Earnings call transcript: Prada Q3 2025 sees strong brand growth

Prada Group reported solid financial performance in its Q3 2025 earnings call, highlighting significant growth in retail sales and brand strength, particularly for Miu Miu. The company achieved total net revenues of €4.1 billion for the first nine months, marking a 9% increase at constant exchange rates. With an impressive gross profit margin of 80% and market capitalization of $15.2 billion, Prada’s strategic focus on brand expansion and innovation has bolstered its market position. According to InvestingPro analysis, the company currently appears undervalued based on its Fair Value calculations.

Key Takeaways

• Total net revenues reached €4.1 billion, a 9% increase at constant FX.
• Retail sales grew by 8% in Q3, with wholesale sales up 19%.
• Miu Miu brand surged by 41% in the first nine months.
• Asia Pacific and Americas markets showed strong double-digit growth.

Company Performance

Prada’s Q3 2025 performance underscores the group’s resilience amid challenging market conditions. The company reported a robust 8% increase in retail sales during the quarter, driven by strategic store expansions and successful product launches. Miu Miu’s exceptional 41% growth over nine months highlights the brand’s increasing contribution to Prada’s overall portfolio, rising from 25% to 32%.

Financial Highlights

• Revenue: €4.1 billion for the first nine months (+9% at constant FX).
• Retail sales: +8% in Q3.
• Wholesale sales: +19% in Q3.
• Royalties: +11%, supported by eyewear and beauty products.

Outlook & Guidance

Trading at a P/E ratio of 15.6x and maintaining a healthy current ratio of 1.45, Prada remains cautiously optimistic about market stabilization and continues to invest in creativity and brand desirability. The company expects like-for-like growth to account for 80-85% of its future expansion, with a focus on flagship stores offering enhanced customer experiences. Prada is also closely monitoring industry shifts, particularly changes in creative leadership across multiple brands. For detailed valuation analysis and future growth projections, investors can access Prada’s comprehensive Pro Research Report on InvestingPro, part of the platform’s coverage of 1,400+ top stocks.

Executive Commentary

Andrea Guerra, Group CEO, emphasized the company’s strategic patience and investment in organizational capabilities. "We are living in a new normal, and we are living on a plateau," Guerra noted, reinforcing Prada’s commitment to long-term growth and market adaptation. He added, "Luxury is patience," highlighting the brand’s enduring focus on quality and authenticity.

Risks and Challenges

• Currency fluctuations: Continued impact on revenue due to exchange rate volatility.
• Supply chain disruptions: Potential challenges in maintaining inventory levels.
• Market saturation: Risk of slowing growth in mature markets.
• Competitive pressures: Need to differentiate amidst increasing competition.
• Economic uncertainties: Global economic conditions may affect consumer spending.

Q&A

During the earnings call, analysts inquired about Prada’s performance in China, which is showing signs of plateauing. However, holiday periods exceeded expectations, providing a positive outlook. The company also discussed potential store portfolio optimization and ongoing collaborations with L’Oréal in the beauty segment.

Prada’s Q3 2025 results reflect a strong strategic direction and robust brand performance, positioning the company well for future growth despite external challenges.

Full transcript - Prada SpA (1913) Q3 2025:

Conference Operator: Today, and thank you for standing by. Welcome to the Prada Group nine month 2025 revenue update presentation. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, please press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be aware that we’ll take and answer one question at a time before moving to the next question. Please also note that today’s conference is being recorded. I would now like to turn the conference over to Mr. Andrea Bonini, CFO. Please go ahead, sir.

Andrea Bonini, CFO, Prada Group: Good afternoon, everyone, and thank you for joining the Prada Group’s nine month 2025 revenue update. With me today is our Group CEO, Andrea Guerra. We will start with some remarks and then move to Q&A. Before we start, please be reminded that during today’s call, we may discuss forward-looking statements which are subject to risks, uncertainties, and factors beyond our control, and the actual outcome and returns may differ materially from such statements. Please refer to the disclaimer included in slide two of our presentation. With that, I will hand over to Andrea Guerra.

