, Chris. Thanks for your questions.

[Interpreted] Next question will be asked by Charles Scotti of Kepler Cheuvreux.

I have a couple for you. The first one, it doesn't seem to be the case, but have the allegations in the report had any impact on your relationships with your end clients and/or wholesale partners in U.S., Europe or Asia or eventually suppliers? And have the allegations led to a request for clarification from, I don't know, various authorities like the Italian market regulator as it was mentioned in the press? And secondly, thank you very much for all the information -- clear information about your exposure to Russia in particular and also concerning your inventory management.

Is it your final say? I mean, are you stopping there? Or do you believe it's necessary, I don't know, to appoint an external auditor to testify your statement and definitely remove any doubt on those allegations? And finally, last question regarding the exclusivity of your brand. I totally understand the importance of wholesale multi-brand and outlet partners for you. Do you plan at some point to strengthen the selectivity in terms of distribution in order to prevent some of the less qualitative partners from reselling your unsold goods to online discounters?

[Interpreted] Okay. This is Brunello speaking. And I'll take your final question first. We have the best 400 wholesale accounts in the world. It's the 400 most beautiful stores in the world, and they've never created any problem at all for us. So in 2008, when the financial crisis happened, in October, November, some players started to extend some discounts, but it was just a one-off happenstance. So we are confident that we serve the 400 best stores in the world, and we're very happy with that. Something else is the impact on our clients. So as I told you, we sell to about 500,000 people. So of course, we tend to sell to wealthy people or well-off people at least.

And normally, wealthy people are really familiar with how profit is made and how much profit can be made. And so we are very confident about the image of our fashion house. So we realized in the last few days that there was no particular feedback. I mean, even the people who work at our showrooms didn't receive any particular comment on this. So we're not overly concerned. Of course, we could have done without this. But this doesn't mean we are concerned. Now Luca.

[Interpreted] Yes. What we're doing is in-house. We are going through all of the internal control activities we've done over the years. And so far, we have seen no infringement and no violation that should worry us. We have asked law firm to actually help us and do an outside verification on the robustness of our in-house controls. This is what we're doing today. So thanks for your question, Charles. And don't be worried. I would like to take a bet and think about it again in 30 years' time or 40 years' time. So the wholesale world has always been the most important thing for us. I mean, up until maybe 20 years ago, the whole fashion world was wholesale only.

[Interpreted] The next question will be asked by Maria Meita of Bernstein.

I have two. First one would be, are you aware of any investigations that the Italian authorities are undergoing following the short seller report? And then the second one regarding Harrods. Could you tell us more about the collaboration with Harrods for the festive season? And also what percentage of your sales would be in the U.K.

[Interpreted] Thank you, Maria. Luca will answer your first question.

[Interpreted] So well, we have no information about any investigation at all.

[Interpreted] Now as far as Harrods are concerned, I will answer you, Maria. This is Brunello speaking. We're going to have three very important days in London. So we'll have the Harrods windows for 45 days between December 1 and January 15 with the changeover to the Spring-Summer collection on January 2, and we'll take over all the Harrods windows for those 45 days, which is really, really important. So we'll have the huge panel display for 45 days there.

And it's really major for us, very, very important because that's going to actually boost our image next year. So we work very beautifully with Harrods. And apart from that, we go back to the idea of multi-brand. So people go to Harrods, and they have as many as 15 million visitors every year. So that means that at least 5 million people should walk by our location. So it's a bit like in Dubai, they have 111 million people going through Dubai every time -- every year. So I really want to attach a lot of value to those beautiful stores all the time.

And then next year, while the film is going to be shown around the world, I'm not sure I'm happy to know that because that means I'll have to be all over the place. I want it to be a kind of a part-time monk, but it's not going to happen anytime soon. But actually, the movie is actually showing and showcasing the name of our brand. So hopefully, it's going to boost us a lot. So I've seen it myself, and it's embargoed until December 4, and I just sleep for 3 days after I first saw the movie.

[Interpreted] Next question from the Italian line from Melania Grippo of BNP Paribas.

Melania Grippo, BNP Paribas. I have two questions. I'd like to know whether in the quarter at European level, you saw any difference in the performance of the different countries, France, Germany, U.K., if you can comment on this.

[Interpreted] Just this, Melania.

You also said that your exposure to Russian market is 1%. In terms of Russian clients...

[Interpreted] Melania, could you please speak up because we can't hear you properly.

The second question has to do with the exposure to Russian customers, also including traveling, tourists. Any difference?

[Interpreted] Well, as far -- so in Europe, everything is going really well. I have to say that the weather helps because this is your classic kind of weather. As you know, the season starts well depending also on the weather in France, Germany, England, Italy. So we can say that the season has started -- was off to a pretty good start. And then Russian customers in the world, well, they are very, very important. And we find them everywhere. We saw how this changed in Dubai, in Turkey and everything. Melania, we have always maintained usually our sales, so we had high revenues in Russia, but many people moved. We envisage -- yes, of course, we sell to very wealthy customers.

[Interpreted] So if there are no further questions, Chiara Battistini wrote two questions. The first one is the growth in wholesale. And how much was this a result of new customers? And how much by loyal customers? Second question, whether we intend to better control the way in which the wholesale customers -- clients manage their sales.

[Interpreted] Well, we have no new wholesale customers. I have to say that we enjoy a great relationship with them, and we trust them. But they are the most beautiful in the world. So it's not that we want to check and control them. As usual, we said, if something -- an issue arises with any of them, then we stop collaborating with them. But the only issue can be linked to financial issues. I'm very fond of Mr. Pressman, the owner of Barneys because -- and we were able to explode as a brand because 40 years ago, our products were displayed on Barney's windows.

And then, however, some economic issues followed, and that's what happened. We trust the multi-brands fully, but especially, we listen to them whenever they comment on the collections because if they are not happy, then that means that your product is aging. But if you go back home with your team and you basically say to your team that this was not very much appreciated, we can still work on it. And so we can do even better. Let me tell you something interesting.

