The Italian luxury brand surprised with high sales. What makes it stand out in the market?

Italian house Brunello Cucinelli reported a rise in sales in the first half of the year, beating analysts' expectations. The company's ultra-wealthy customers continue to make purchases despite concerns about duties from the United States, CNBC commented on these results. The brand plans to raise prices and maintain a strong pace even in a challenging macroeconomic environment. Analysts consider it resilient to risks, but warn: for the entire luxury market, the threat of trade barriers and a downturn in demand remains.

Italian premium clothing brand Brunello Cucinelli reported a 10.7% rise in first-half sales, thanks to demand for its $2,000 cashmere sweaters and "quiet luxury" aesthetic, wrote CNBC. The company's preliminary second-quarter revenue reached €342.6 million, while Jefferies analysts were expecting €341.4 million. They called the result "the best in the industry."

The luxury retailer also celebrated a strong start to July, confirming its forecast for sales growth of around 10% this year and next.

This shows that Brunello's ultra-wealthy consumers are ignoring the threats posed by the imposition of U.S. duties, while lower-status luxury brands are losing ground, CNBC noted. The Italian fashion house has so far demonstrated an ability to pass on costs to consumers even in difficult times, the channel wrote.

Brunello said it plans to raise prices in the U.S. by about 3-4% in the second half of the year in response to the imposition of import duties, while the company has already raised prices by 3-3.5% in the first half of the year, according to Jefferies;

The luxury sector is expected to be hit hard by U.S. import duties, given its reliance on localized, niche production. The companies themselves cite possible macroeconomic instability and weakening consumer sentiment as the main reasons for concern, CNBC lists. At the same time, the channel notes that other luxury brands may not be able to repeat the tactic of offsetting costs at the expense of consumers;

"[Brunello Cucinelli] looks much better than competitors amid downside margin risks across the sector," UBS analysts wrote Friday.

RBC Capital Markets agrees that the Italian retailer's sales momentum shows the company's resilience and momentum, outperforming the industry.

Data from Brunello provides a preview of the outlook for the luxury sector amid the upcoming second-quarter reporting season, which begins next week with the release of results from Richemont, owner of the Cartier brand. However, analysts doubt that the entire sector will show similar growth, as the duties could negatively affect consumer spending, even in the premium segment;

Shares of European luxury brands fell on Friday, July 11, along with the entire market - in anticipation of the statement of U.S. President Donald Trump, who promised to announce the size of duties on European goods. Quotes Brunello Cucinelli fell by 0.8%, Hermes - by 1.5, LVMH - by 3%. The securities of Kering, which owns Gucci, collapsed by almost 4%. Moncler and Richemont also fell in price.

At the same time, since the beginning of the year, only Brunello, whose value increased by 2.7%, Hermes - its shares rose by 4.9%, and Richemont, which rose in price by almost 8%.

Analysts are moderately optimistic about Brunello's stock outlook: he has nine hold recommendations in his portfolio and eight buy recommendations, showsWSJ. One analyst gave a sell recommendation. 

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