Andrea Guerra, Group CEO, Prada Group: Thank you.

Thank you.

You’re right, Andrea.

Buongiorno and thank you to all, to be with us today. As we stated in our press release, our performance has been solid, has been on the same pace of the year, also comparing with very different comps and tough comps of last year, and with some precious improvements that we will talk about. We all know by now, hopefully, that we’re all working in a different world and a different industry. To continue with this rhythm, after two years of the beginning of this new world, it means that we have been able to attract and please, with our brands and products, our clients.

Considering the extent and duration of our like-for-like improvement during so many quarters, now it means that all the work we have been able to do so far, all the effort, all the commitment that we have put on our people, organization, and retail excellence is finally beginning to really pay off. We are happy about this. Prada, Prada performance, I would define it resilient with a twist. That is, we have seen a negative sign in the second part of your Q2, as we all remember, and in the very initial part of Q3. We have been observing a slow and continuous and steady improvement of product results. Obviously, not helped by traffic. I would say that traffic is normalizing, is leveling off, but really reaping benefits from all the work done on retail activities, brands, products, together with our people in the stores across the world.

We have seen an improvement, Prada. On the other side, Miu Miu was really against an impossible quarter. If I recall well, it was basically plus 100% on 2023. We obtained another solid quarter. What is good and nice to observe about Miu Miu is that our attitudes, behaviors, are growing with the dimension of the brand. I think it has to be stated that the growth of Miu Miu has been very well balanced between price points, in the price mix volume, across the different product categories, and throughout all regions. This is why I’m saying that the journey is continuing pretty solid. Having said this, I will pass the word to Andrea to give you some more details on our number and performance.

Andrea Bonini, CFO, Prada Group: Thank you, Andrea. Starting with net revenues by channel. In total, the group recorded net revenues of €4.1 billion in the first nine months of the year, up 9% against the same period last year at constant FX and effects. The performance was driven by high-quality retail growth sustained by like-for-like, full-price sales, and limited contribution from space. The third quarter confirmed a consistent and solid growth trajectory, with retail sales up 8% against the same comparatives in the prior year period. As a reminder, in 2024, retail channel growth was remarkably consistent at +18% in all quarters. Wholesale was up 4% in the first nine months and up 19% in Q3. The channel was impacted by some degree of phasing in Q2/Q3, but our strategy remains unchanged as we maintain a selective approach with independence.

Royalties continued to grow, up 11% over the periods, supported by both eyewear and beauty. Exchange rates had a negative impact on group revenue of circa 260 basis points during the first nine months and 470 basis points over the quarter. The impact is expected to be even more meaningful in Q4. Turning to the next slide, the retail sales by brand. All our brands continue to show healthy trajectories. Prada delivered a resilient performance, -2% in the nine months, with the third quarter edging closer to flat, supported by all key regions. Miu Miu reported sustained growth throughout the period at +41% and +29% in the quarter, with widespread appreciation across all regions and categories, as Andrea mentioned. As a result, the brand contribution to the group retail sales increased to 32% against 25% in the same period of last year.

Church’s was also back in double-digit territory in the quarter. Moving to the next slide, retail sales by geography. Asia Pacific delivered double-digit growth over the first nine months at +10%. Growth was also up double-digit in Q3, with some sign of improvements in trends in mainland China extending into October. Positive performance in Europe, up 6% in the nine months. Trends were similar between Q2 and Q3, as local demand proved resilient and tourism softer. Good progression in the Americas, where retail sales were up 15% in the nine months, with Q3 at +20% in further sequential acceleration. Japan grew against exceptionally high tourism in 2024, delivering +3% over the nine months period. Q3 was down 1% but improving quarter on quarter, driven by solid local demand and increased traveler spending.

Lastly, the Middle East delivered a solid performance, up 21% in the nine months, with Q3 in moderation at 10% on high comps. With that, I will hand back to Andrea Guerra for some closing remarks.