Yesterday, Luca said, I am 45 years of age. I do not know the multi-brand channel that much. Whereas I, Brunello, I grew up with my esteemed, Hermès being displayed in the beautiful multi-brand stores and CHANEL too. Yes, that's what we talked about yesterday, Luca says. But honestly speaking, we have to say that many young managers, they're not familiar with the heritage of multi-brands. When you talk to them about multi-brands, you see they're not really familiar with it, not converse with.

[Interpreted] Yes, when I was working in the eyewear sector, and that's when multi-brand -- that's where multi-brands are still doing strongly there, yes.

[Interpreted] Next question from Nick Anderson, Berenberg.

Sorry, just to get one in at the end. But in last week's press release, you referenced evaluating legal action to protect your reputation. I just wonder if you have any update on where you are in that process or thoughts on it.

[Interpreted] As we were saying earlier, Nick, right now, we're actually looking at our in-house control systems. And at the end of that moment, we will decide what we should do with Morpheus if we do anything. It's not something we have finalized yet. Well, Nick, can I tell you something nice? I mean this -- today, we saw the first collections for Winter '26, and we just love them. So you know how important that is for us.

We know we are a product company. I've always thought that product is actually the reason for everything. If you don't have a fully contemporary product, no matter what you do, you won't succeed. Once again, if -- well, speaking of the inventory, again, inventory is not something dead. It's the stock rooms of the stores. I mean it's really important. It's there for people to come in touch with.

[Interpreted] We have a question from Louise Singlehurst of Goldman Sachs, please.

Just two questions for me. Firstly, I will just say thank you very much for hosting this call this evening to and bringing forward the results. My first question, just on the underlying regional growth. If we were to take the U.S. and China and exclude the new stores, would you be able to give us some of the like-for-like momentum in those markets or flavor versus for Q3 versus Q2? And then my second question was given all the noise over the past few days and having had the Board meet, is there any view on potentially changing or clarifying some of the disclosures a little bit differently going forward, particularly when it comes to things like inventory and understanding that more clearly?

[Interpreted] Well, I'll take your second question first, says Brunello Cucinelli. We have changed nothing. This is actually what our company is all about. But we have changed nothing really. We haven't altered anything. So we have worked a lot in the recent days on this trouble, but just four, five of us, not the whole company. Now Luca will answer your other question.

[Interpreted] Yes. The result comes from new locations plus existing stores, and there's a very good balance there. And as you know, we open new stores very carefully. So in the third quarter, we opened two stores, Abu Dhabi and Pudong, and these are the first two stores we opened in 2025 because throughout the first half of the year, we had new -- no new openings.

[Interpreted] And this -- says Brunello Cucinelli, this always [indiscernible] to our exclusivity project because, of course, if you have a lot of points of sale, they are less exclusive. It's mathematical. It's one of the tenets in our exclusivity. So it means we are trying to live as long as 100 years as a brand. So I know I'm boring about this, but I always think of -- I don't know, Vacheron Constantin, 270 years of soul, [indiscernible] they do 30,000 pieces and they are pieces of jewelry. And that's why they are so exclusive, and they've been around for centuries.

[Interpreted] Next question will be asked by Paola Carboni of Equita.

[Interpreted] The stronger growth that we had in retail in the Q3. How much is this linked to price mix and volumes? And on volumes, I was interested in knowing whether from your research, you can understand how much of this volume growth comes from new customers, so your ability to attract new consumers, thanks to the visibility and everything.

[Interpreted] Paola, I'll try and take your question. We always claim that tomorrow, we should be known less than today. And this is what exclusivity means. Yes, things are going well. The Fall-Winter collection was -- received positive feedback in July, and now it's very -- looks very good in stores. And the same went for the summer collection. You see when you come and visit where the collection is presented, you can really realize. When at the start of the season, you disclose your collection if it receives good feedback, you see it matters.

So we are going back to the great value of the product. This is very important. you can't always design your best collection. But if you do listen, you can change. When you go back home, you must have the courage to change something because maybe you see this part where a section was not appreciated that much. So Paola, we can say that taste, style, brand exclusivity, it seems that it is garnering quite a good success.

[Interpreted] Next question, Flavio Cereda, GAM.

[Interpreted] So I would like to ask you some sort of abstract question. So we said 2 million pieces and revenues split between retail and multi-brand. So in the past, I did buy your products online and offline at a discount. I remember Century 21 at New York, sometimes they had nothing, sometimes they had 10, 20 items. Then I stopped because every time I bought something, then Riccardo was teasing. We say, well, these goods -- these items you're wearing is six collections ago, six collections old.

But if we actually make the math, and given that you are in clothing, so seasonal product, numbers -- so it is true that multi-brands will not sell everything. So something will be sold at a discount, but numbers are so small compared to production that in my opinion, the concept of exclusivity is not -- definitely is unscathed there because we are talking about very limited and occasional quantity. But do you really mind -- this is my question. Do you care or do you do something, or the quantity is so small that you do not do anything?

[Interpreted] Well, on the behavior, you see we never say anything about the major names in multi-brands because they know they basically lose if they do something like that. If Lane Crawford, if they sell something at a huge discount, their image is blemished. So if BRAUN or Unger in Germany, if they sell something at a huge discount, they jeopardize their own image. That's why I say that I never came across anyone who was willing to basically jeopardize their image. Of course, 1 year it's the miniskirt, the second year is the long skirt. So if you have six miniskirts, the second season, you sell them at a discount. So that's why you will find more ladies clothing than men's because ladies are very seasonal.

If you do not sell this miniskirt by -- at the end of that month, that's it. But thank you for your question. Multi-brand is my passion. You should -- you can always trust -- you must always trust the feedback of the multi-brands. I never trust what our store managers say when they say, wow, it's beautiful, it's great. No, it's up to the multi-brands to say -- to have me say thank you.

[Operator Instructions].

[Interpreted] So there seems to be no further questions. We'd like to thank you immensely. And -- so the reason why we brought the conference call forward was, yes, to provide you with the preliminary data, but also to tackle this issue. Of course, had it not happened, it would have been felt better. But this is the rule of the games. So best greetings, best wishes.

