Brunello Cucinelli's Profits Rises on U.S., China Growth

MILAN—Italian luxury brand Brunello Cucinelli said Wednesday its net profit for the first six months of the year rose almost 3% compared with the previous year, to €15.5 million ($17.8 million), as revenues were boosted by favorable currency fluctuations.

European luxury companies, including LVMH Moë t Hennessy Louis Vuitton SE and Kering SA, have seen sales boosted by the weak euro in the first part of the year, as sales abroad account for even more when converted back in euros. In Italy, Moncler, for example, saw its first-half revenues rise 35% at current exchange rates but only 26% at constant rates.

Brunello Cucinelli, based in Solomeo, Italy, said in July that its first-half revenues, at €200.3 million, rose 14% on the year at current rates, but only 9.3% at constant rates.

Sales rose almost 26% in North America and 14.5% in Greater China, the company said in a statement. Brunello Cucinelli is among the less exposed Italian fashion firms to the Chinese market, which only makes 6% of total sales. North America accounts for almost 35% of total sales, while Europe accounts for almost 32%.

In Italy, which accounted for 18.4% of the company's sales, revenues rose 1.8% compared with the previous year.

The company has opened more stores this year, reaching 79 directly operated boutiques as of the end of June, compared with 65 in June last year. This has contributed to a rise in operating costs, which reached 47.3% of sales compared with 43% last year. The rise was largely driven by higher rental costs, which grew 74% compared with the previous year. The company said that such increase is due to the repositioning and extension of existing stores as well as to the higher rentals in some exclusive locations around the world.

The improvement and widening of the company's retail network took most of its €14.8 million commercial investments in the first half of the year, the company said.

Earnings before interest, tax, depreciation and amortization or Ebitdas rose 11.8% compared with the first six months of 2014, to €33.4 million.

Write to Manuela Mesco at [e-mail]

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August 26, 2015 13:25 ET (17:25 GMT)

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