Andrea Guerra, Group CEO, Prada Group: Gracias, Andrea. Now we’re entering in the usual holiday period, and not only. I think in the next three to six months, we will observe in our industry a lot of novelties, all these new entries, all these new products, shows, and news. We have shown our pace and rhythm so far. We are here yet very committed on our creative leadership. We are standing and being authentic to contemporary art, culture, and craft. We will continue in our solid journey. We will continue to invest in our creativity and desirability. We feel home in this new normal. We have started reaping fruits from all our investments on people, organization, processes, and retail. Our flexibility and velocity will obviously continue to be one of our primary characteristics. We have entered the usual Q4, where the last six weeks of the year become paramount.

In these four weeks of October, Prada is going to continue to improve. Miu Miu continues its journey and, obviously, its long-term normalization. We are happy so far. With this, gracias, we now turn the word to you. I will give back the word to the operator.

Conference Operator: Thank you, sir. As a reminder, to ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please be aware that we’ll take and answer one question at a time before moving to the next question. Thank you. We are now going to proceed with our first question. The questions come from Chiara Battistini from JPMorgan Chase & Co. Please ask your question.

Good afternoon. Thank you for taking my question. My first question is on Versace. Now that the deal has closed, I was wondering if you could share your initial take on your first priorities that you have identified, investment needed that you see, distribution strategy from here, any initial take you can share with us on the Versace integration, please. That’s my first question.

Andrea Guerra, Group CEO, Prada Group: Thank you for the news. The transaction is not closed. We’re still waiting for authorizations, hopefully in the next 15 days. It’s not closed.

Okay. My bad. I thought it was. Second question on Prada and the improvement you’ve seen, that you mentioned you’ve seen, through Q3. You mentioned briefly that this seems to have continued also in the first few weeks of October, if I got that right. Could you share in terms of current trading? Maybe if you can expand on current trading, what is driving that? Is that a comment on the broader environment, or is it really the company-specific initiatives that are supporting that ongoing improvement?

I am not observing very different things happening in the world now. What we have seen in the last three months is basically the same. That is, we have seen a kind of plateau in China. Holidays were better than what we expected, but I would keep the word plateau. What we had observed was that we had fewer Americans in Europe, and obviously, nowadays, are less influent on our performance in Europe. We obviously had noticed that after a strong tourism inflow in Japan, strong, it’s probably even small but huge. I think that the first half last year, the group realized something like plus 60% in Japan. What we have seen is a very strong work also by our Japanese team on local customers. I think we have been pretty resilient there. Now we’re seeing our normal journey and performance.

In the United States, I think on some part of it is Americans that have traveled the east less. On the other side, if you remember, we also talked about the fact that we didn’t do any big revolutions during these years. One that we did a little bit was in the United States, where we decided to be a little bit more aggressive in changing behaviors, attitudes, and culture. I think we had a great reaction by people that have been a long time with us. We had some new entries. I think that we are accelerating in North America. This is how I see it so far. Always, and I always will repeat, in Q4, October has very little meaning compared to the last six weeks of the year.

Indeed. Thank you. Maybe last question, just a clarification on the wholesale trends in Q3. It was a very good number. Anything exceptional in terms of timing of shipments?

Nothing.

You should not?

Nothing. I mean, it’s sometimes a little bit up, sometimes a little bit down, but there’s nothing.

Okay. Perfect. Thank you.

Thank you. Next question, please.

Conference Operator: We are now going to proceed with our next question. The questions come from the line of Chris Huang from UBS. Please ask your question.

Hello. Hi. Thanks for taking my questions. I have three, please. Starting with the first one, you’ve been historically very helpful in providing some color on the cluster trends for the key Prada brands. Could I please ask for some flavor as well when it comes to the Chinese, Americans, Europeans, and Japanese? That’s my first one.

Andrea Bonini, CFO, Prada Group: Okay. Hi, Chris. Andrea Bonini. All clusters were positive at group level in the nine months and Q3, including Chinese. Leaving aside Miu Miu, a Prada brand, the improvement quarter on quarter has been mainly driven by local transactions across all key regions, I would say. Tourism overall marginally better, and if you get into the specifics of the different clusters, again, only Prada brand. The Chinese, better quarter on quarter, but still negative. As I said, improvement driven by both locals and travelers. Europeans, flattish on the nine months. Q3 positive, and again, better quarter on quarter, driven by local demand. The North Americans was positive, low single digit in the nine months, improving in Q3, and sustained by domestic demand. On the Japanese, positive, low single digit in the nine months, improving again in Q3, supported mainly by very solid locals.