But one last thing. So we were sitting at the bar once and a foreigner turned up, and he was really dealing the best cars. He was really great at playing cards. So he stayed at our local cafe for 3 or 4 days, and he won and counted and deceived everybody, not me because I refused point blank to play with him. But you see this is the rule of the game, and we tend to comply with it. So it was plus 50% on our first trading day. And so this means that these are the rules. You go -- there are ups and downs. Thank you very much.

[Interpreted] This is the end of the conference call. You can now disconnect your phones. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good evening, and welcome to the presentation of the results of the first half 2025 of the Fashion House Brunello Cucinelli. Speakers will be Brunello Cucinelli, Chairman, 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.

[Operator Instructions]

I'd now like to give the floor to Luca Lisandroni and Riccardo Stefanelli.

Good evening, everyone, and it's a pleasure to have you back. It's Luca here, and we are all gathered here in Solomeo, except for Brunello, who is in Prague, attending one of our typical traditional events that we mentioned to you very often. Brunello, can you hear us?

Yes, I can hear you very well.

It is actually the first time, Brunello saying since when we listed that I attend the call remotely, so to speak.

So we organize these interesting events because we usually invite between 120 to 170 guests. But I wanted to be among just think of how many people I need to be surrounded by. The only problem there is that I have to take pictures with everybody and especially with ladies, ladies are like themselves so you have to do retakes. But I'm very happy to be here. I'm very happy to be part of this call.

Luca, Riccardo, I give the floor back to you.

So we are here for this half year call when actually we are reaching the end of the third quarter. So what about the call? So I will organize it in three main topics. So the analysis of the results and I'll be reading out the results as in the first page of our reports and a quotation from Brunello, then our CFO, Dario, here beside me, will provide you further insights.

Immediately afterwards, Brunello will confirm our guidance for 2025 and 2026. And to conclude, I will take back the floor to offer you an update on our markets. And Riccardo will give you a comprehensive overview on production, supply chain, themes that are very dear to us and also including the opening of the -- on the extension of the Solomeo factory and the opening of new artisanal factories and with investments to be completed this year.

So now starting from the half year results with great satisfaction, we can say the first half of 2025 closed with very, very good results in terms of revenues, profitability and net income. Revenues amounted to EUR 684 million, up 10.2% at current exchange rates and 10.7% at constant exchange rates versus June 30, 2024. EBIT, EUR 113.8 million, up 8.8% versus H1 2024 with a margin of 16.6%, 16.9% as of June 30, 2024.

As to the net income, it amounted to EUR 76.7 million, up 16% versus June 2024 with an incidence of 11.2% vis-a-vis 10.6% in H1 2024. 2025 represents a most important year for investments with the early completion, 1 year ahead of plan of the 2024 - 2026, 3-year program or plan for artisanal made in Italy production. This includes the doubling of our Solomeo factory, ensuring a serene working environment until around 2035.

As of 30th of June 2025, investments totaled EUR 63.5 million versus EUR 44.8 million in 2024. The balance sheet is very sound with a net financial debt at EUR 197.2 million, reflecting both the above-mentioned investment plan and the dividend payments of EUR 68.8 million altogether. And as of 30th of June 2024, net financial debt was EUR 102.3 million. So the very, very positive sales trend in July and August in continuity with the growth of the first 6 months as well as the excellent start to the fall/winter '25 collections in our boutiques. This strengthens our confidence for a full year revenue growth of around 10% with healthy and balanced profits.

Now let's take a look at 2026. We can see the spring/summer 2026 sales campaigns are performing excellently. The men's campaign has already been completed, while the women's campaign is still ongoing with extremely positive feedback. So these excellent outcomes, together with the pleasant atmosphere surrounding our brand reinforce our outlook for revenue growth of around 10% also in 2026.

Brunello Cucinelli commented as follows. So we closed the first half of 2025 with excellent results in both revenues and profits, achieving that healthy and gracious growth, we so deeply cherish. We strive to enable the work of our craftsmen to conduct business whilst respecting the moral and economic dignity of the human being with the impression that each of us is constantly searching for a sound balance in life, in work and in the much long for human relations.

Fall/winter sales have truly started very well as have the men's and women's Spring/Summer 2026 orders. All this, together with the pleasant atmosphere surrounding our brand, allows us to work serenely and to envision closing 2025 with healthy and beautiful revenue growth of around 10% with equally healthy profits and to look towards 2026 with the same balanced growth, once again, around 10%. Dario, the floor is now yours.

Good evening, ladies and gentlemen. Let's now take a look at the main economic financial performance in the first half 2025, inviting you to go back to the slide presentation on Slide 14. So the revenues confirm the preliminary figures of June 10 of revenues growth of plus 10.2% constant exchange rates, 10.7%. As for the other items in the income statement, Slide 15 shows at 30th of June 2025, margins, cost structure that is very balanced. EBIT and net equity up plus 18.6% when compared to 30th of June last year.

First, margin, 74.5% of revenues, unchanged vis-a-vis the first half 2024 as mainly as a result of the sales mix per distribution area and geography that are basically in line with the past half year. Operating costs show an increase by 8.5%, and they mirror the expansion of our company.

And now on Slide 17 to analyze the main cost items, personnel cost, rents and communication. Here, we can say the personnel costs as of 30th of June 2025 amounted to EUR 125.6 million and it shows an increase of plus 11.5%, slightly more than proportionate than the growth of revenues with an incidence of 18.4%, 18.2% last year, 18.3% at the end of 2024 full year. As of 30th of June 2025, the number of human resources amounted to 3,283 full-time equivalents with an increase of 262 FTEs vis-a-vis June last year.

And this is ascribable mainly to the targeted expansion of our retail network, but also the strengthening of the production personnel pertaining to the increase in internal production. Cost of rents net of the IFRS 16, EUR 104.6 million or 15.3% as incidence on revenues, up by 20% vis-a-vis EUR 87.2 million or 14.1% as of 30th of June 2024. And this increase is down mainly to the new selected openings and expansions in the second half of 2024, the renewal in contracts and partly to the costs for the expected expansions in the second half of the year already accounted for.

