Brunello Cucinelli reported sales growth and confirmed the forecast. Is it worth buying the stock?

Italian luxury cashmere brand Brunello Cucinelli sought to reassure investors about the sustainability of its business after an attack by short-sellers dropped its securities by 19% in two days. The company reported sales growth of 11% in nine months and reiterated its full-year forecast. It also officially responded to accusations of continuing business in Russia. Analysts are not losing optimism about the brand: most of them recommend its securities to buy.

Brunello Cucinelli reaffirmed its full-year growth guidance in its nine-month 2025 financial report, with the company expecting its revenue to grow 10% in 2025. The company's announcement comes about a week after the publication of a memo from Morpheus Research shorts, which said the company misled investors about its operations in Russia and its discounting practices.

According to the report, sales for the nine-month period rose 11% to €1.02 billion, the first time in its history the company has surpassed the €1 billion mark, WSJ notes. During a call with analysts, CEO Brunello Cuccinelli said the company's year-end EBIT margin will be slightly above the 2024 level, Bloomberg reports. The company added that its stock is in line with historical performance.

In response to the short-sellers' accusations, the brand said that it has been consistently reducing its revenue in Russia: in 2021, the country's share was 9.3%, and in 2024 it dropped to 2.4% (about €30.6 million). As of the end of September, the figure had already dropped to 1.4%, Brunello Cucinelli claims.

"Our business in Russia is like a candle that is burning out," Luca Lisandroni, the company's co-general manager, said in a call with analysts, Bloomberg writes. According to the top manager, deliveries to the country decreased by 52% between 2021 and 2024.

The company said in late September that it would consider legal action to protect its reputation after an internal review.

Shares of Cucinelli at the trading in Milan on October 2 rose more than 4% at the moment, but then the pace slowed down to about 1.4%. At the peak of the day, the stock was 13% more expensive than at the close on September 26 - after a two-day collapse of 19% due to the attack of shorts. But they have not yet fully recovered from the effects of the attack.

Following reports alleging Brunello Cucinelli's continued operations in Russia, Oddo BHF downgraded Brunello Cucinelli from Outperform (Buy recommendation) to Neutral and lowered its target price on the stock from €120 to €83. His estimate implies a nearly 9% drop in the stock from the closing level on October 1.

On the same day, analysts at UBS, although recognizing the potential reputational risks associated with Brunello Cucinelli's operations in Russia, reiterated their Buy rating and target share price of €123. Their assessment, on the contrary, suggests a 35% rise in the stock from the October 1 close.

The majority of analysts (8 out of 15) tracking Brunello Cucinelli stock have a Buy rating (Buy and Outperform). Six hold a neutral stance with a Hold rating and only one analyst recommends selling the stock.

Morpheus, which includes former Hindenburg Research employees, said its two-month investigation showed: Cucinelli continues to operate stores in Russia despite the closure announcements. The sale of luxury goods more expensive than €300 to Russia was banned by the European Union in 2022 as part of sanctions. Also, the company, according to Morpheus, is excessively cutting prices to sell off excess inventory.

This article was AI-translated and verified by a human editor