Okay. Perfect. That’s super helpful. The next one I have is actually space. I remember earlier in the year, we were talking about maybe in H2 this year, we start to see a little bit more space growth kick in. What’s your latest thinking around the store expansion when it comes to both Prada and Miu Miu? Shall we expect something to kick in in Q4, or is it mostly going to be in 2026?

Andrea Guerra, Group CEO, Prada Group: We have executed what we were thinking on Miu Miu. We have something like 10 or 12 stores more, and we have enlarged some square meters in another 8 to 10 stores. That execution, that plan, has moved as planned. On Prada, we have taken a more cautious journey. More cautious, I mean, we want to have stores in other great locations, but we want also to close stores that have got no meaning. Yes, we had a couple more, but in reality, in the next 12 months, probably even 24 months, with Prada, we will have 6, 7, 8 more, but probably 10 less or 12 less. We constantly, I think that our journey with Prada will continue to be a reshuffle. I think that there is an opportunity to be even more productive. I think that Prada is being more productive nowadays, even more productive going forward.

We keep on with our 80, 85% like-for-like and 10, 15% on new space or enlarged space.

Okay. Perfect. Lastly, our margins. I know this is a revenues call, but it’ll be very helpful to hear about what you’re thinking about the four-year margins. I think you’ve always stated the ambition of delivering a steady margin improvement, you know, into the midterm. Just looking at the growth profile, you managed to deliver in H1 and also so far Q3, and in light of the very tough comps in Q4, are you still expecting, on a four-year basis, margins to see some expansion, or shall we start to see a little bit of more investments into the year end, and hence putting some pressure on your margin development?

Andrea Bonini, CFO, Prada Group: Oh, nothing to add, to be honest. I mean, vis-à-vis what we said at H1, the only part of your comment, Chris, that I didn’t get is when you say, did you mention light comps in Q4? I don’t know if.

I know I said tough comps in Q4.

Tough. Sorry.

In light of the tough comps. Sorry.

Yes. No, because indeed, I mean, I was going to say, no, they were not light because, again, you know, 2024 for us was very consistent in terms of group growth because it was stable at +18%, with Prada higher in Q4 and Miu Miu moderating a little, but we’re still talking +84% in Q4 2024 for Miu Miu. Nothing to add on the margin front. I mean, so far, we are on track to deliver on what we always said. As Andrea mentioned earlier, Q4 from mid-November onward is really relevant, what happens then. Yes, we have a bit more of, in terms of phasing of advertising, communication is a bit more heavy. As I said, so far, nothing to highlight.

Okay. Perfect. Thank you so much.

Thank you. Next question, please.

Conference Operator: We are now going to proceed with our next question. The questions come from Edouard Aubin from Morgan Stanley. Please ask your question.

Hi, guys. Good afternoon. Andrea Bonini, just to follow up on the margin. Apologies, I know it’s, again, it’s a sales call. On the FX, your friends at Kering mentioned yesterday—I don’t know if you had time to listen to the call—about the headwinds. They quantified about €50 million for them on a net basis in H2. I’m not going to ask you to quantify anything, but how are you thinking about the FX headwind for H2 and a little bit of color in terms of 2026, to what extent it could be or not be an issue for you? That would be my first question.

Andrea Bonini, CFO, Prada Group: Hi, Ed. I would only say that for 2025, you know, the hedging strategies will do the job, so not so much an issue. 2026 may be clearly, I mean, may be a headwind. I think we all know also that the situation can be very volatile when it comes to FX. We shall see.