Then investments in communication, EUR 44.4 million with an incidence of 6.5% vis-a-vis with EUR 44.6 million or 7.3% of revenues of 1st of June 2024. The lower incidence of this first half 2025 is the result of a different planning of events, artisanal events organized by our fashion house. According to this planning, more events are concentrated in the second half of the year with a natural effect that you can envisage with the rising investment in communication in the second half rather than the first one and up compared to 2024 full year.

Before moving on to the commenting the main KPIs of the income statement below the EBITDA, I'd like to talk about transportation and tariffs, EUR 33.9 million in 2025, 5% of revenues vis-a-vis EUR 27.9 million last year, 0.5% as incidence on revenues. This item shows an increase by 21.5% more than proportionate the net revenues, mainly due to the introduction on April 2, 2025, Liberation Day, on the Liberation Day of the higher tariffs on sales in the U.S.

We'd like to remind you that the introduction of the higher tariffs in the U.S. does not -- is not mirrored in -- does not mirror an increase in prices in the second half because during this season, we never, never changed our price list for the spring/summer 2025 collections.

And then to wrap up on Slide 17, as of 30th of June 2025, D&A EUR 86.8 million vis-a-vis EUR 73.2 million at June 2024, and they show an increase of plus 18.6% or EUR 13.6 million, mainly due to the new rent lease contracts that we signed during this period. So in line with the rents at the end of the first half, depreciation and amortization without the application of IFRS 16, that would amount to EUR 26.1 million vis-a-vis the EUR 23 million of the first half 2024, fully in line with 3.8% incidence of revenues, in line, as I was saying, with what we achieved last year as a result of all this, as I said in the introduction, EBIT, EUR 113.8 million, up by 8.8% with an operating margin of 16.6%, 16.9% last year.

Also, there was this increase in EBIT with financial charges of EUR 6.5 million tax rate, 28.6%. Net income as of 30th of June 2025 amounted to EUR 76.7 million with an incidence of 11.2%, up by 16% vis-a-vis last year. So before concluding on income statement, I'd like to go back on the financials part with Slide 18, where we have reported the usual breakdown, highlighting a recurring component and a component having to do with ForEx and then also shareholdings. The increase in the recurring part, 54.5%, EUR 7.2 million is mainly due to the financial charges calculated on the liabilities for leasing, EUR 13 million 30th of June 2025 vis-a-vis EUR 9.2 million last year as a result of the new lease contract related to the new openings and the renewals of some stores, but also the increase in net financial charges linked to the financial debt.

The component linked to ForEx, it shows an income, an increase by EUR 10.2 million and it is basically the result of the unrealized gains of the net income coming from the swinging of ForEx, and this is subject to the changes from time to time.

Now Slide 19 and following to give you some short comments on the following items in the balance sheet, net working capital investments and financial net debt.

Net working capital, including current net assets and liabilities is equal to EUR 303.1 million with an impact on revenues in the first half of 2025, equal to 23.2% versus 19.3% as of the 31st of December 2024. Now the detailed items, we can say that trade receivables in the first half 2025 have an increase by 24.3%, mostly due to the excellent performance in revenues in the second quarter with particular reference to the wholesale channel.

And this confirms a very sound situation. We would like to point out that losses are almost negligible as it has always been the case and changed payment terms and trade receivables, trade payables equal to EUR 173 million versus EUR 160 million as of the 31st of December 2024. The incidence of inventories on the rolling revenues is equal to 28.2% and is basically in line with what was reported as of the 31st of December 2024. And this level of inventories is considered to be sound and normal for our business.

Other net assets and liabilities have a negative result equal to EUR 5.2 million versus EUR 36.5 million as of the 31st of December 2024. And these changes are mostly due to the fair value evaluation of derivative instruments to hedge current exchange rate risks.

On Slide 20, you see the investments. In the first half, we have EUR 63.5 million, 9.3% of our revenues versus 7.2% of last year. EUR 32.1 million are the important trade investments to support the image of our Casa di Moda and the expansion of our showrooms and renovations, EUR 24.4 million are due to other very important investments invested in technologies.

Last but not least, to conclude, the net financial debt typical of the core business, as you can see on Slide 21, is equal to EUR 197.2 million in the first half '25 versus the EUR 102.3 million as of the 31st of December 2024, including the payment of the taxes. The net financial position is the result of the positive economic result of the period, the important investment plan, the changes in the net working capital as described above and the payout of the dividends for EUR 68.8 million.

Thank you very much for your attention. And Brunello, I would leave the floor to you because I've concluded my remarks. Thank you.

Thank you very much. Now I would like in the next 3 minutes to share with you our outlook on how we are going to close 2025. Prior to dwelling on other topics, we would like to confirm the year-end forecast that we confirmed in July. So turnover up 10% approximately. Margin, EBIT slightly improving compared to last year. Investments equal to about 10.5%. This is very important. But please keep in mind that 2026 and 2027 investments will be around 7% as usual. Those large investments that were carried out in 2024 and 2025 have laid the foundations to work with peace of mind in the following decade.

So as you may have understood, we are very, very happy with the performance in 2025. As far as 2026 is concerned, you know that the men's collection has been released. We've collected orders for wholesale. The collection has been extremely successful, but very important is also the feedback of journalists as collected during PT in Milan. As far as womenswear collection is concerned, we are halfway in the collection in the campaign, but we can say that results have been very good.

Let's wait until September for the World press assessment. As you know, this judgment is very important. This opinion is very important if the international press say the collection is not contemporary. Well, this is a major issue. The third very important element is the very good start for the fall/winter '25 sales. As you know, they start in the beginning of July. And so we are very confident for 2026 with growth that we always like equal to approximately 10%. So this is it as far as '25 and '26 are concerned.

