MILAN (Reuters) -Italian fashion house Giorgio Armani said on Wednesday its core profit dropped 24% last year hit by declining revenues and a slight increase in operating costs.

The unlisted Milanese group said it retained a long-term approach in the face of the difficulties facing the luxury industry, which is wrestling with slower demand in China and the United States, where recession concerns are rising.

"I am convinced that pursuing consistency and continuity and avoiding the pursuit of immediate gains is the best strategy to ensure long-term success," Chairman and CEO Giorgio Armani said in a statement.

"Thanks to this approach, in an increasingly complex and competitive global environment, I am proud to say that we have maintained the group's independence and stability," he added.

Chief Commercial Officer Giuseppe Marsocci said the group had opted for price increases below the inflation rate.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) at the Milan-based group fell to 398 million euros ($468 million) in 2024.

Net revenues were down 5% at constant exchange rates, to 2.3 billion euros. Europe is the main market for the group, accounting for 49% of total net revenues.

Giorgio Armani, 90, last month missed one of his catwalk events for the first time in his career when he failed to attend his group's two shows at Milan's Men's Fashion Week, as he was recovering at home after an illness.

The group had 570 million euros in net cash at the end of last year after stepping up investments.

The Armani group said it had used part of its cash reserves last year to fund 332 million euros in investments, double the 2023 level and three times the average of recent years, to renovate some flagship stores and bring in house the management of its e-commerce operations.($1 = 0.8504 euros)

(Reporting by Elisa Anzolin; Editing by Valentina Za)