Okay. Understood. The next question, sorry, I don’t mean to allocate the question, but it’s more for Andrea Guerra. You’ve been asked, Andrea, over the past few months and the past few years about the industry, the price point, and the middle income being priced out or not. By raising prices quite aggressively, some of your competitors over the past five years have kind of provided oxygen for more aspirational brands to grow. In terms of your product offering, and I know you got the question in the past, I just wanted to get an update from you. To what extent does that represent an opportunity for you, for the Prada Group, to play with the mix and maybe launch a bit more accessible bags in leather goods? I know you guys have been relaunching in nylon, also the crochet bag and so on.

At £1,500 per bag for the crochet, people will debate if it’s accessible or not. On the leather goods, more specifically, when it comes to bags, could you comment on the pricing architecture and if you’re happy with what you have now?

Andrea Guerra, Group CEO, Prada Group: Obviously, the two brands are different. My philosophy is not changing. That is, on one side, we have to be very solid on our enterprise, which does not mean to reduce enterprise, but to keep it and to be credible on our enterprises. To have an offer there. I think that this is the first point. The second point, I always push our merchandising activities to be a little bit half people that are doing an architectural world and on the other side, people that are doing a more artistic world. We have constantly to work on the different price levels, on the different product segments, understand season by season how we can move from one to another, how we can insert some new products, and how can we move, let’s say, in the mid-level upwards.

There is a world where I think that we have been not serious enough and maybe not courageous enough sometimes, which is high price. We’re credible, and this is what we are proving ourselves. We had an exceptional last week in New York, presenting our high jewelry Color Vivant collection, and we had a success that somehow also surprised many of us, not all of us. The thing is, we have to be more bold. We have to be more serious because the consumer is ready for us at those price levels, and we have to deliver. I think that in terms of price and mix, I would give you this answer divided into three segments.

Okay. Wonderful. The last one for me, and apologies ’cause it’s a bit of a big-picture question on the sales call. I think investors would be really curious to have your views on the topic. The topic is, there is a bit of a debate in the fashion industry and amongst investors if kind of the fast so-called fashion pendulum is shifting away from kind of more minimalist to a bit more maximalist and a bit more color and a less understated and so on and so forth. You know, would be curious to have your views on that. I mean, obviously, it’s always difficult to assess these trends and to know when they start and for how long they could last. What’s your view on you guys are the fashion experts, so what’s your view on the topic?

I think the following. On one side, we have the shows, which are shows allowing people to express, people to deliver the future, people that are giving their sense of that moment. There is the world and life. The two have to be connected. The two sides have to be on tension. Nowadays, I would say that I don’t see major pendulums. What I think that is proving to be very correct and to prove to be very successful is people that are authentic to their history, to their cultural pillars, and to their creative hearts. This is what I see.

Okay. Understood. Thank you.

Andrea Bonini, CFO, Prada Group: Next question, please.

Conference Operator: We are now going to proceed with our next question. Another question from Charles Luis Scotti from Kepler Cheuvreux. Please ask your question.

Yes. Good afternoon. I have three questions, please. The first one, one of your competitors said that the e-commerce business is stabilizing, which is generally a good sign for the aspirational clientele. Do you also see a slight comeback from aspirational customers who have now reduced their luxury spendings over the past few years?

Andrea Guerra, Group CEO, Prada Group: It’s what I was saying at the beginning. We are living in a new normal, and we are living on a plateau. Let’s see from this plateau if we go upwards or again downwards, but it’s a plateau. It’s a plateau now of four, five, six months. If there are any signs, but I would call weak signals, I would consider them more positive than negative, but very weak signals.

Okay. Thank you very much. My second question, it seems that you have ambitions to build a larger multi-brand Italian conglomerate with the acquisition of Versace. An iconic brand could change hands in the coming months. I know you haven’t been mentioned among the potential bidders, but would you be open to considering an offer if your beauty partner were to acquire Armani and seek a partner to manage the fashion division, a little bit like what Estée Lauder did with Denia on Tom Ford?

I don’t think time is coming up. I don’t think we were not invited, let’s say. We have always been looking to the world, looking to the brands, having great respect for that brand. I would not consider this question realistic today.