In our conference call in July, we dwelled on topics that are fundamental for us. Let me recap these topics in a minute. We work in the absolute luxury end only. So everything we say should be considered for the absolute luxury bracket of the market only. And then the value of deliveries is extremely important for us. The value of quality, the value of craftsmanship in our products are also key. We are at over 62% mannered work in the manufacturing of our garments. And then great value has exclusivity as well.

We also provide great value to multi-brand stores in the world, 400 as it has always been the case, and we've never had issues with payments. And last but not least, communication. You know that we keep on saying that today, we would like -- well, that tomorrow, we would like to be less known than today. That's for sure because we think that we have a sort of an overcommunication right now. And if we do believe in exclusivity, this is what we have to pursue.

Last but not least, tariffs. Well, on April 3, we set up within the company a sort of task force of crisis unit because of the tariffs, which was closed after 4 months. In our company, tariffs impact only 5% and only in the U.S. market. These are the key topics for us.

Now Luca will provide you with an overview of the market. Riccardo will give you an overview of the Italian supply chain, and then we will recap all this together. Luca, you have the floor.

Thank you very much, Brunello. And let me start with what you said earlier. So we consider only the very top end of the market. Let's start with July and August sales. For us, they maintained the very positive trend that has accompanied us throughout the first half of the year. And this figure is very significant for two reasons as we are already at the end of August, this means that we have set the stage for very good third quarter results. And then they show the excellent start, as you said, Brunello, for winter collections. And this is very important because it confirms that we have menswear and womenswear products that are highly appreciated by our customers.

On the one hand, we can say that we've closed a very positive summer season. On the other hand, and we can say that we've started the winter one in the best possible way. So we think we will be able to achieve a third quarter as well with a very sound, healthy, well-balanced and steady growth in line with the previous quarter. Again, so early in the season, we see that we have very exclusive, very high-quality garments that looks full, and this is a common denominator throughout the world.

Let's now go into the details of geographies, and let's start with North America. Here, the situation has been very, very good. New collection means new prices incorporating the new tariffs, as already mentioned. And we have no material effect on the willingness to buy and on sales results.

With that, Luca, let me interrupt you for a minute. I'd like to highlight the level of pricing, 100 Europe to 125 Europe and 128 Asia.

All right. So as far as Europe is concerned, Europe is extremely strong, a very good summer. Again, a strong contribution came from domestic regional customers. And we also had a positive contribution by tourists, high-end tourists who continue to focus on Europe as the most attractive summer destination. As far as Asia is concerned, the situation has been excellent in China as well. China has been very positive across all its regions, Mainland, Hong Kong, Macau and Taiwan.

As for Japan, Japan is going back to its essence to its nature. So primarily -- it's primarily domestic market, and it's very positive for us compared to last year. As you may remember, this -- well, last year was a very special year. And so again, we expect a very beautiful, very successful third quarter.

Let's now have a look at the market. I have three brief remarks. First, it seems to us that we've come back to the past. Brunello often reminds us of the difference between the so-called high-end brands and upper middle range brands. And these were brands following completely different strategies and completely different dynamics. It seems as if the current situation resembles what Brunello has always described to us.

And our remark that holds true, especially for Western markets and for high-end luxury markets. We perceive sort of a greater distance between the brands and their customers. And this distance may stem from a feeling of doubt, a sort of suspicion, I would say, due to the price increases that took place in the past and which is now further fueled by the investigations into supply chains.

So how did we respond to that? First, we maintained a very well-balanced pricing policy. Secondly, we've been organizing events, as Brunello said in the beginning, and we kept on investing a lot in people, in our human resources working in the stores. As far as prices are concerned, you know about our strategy. We believe a price increase equal to 3.34% per year is a sound pricing policy with a revenue growth plan of 10%.

As for events, we strongly believe in events, as often mentioned. We believe that there is nothing more effective than meeting people in-person. And one of the things that positively struck us in recent months has been the reaction of customers to the letters that we write to thank them for attending one of our events. And we thought that saying thank you could turn a moment into a memory, and this was the case. But our customers have exceeded our expectations and remind us of the importance of simple gestures and especially the importance of saying thank you to people, as Brunello said, well, the presence of Brunello is very important, but also we as a family and I was personally in Stanton for an event, Carolina, Camilla, Alessio were there, too.

And so the possibility of having relaxed evening together without feeling the pressure to buy something and then the possibility of taking pictures together. And another important thing besides spending time with the families that regardless of the country where we organize the event, be it Japan, the Middle East, the approach doesn't change. There is this very same desire of taking part in that moment of proximity with us and with the brand.

Thank you, Ric. And another important thing is investment in people, staff in the stores. We keep doing this with great conviction. You have seen this in the numbers that you saw before that Dario mentioned. We keep telling the same thing to these people. They need to be aimable. They need to be really to be the face of the brand. They need to be the protagonist and embody the gentle luxury that inspires us. And basically, we expand the size of our stores because we want to dedicate time and attention to all our customers.

So the last comment on markets has to do with China. We have the feeling that you see the wait for a Chinese restart as the engine of industry growth, a new moment of discontinuity that interrupts what many call a suspended time. Well, this wait keeps getting longer, we have the feeling. Well, now taking a look at the higher part end of the market already today in -- on a daily basis, we see a China that is balanced and modern, very modern, that is very healthy in its approach to luxury. It remain -- in our opinion, it remains the market destined to provide the luxury industry as a whole with millions new customers year after year. But it will probably do so with more gradually and without the excess of the past.

For us, China is already important today as a market, accounting for about 13% of our turnover and will become increasingly so. But through -- how do I say, to a process of organic gradual growth that is always driven by the search for exclusivity and garments of the highest artisanal quality. So we have planned for the following years, the opening of 1 or 2 stores -- new stores per year, if possible, 1 or 2 enlargements, expansions depending on the opportunity that might arise. And we expect still today that within the existing Chinese stores, we can achieve healthy comparable growth.