Okay. Thank you very much. Last question. I know it’s a bit premature because you have not closed the deal on Versace. I don’t know if you have access to the numbers, by the way, but if yes, could you tell us, also for modeling purposes and to assess the potential impact of the consolidation of the brand on your numbers, whether the brand current performance is in line with the latest target given by Capri. I think it was €800 million for fiscal year ending March 2026. How do you assess also the medium to long-term target that were previously set by Capri?

We have access to the same public figures you have. Be careful to not mess up dollars with euros because they’re reporting in dollars. Today, being an American comp.

Yes.

Okay.

Sure. Sorry.

We have the same access you have. We are competitors.

Okay.

Authorities are very precise on this.

Okay. You have no numbers to communicate?

No, we don’t. We are only, obviously, we will, but not today.

Okay. Perfect. Thank you very much.

Thank you.

Andrea Bonini, CFO, Prada Group: Next question, please.

Conference Operator: We are now going to proceed with our next question. The questions come from Chris Cao from CLSA. Please ask your question.

Hi, management. Thanks for taking my question. I have three. Firstly, as a quick follow-up on China’s sequential improvement. In the third-quarter reporting season, some of your peers highlighted the improvement in China is mainly on traffic and volume. I am just wondering if you also see the same trend or which of the retail metrics, in your view, is improving more. Is it foot traffic, is it conversion, or price or mix? Also, if there’s any categories that have been seeing more explicit improvement, is it related to wear or bags or accessories that’s been seeing more improvement? Thank you.

Andrea Guerra, Group CEO, Prada Group: We had given before an outlook, and what we have seen recently in China. I will repeat. On one side, we plateaued. On the other side, we have seen some good signs during holidays. This is what we stated before, and this is what I will repeat now. Holidays were a little bit better than what we expected. I think that the worst is over, but I don’t think that we will ever see again in the near future what we have seen in the last decade.

Thank you. The second question is regarding the acceleration on American clusters. Just wondering if there could be any highlights on if Prada core brand is improving more or if it’s Miu Miu brand that has been mainly driving the acceleration for Americas.

Always keep in mind that Miu Miu in the United States is marginal. Miu Miu is constantly increasing. I think that we are doing a good job with Miu Miu joining the brand to many different city and city clusters, even where we don’t have stores through omni-line projects. I think that we are really doing a good job there. The sequential improvement is obviously coming, specifically from Prada. I mean, both are growing, but Prada is big. It’s much bigger.

Okay, understand. Maybe also from a retail matrix perspective, what could be, you know, the main supporting on the Prada core brands recovering in the U.S.? Is it traffic, traffic, or it’s more coming from the price mix?

I mean, all my conversation on Prada was to allow you to understand where we are. I just said that traffic is not helping, that we are reaping the benefits of our retail investments, and that our product launches were good. This is what I’m saying. It’s a like-for-like growth. We had no real growth, but the improvement is all like-for-like, and hopefully, we will see positive results soon.

Thank you very much. Helpful.

It’s a pleasure.

I’m going to ask you the last question. Last question is regarding the development of other categories like jewelry. Right now, we see gold prices being going in a very good trend. We also know that Prada has been launching very good sustainable gold collections. Just wondering how the jewelry categories are performing. Thank you.

I will repeat. We just launched a new collection. The name is Color Vivant. We had a fantastic first week in New York, and now we will tour the most important cities in the next three, four months with this collection. We’re very proud of it. We’re really very proud of it. Thank you. Operator, thank you.

Conference Operator: Thank you. We are now going to proceed with our next question. The next questions come from Luca Giuseppe Solca from Sanford C. Bernstein & Co. Please ask your question.

Thank you very much for taking my question. Buongiorno, Andrea. My first question focuses on the very significant creative environment that we have now in the industry with more than 15 brands launching on the catwalk with new creative directors. There’s going to be a lot of new products hitting the stores, starting next year. Are you thinking about that? Are you sort of planning anything that could help you ensure your fair share of consumer attention? How are you at all thinking about the environment that could become more competitive?