So -- and the decisions that we made together is the following. Even at a time of great opportunities for our brands because we have never received, as we were saying in July, we have never received so many proposals for beautiful prime locations to expand our retail network, but we have decided not to accelerate either in distribution or in communication. As you know, we believe that China is a place where young Chinese people are hyperconnected and everything risks being naturally faster.

We attach, however, great value to the opening of the Casa Cucinelli in Shanghai, which is scheduled for the second half of next year. And you see it is a very traditional Chinese home that has been refurbished impeccably in a particularly fascinating location. And you have a few low traditional houses surrounded by a skyscrapers. And we believe that the opening of the Casa Cucinelli can be a very important tool to promote a deep knowledge of our brand.

Now I'm drawing towards the conclusion. What do we expect for the last months of the year? What are the activities and objectives? First of all, 2025 openings plan, everything confirmed with respect with -- to what we already told you, the opening of IFC Pudong Shanghai, one store in Macau, the Abu Dhabi Galleria store. And to this, we're bringing forward by a few months compared to the forecast for 2026, a street boutique in Camel by the sea, one of the -- on California's iconic locations. And it is an area that we feel very akin to us. It's very, very familiar to us. And then in addition to that, let us recall the relocations with enlargements in Paris and saddling 2025 and 2026, we have the Geneva store.

And in the first half, we already expanded the Vienna store. As to the events and communication, Dario already said -- gave you detailed numbers. But in the last quarter, we will have a concentration of this year's investments. There will be four relevant significant meaningful events. The first one in October with Brunello, we will spend a week between Japan and Korea with different events that will be particularly enticing. Then on December 1, Brunello is to be honored in London with the British Fashion Council award. And there, there will be a total takeover Harald windows precisely on that occasion. This takeover will last for the whole of December and January.

So a very nice switch between the winter and the summer collection and then the premiere of the movie. All this should accompany, so to speak, sales, which in our retail naturally peak in absolute value in precisely in the last quarter of the year, also thanks to the higher average value of the winter collection. In any case, we envisage 2025 with harmonious growth as balanced as possible across quarters, channels and geographies as has been the case so far this year.

And then as to 2026, so regarding 2026, the most important piece of news is undoubtedly the excellent spring/summer 2026 sales campaign. And this means not only wholesale revenues, but also a very first and very important reassurance about the quality of the product offer we will have in our -- all our stores in the first half of the next year.

As to 2026 openings, as usual, as it is customary for us, most of the openings are already secured by contracts. We envisage 3, 4 openings and 3 or 4 enlargements. And we keep feeling that our brand still has many opportunities, our brand and our fashion house. And we try and approach all this with enthusiasm, balance and sobriety.

Riccardo, the floor is yours.

So thank you, Luca. As Brunello reminded us, I will update you on production-related matters such as the doubling of the Solomeo factory, then the new artisan factories in Penne and Gubbio. And then I will conclude by saying something and telling you about the value of our artisanal supply chain.

So the most important figure here is what we said in July. The production investments of the 2024, 2026 3-year plan are nearing completion and will be definitely concluded by November of this year, as already mentioned during the July call. That's 1 year ahead of schedule. And we really like the idea of finishing earlier. We like the idea of having these spaces to be there ready, welcoming for the coming 10 years.

Therefore, we confirm the 10.5% incidence of investments on revenues, which will return to around 7% in 2026, as Brunello mentioned. And when we talk about our ratios 10% growth and we envisage 6% in volumes, 4% in price mix. We believe that this can cater for our growth for the next 10 years or so, these investments.

So now drilling down the doubling of the Solomeo plant has already -- is already operating. The first part of the new plant is already operational, while the second will be completed and fully functional by November. Another important update on September 4, on Thursday, we will open the significant expansion of Penne. As you know, it is a crucial pivotal place for Amazon because it has always represented a district of excellence for blazers, especially menswear, outerwear. This is an important investment, not only from an industrial perspective, but also socially and culturally as it strengthens an artisanal tradition deeply rooted in the region.

Added to this is the Gubbio project, which you will know equally well as a district. And this investment is also close to completion. So thanks to these 3 projects, we can affirm that the 2024-'25 investment cycle will already be completed this year. And as we were saying before, we hope and we envisage that this will cater for the growth of our fashion house for the coming 10 years until approximately 2035.

Luca. Well, it is nice to see how more and more customers ask to visit and tour the plants and factories, and we're very happy to accommodate this wish because really, they have this desire, this curiosity to know. And this attaches even more value to their preference when making their purchases in their shopping. We'd like to highlight once again even better the importance of the Italian artisanal supply chain. And it remains central. It is made up of over 400 small artisanal enterprises with whom we, as a brand, we repeat it very often, we do want to say that we enjoy a direct relationship with all these subcontractor suppliers. It's never intermediated by platforms.

And to these subcontractors, we have always guaranteed a fair profit, and we'll go back to this later. So these 400 small enterprises employ around 8,700 people in total. And I remind you that at the end of December 2024, there were just 8,000. So as you can see, it is on the rise. 70% of these workshops, 400 workshops work exclusively for us, while the others also collaborate with the major French fashion brands, which as they themselves admit, produce about 70% of their goods in Italy.

And this enhances even more the value and the worth of this artisanal supply chain, not just for Italy, but also for the foreign brands. Today, we can say that this network is sound, not only economically, but also from a generational point of view in the average age of owners is 49 nowadays. And we like that because in the past 5 years, the average age has not increased with the passing of time. So it means the new owners have stepped in, new young entrepreneurs who decided to follow in the footsteps of their parents.

So the average age of their workers is 43. But I'd like now to go back to a fair profit because if we brands can are able to guarantee and we behave in a fair manner, and we can guarantee to this network a fair profit, well, this is the essential component. This is the trick to have young people decide to take up these jobs. And this is really something yes, because it means that they can see the future. They can envisage that out of that job -- traditional family-run business, they can actually have a future.