Andrea Guerra, Group CEO, Prada Group: I think that this is what will happen. This is what I’m saying when I’m saying that the next six months will be a change. First of all, with all this can-can happening, I hope that we will also attract some traffic back. We will all be benefited by some more traffic, which I think we would all love. I think that much of this is also trying to help this industry to come back to be more desirable. Our fair share, I can tell you that during the shows, we had our fair share. I mean, we were not a novelty. We were not something new. We had our very similar fair share of contacts, gratitudes, happiness, and reactions to our shows. The first step of that was very positive. I think that we are very, very focused on the first six months of next year. Very, very focused.

Understood. Thank you, Andrea. My second question is on eyewear. Prada, the Prada Group, together with Armani, is one of the two cornerstones of the EssilorLuxottica licensed business. EssilorLuxottica has been very proactive in coming to the market with new products. I’m thinking about smart glasses. Are you planning to innovate with them? What do you foresee in this important license of yours?

What I can tell you is that Prada has always been on the forefront of innovation, and we will continue to be through all our partnership. Obviously, our partnership with Luxottica is paramount on this.

All right. I will take that as an endorsement that you’re about to do something new, possibly. My last question was on retail. Prada has been a pioneer in establishing high-profile flagship stores. I’m thinking of downtown New York or Monte Napoleone. Is it part and parcel of your strategy to potentially trim the long tail of stores and reduce the overall number of stores for the brand, also to beef up and build even more impressive and bigger stores in your flagship locations? Is that something that we need to take into account when thinking about your cost profile as far as supporting these stores is concerned?

I agree with you. This is our thinking. Before, I was saying that maybe a year ago, we were also considering some increased numbers of Prada. Today, I think there is a remix. Our long tail is too long. On the other side, the benefits we are having, especially nowadays where we are including so much hospitality, we are including privacy, we are including love, these bigger places are what we need. We are working on at least five or six projects. On the other side, we’re also working on trimming the long tail, as you were calling it.

Perfect. Grazie mille. Thank you very much indeed, Andrea.

Thank you. Thank you, operator. Grazie. Next question.

Conference Operator: We are now going to take our next question. The questions come from Thomas Vincent Chauvet from Citi. Please ask your question.

Good afternoon, Andrea. Andrea, thanks for taking my question. I have three. The first one on next year’s customer service.

Andrea Guerra, Group CEO, Prada Group: We don’t hear you. You’re very disturbed.

Is it better now?

Yes.

Apologies for that. Yes, sorry. Thanks for taking my question. I have three. The first one, I was looking at consensus next year where the market is expecting another year of slight EBIT margin pressure. I think 70, 80 bps. Andrea, you mentioned earlier the FX headwind on margins. Beyond that, it looks like the total OpEx next year is expected to grow at around 11, 12%. Likely to grow faster than sales. You talked about how your efforts are starting to pay off. I was trying to understand how you think about the major cost and CapEx plans for next year. You talked about retail earlier. Is there anything else that would justify another year of double-digit OpEx growth? That’s my first question.

Andrea Bonini, CFO, Prada Group: Hi, Thomas. I wouldn’t get into that now. I mean, let’s talk about 2026, you know, as we always do when we reported the full-year results. Also, you know, consensus at the moment, I believe, may be not entirely accurate due to the fact that some may already have included Versace. Some others may have not. Let’s, as I said, push this discussion to later. Let me reiterate again that, you know, vis-à-vis what we always said in terms of priorities, but also how we wanna handle our profitability, nothing new to report.

Thank you, Andrea. My second question on the Prada brand retail performance, and any color you could provide on, qualitatively, perhaps, on full-price stores versus outlets at the time aspirational consumer seem to be coming back in some geographies with the traffic improvement. Is that benefiting maybe a bit more your full-price stores? Any color on that would be useful.

The color I would give is that outlet for us has remained a bit of a drag. When we look at the retail overall performance, yes, bear in mind that full price is above the total number because you know the path that we took on outlets, and that has been continuing.

Thank you. Finally, on beauty, I think earlier this week, L’Oréal CEO said Prada had reached over €500 million in beauty sales only in four years, I think, after you began the partnership. I think it was 2021. How much bigger do you see the opportunity there considering Nicola Iannoni also said that Saint Laurent was achieving nearly €3 billion of sales, so six times more than Prada for a fashion brand, which is quite smaller than the Prada brand. It would be very helpful within the royalty line. You had €100 million in nine months, a very good number. I guess maybe €130 million annualized. Could you give us a very rough idea of the revenue split of that royalty stream between beauty and eyewear? I know eyewear is the majority, but what kind of majority, please? Thank you.