I have to say that in the past few months, many have asked us what our approach is to the supply chain. And I have to say that besides this direct relations that is fed on a daily basis because we always go there to check them out. We also have some sort of additions. For example, at the end of the fall/winter 2025 production, and we do it every year, we send them a letter where we tell them how deliveries went, how the quality was, and we always thank them because there's always top-notch quality. We do a planning, and you heard it from Brunello and Luca that the sales campaign for spring/summer '26 is performing really well. And this results in the fact that the work of these workers between September and February will be pretty important.

Then the third aspect that we dealt with in this communication, well, we give them a strong reminder of the importance of taking care of workplaces and people's conditions. And I have to do that they're very good at that. They need to really take care of their workplaces because this is something we have always seen to. We do this together. And it's very important to strike an important balance between work and private life as well as looking after the economic and more conditions. And the balance between private and work is one of the fundamental elements of what we like to call fair work.

So we have a direct relationship and very frequent communications. And also, we meet in-person. And on October 3, next, we will meet them all, all the workers, the subcontractors in our strategic annual meeting on October 3. And this is an opportunity to comment on deliveries, quality, production plans and it is important to plan with serenity. This has always been a very nice time for me, Luca says, because in the very same week, we organized a huge meeting of salespeople, and it's nice to see how everybody meets and gathers around the very same goal.

Thank you. Thank you, Luca. And it is also very nice to see the level of participation where we strike a balance of the year. We have a highly participated event. And well, these are small entrepreneurs, and they are able to plan together with the company.

Last but not least, I'd like to conclude with another great topic, which is the great value of Italian district. And I would like to close on that with a reflection. As I said, the Italian supply chain is certainly acknowledged around the world as one of the most reliable and high-quality supply chain in the world. It's not by chance that major financial -- major French brands produce about 70% of their products in Italy. This proves the extraordinary manufacturing capacity of our country and also the uniqueness, the exclusivity of our country. There are products that can be manufactured only in Italy. But there's more.

Each Italian district has, over time, not only served established brands, but has also set the stage for new ones to emerge. And so this unique ability to both serve and create is what makes our district an unparalleled model globally. So you can hardly find similar districts worldwide. And for us, this is the best guarantee for the future. The fact of being able to rely on a network of subcontractors of women and men who with their hands materialize ideas of beauty, exclusivity, authenticity. And this is our idea, our gentle luxury. Thank you. Thank you very much. And I'd like to give the floor back to Brunello.

Thank you. Thank you very much. This is the first time that I've listened to you, and I must say you are pretty good. So let's now draw some conclusions. So some days ago, we released the autumn/winter advertising. And I'm in a sort of a maze of books. We like this image very much. As you've probably understood, we work in a great atmosphere focusing on a single theme, our fashion Casa di Moda is a ready-to-wear company positioned in absolute luxury, which we call gentle luxury, and we also offer lifestyle products.

[Operator Instructions]

The first question by Andrea Randone, Intermonte.

I have a couple of questions, but you have already provided a lot of details, but I have these two questions. The first question is a rather conceptual one. You hinted at the fact that some important players may have increased prices excessively. Some others may have not monitored the -- their supply chain correctly. Do you think these trends are supporting you in strengthening the loyalty of our customers? Or do you even have customers who were not your customers and who joined your brand? Can you make some examples about that?

And the second question is rather financial question. We've seen the development of the working capital and you have provided extensive details on the development of CapEx for 2026 and '27. By the end of the year, can we consider for the net financial position as of the end of June proxy for the end of the year? And can you briefly comment on the development of the cash flow in the following months?

Thank you Andrea, I will answer your first question, and my colleagues will answer the second question. As far as that behavior of brands is confirmed. Well, we don't know what we can tell you. We like the fact that the people congratulate with us when they enter the stores and they meet kind staff. So this is what we have been saying for a long time. This is the only thing that I would like to point out. But I wanted to highlight of the high value of the Italian supply chain. And now for the second question, you can answer.

Yes. Well, as for the net financial position expectation, let's go back to last year for a second, December 2023, the net financial position was mostly equal to -- was basically equal to 0. And in the first half, we reported a net financial position of EUR 100 million. And this was the same increase that we achieved as of the end of the year. And so we started that the first half with an increase of EUR 100 million, reaching EUR 200 million now. And we believe this will be the net financial position as of the end of 2025.

So it's a very good proxy for the -- well, the June net financial position is a good proxy for the year's end.

The next question, Luca Solca from Bernstein.

I have a question on the perception of exclusivity and on the importance of keeping that feeling of contemporary products. I realize this is a fundamental element for the business and for the attractiveness of the brand. And so the exposure to the wholesale channel is key in this respect. How can you reconcile that and the perception of exclusivity with the fact that on the market, in the Internet and in multi-brand stores, you may find some discounts.

And you may actually see that products are available at a lower price compared to the original one. So what have you -- what are you planning to do in order to restrict this risk?

Well, let me start with this last risk, which is nonexisting. We have 42% of multi-brand stores, but multi-brand stores are the real custodians, guardians of products. If they don't like your product, you're ruined. And they judge your collection. When they say -- one would say the collection performed well, it is because multi-brand stores judged it. You have store managers, but what can they judge or evaluate if they haven't seen products for the upcoming season. That's the great topic in order to focus on contemporary collection.

And then exclusivity, the topic is always the same. We do believe in exclusive products. And now exclusivity has been replaced by replaceability. And in the Italian language, these concepts are completely different. Well, I have a Constantine and an iPhone before me, but well, Constantine may have 100 years of history. iPhone well is shared by billions of people. One is an exclusive product and the other one is a desirable product.

And then -- well, look, we've never organized or carried out smart working home office policies. This has restricted creativity and stifle creativity a lot. Creativity is based on teamwork and people meeting one another. And this was not the case during the smart working period. Young people could not learn anything. They may have understood that they will work just a couple of days a week. There is no separation between physical work and home. And this has penalized creativity. Creativity has not only to do with style. It pertains to production. It pertains to anybody coming to work.

Our goal is, therefore, to work 8 hours per day or 7.5 hours, but to come to the workplace and work. We believe in exclusivity. We believe in multi-brand stores. We have 400 multi-brand stores in the world, which judge the collection, Luca. And if you are courageous enough to listen to them, you change your collection. If you're not courageous enough to listen to them, you will go bankrupt in a couple of years. And then, of course, you can give some special rebates or discounts of the market, but this has no impact on the exclusivity of the brand. So thank you. Very interesting question.

Next question from Oriana Cardani, Intesa Sanpaolo.

My first question has to do with the gross margin. I wonder if perhaps in the second half of the year, there could be an increase vis-a-vis the first half given the completion of the factories in -- by November.

And the second question has to do on the new communication campaign, advertising campaign. It is sort of -- it is basically it emphasizes reading and books. I was wondering whether this anticipates an inauguration of the library, universal library in Solomeo. And perhaps a comment on the message.

So as to the gross margin, they will answer this question, but we think that we will slightly improve compared to last year. As to the advertising campaign, I want to take this question. It has come out of a scene from the movie that we built with 70,000 books, some sort of granary binary for the store, as Andre Hadrian said, we have received so much appreciation and positive feedback from very important people. So this means that we really need to resort back to the value of books and the value of eternity, if you wish.

And there is no doubt that in 2 years' time, we will open the universal library, and this is something really high on our agenda. But we were not expecting such a worldwide success out of this advertising campaign. So we are very pleased. You should know that we never advertise the product itself. So for us, it's very difficult to achieve beautiful images. Sometimes they're good, sometimes they are so and so, and sometimes they are excellent. And this one, I would say, is definitely excellent. Thank you, Oriana.

As to the gross margin, Oriana, I'll take the question. We expect a slight increase in the second half, driven by the channel mix. It is mainly a growth in revenues, and this will drive better margins. Thank you.

Next question from James Grzinic of Jefferies.

I have a very basic question. Do we have to take your comments on July and August [indiscernible] literally, so 2 months in line with the first half, around 11% and whether within that, there are some changes depending on the region or all the markets have a similar growth?

Well, James, we can confirm everything. We are growing well across the Board, like Luca said, we are very glad. And since the fall/winter collection has been in the stores, on the shelves since early July, this really makes us pretty confident for the future. And then also the reaction to tariffs. At the end of the day, these tariffs in the U.S., they account for about 5%. But if you are to buy a blazer for $3,000 and instead of $3,000, $3,250, there's not much difference there. It's just the whole vibes that was created. But one thing is important. We are here to talk about natural and we're very happy of how things are doing. I've heard good results on watches to last time. So we are happy. We are happy.

Next question by Louise Singlehurst from Goldman Sachs.

You've given us lots of detail. So I have two quick follow-ups, if I may. Just on the manufacturing and the expansion, can you just talk to us about the product? I know you mentioned Penne and the blazers, but is it much more about the made-to-measure ramp-up that we should expect to see over the next following seasons?

And then my second question was just to clarify the pricing point for the U.S. about how much you've taken? I realize you don't take any pricing during the middle of the season, but pricing year-to-date and the plan for fall/winter for the U.S. specifically.

Yes. I will start from the second question. There will be no price increases. We increased prices every 6 months. So the prices are the current ones that you see now. As far as production is concerned, of course, these factories were established and set up mainly for men's blazers and because they are extremely difficult to make as a garment. And at Penne, there is some sort of academy of the esteemed Brioni brand that brought about all this. So we are very pleased.

As to the men's blazers, properly made men's blazers can only be made in Italy, I would say, and it's not an easy task whereas the ladies blazer, I wouldn't say that it is much easier, but it is slightly easier. Men's blazers are more difficult to make.

Next question by Chris Huang, UBS.

I have two. The first one on the marketing communications expense. I think in H1, you did 6.5% as a percentage of sales. Can you maybe just confirm the full year guidance? Is it still around 7% of sales for the full year?

And secondly, on China, I know you have been doing very well, I think double-digit growth, as you commented at the last conference call in China. But in terms of the wider kind of retail environment, are you seeing any, let's say, return of traffic to the Chinese malls? Or what are the general trends you are seeing from the ground?

Well, as far as China is concerned, Luca, you take the floor, and I may answer on the expenses. But we said it is around 7 something, it is like last year for the second part of the year.

As for China, yes, Chris, for China, Luca speaking, we never perceived across the whole year a lack of footfall, lack of traffic. We can say that within our boutiques, we have an excellent growth in traffic. And there is -- there are many loyal customers. And of course, there is also new customers coming into. So we see no radical change, material change in terms of footfall in the stores. Rather, we see an excellent traffic in our stores every day. And we have seen it, right, since the beginning of this year.

But Luca, Brunello says we are talking about exclusive special garments. So everybody is in the lookout for beautiful garments that are really original. So this is something that is true worldwide exclusivity.

Yes, Luca resumes and says this is particularly true in China, where we believe that the lookout for exclusivity will be important to drive the growth of the market in the coming years. And Chris, we can confirm that we see a continuity in results also vis-a-vis the growth of the first half.

Next question by [ Mariana Tabaskin ].

I would just add one more to Luca's earlier one. We noticed that you have started selling more products with logos on your website. Is this a change in strategy or sort of capsule collection that you have now on?

No, no, no. Brunello takes the question. Absolutely about products with logo, the ones that you see, then it might be maybe a T-shirt for tennis, but there is absolutely no change in strategy. We are a no-logo company. Of course, if you have a tennis T-shirt, perhaps it's nice to see the coat of arms or the Quest of Solomeo. Maybe it's something just for visual merchandising that we do for lifestyle products, perhaps on a towel or something like that, something that is not for sale, that is just useful for lifestyle. There is no change in strategy. We are a no-logo company and still want to be so.

[Operator Instructions]

So no more questions for the time being. No, we have -- sorry, David Martinelli -- sorry, he just called off.

Okay. So thank you, David, and thank you, everybody, from the bottom of our heart, we'll speak again in October. And let's try and tackle life with a bit more madness and attention. Best wishes to all of you. Thank you, and have a nice evening. Goodbye.

Chorus Call operator speaking. The conference call has now come to an end. You can disconnect your phones. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]