Andrea Guerra, Group CEO, Prada Group: The beauty market is obviously much, much bigger than the eyewear market. We have come to the beauty market probably as last. We’re gaining huge ground. The launch of Prada, the new men’s fragrance in August, September, has been a real hit and a real success. We’re very happy of the partnership with L’Oréal. You should have asked the question to them if they see us larger than Saint Laurent in the long term or not. Having said that, we are constantly growing. We are not in a hurry. Luxury is patience. We love the work we’re doing together. I think that we have a long journey of growth together. During Q3, I think we also launched the first Miu Miu fragrance. Even that was a Miu Miu team. Even that was a great success.

The only thing I can say is we are very happy of the partnership with L’Oréal.

The split, perhaps, Andrea Bonini, anything you can share? Is it 80/20, 75/25 ballpark between eyewear and beauty, or it’s something you don’t wanna share?

Andrea Bonini, CFO, Prada Group: No, it’s not something that we disclose. As you said, eyewear is a bit bigger, for sure.

Okay, only a bit bigger. Okay.

Thank you. Next.

Thank you.

Thank you, Operator.

Conference Operator: We are now going to proceed with our next question. The questions come from the line of Oriana Cardani, Intesa Sanpaolo. Please ask your question.

Yes. Good afternoon. Thank you for taking my questions. I’ve got two ones. The first one is on pricing policy for next year. Do you expect the pricing increase in 2026 to be lower than in 2025 or similar? Do you plan differences among regions?

Andrea Guerra, Group CEO, Prada Group: We have kept a kind of method, a rule, with two moments of the year where we do a kind of maintenance on prices and maintenance of differences between regions. I think we will keep on doing similar things in 2026.

Thank you. My second question is on the growth by category in Q3. Which product categories grew the most in the quarter for Prada and Miu Miu? Thank you.

On Miu Miu, the category which has grown the most, as I was saying before, we had a very balanced growth of product categories across the world and across products. I wouldn’t argue too much. I would continue saying that, obviously, ready-to-wear is the cornerstone of Miu Miu. Similar on Prada, where we have seen an acceleration on leather goods. I think that this is the most important thing we have seen. Great resilience on the rest. We have seen a good growth and an acceleration on leather goods.

Understood. Thank you very much.

Operator, thank you.

Conference Operator: Thank you. We are now going to proceed with our next question. The questions come from Lihui Hew from Citi. Please ask your question.

Good afternoon, Andrea and Andrea. I have only one question. Building on what you said, Mr. Guerra, China might not have as fast a growth as before. That’s my understanding, with plateau. With that judgment, I wonder about Prada Group’s future commitment to China, especially when the new generation comes in. More specifically, maybe I want to understand our license or lease agreement with Rongzhai. I’ve read about it. We have signed a 10-year agreement in 2011. I wonder, have we extended that? Are we going to continue to invest heavily in China, going forward? Thank you.

Andrea Guerra, Group CEO, Prada Group: You know, China is relevant. China has been always progressing and evolving during the last 15 years. It’s not a 12 or 18 or 24 months that make your strategic plans change. Obviously, some CapEx may have been diluted, but nothing special. Rongzhai, our 17th-century building in Shanghai, has become, for Prada, it is, and it’s becoming every day more our place, our epicenter. I would suggest every one of you, when you are in Shanghai, to go to the Prada café, to the Michelin café in Rongzhai. I would rate it the most beautiful café in the world.

Thank you very much.

Thank you, operator.

Conference Operator: Thank you. This concludes the question and answer session. I will now hand back to you for closing remarks.

Okay.

Andrea Guerra, Group CEO, Prada Group: Grazie. Arrivederci.

Conference Operator: This concludes today’s conference call. Thank you all for participating. You may now disconnect your lines. Thank you and have a good day.

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