Core Viewpoint - The controversy surrounding Prada's new leather sandals, which are criticized for resembling traditional Indian Kolhapuri sandals, highlights issues of cultural appropriation and the protection of traditional craftsmanship [1][2]. Group 1: Product and Design - Prada launched a new leather sandal during the Milan Fashion Week as part of its Spring/Summer 2026 menswear collection, which has been accused of closely resembling the Kolhapuri sandals from India [1]. - The Kolhapuri sandals are handmade and typically priced around $10, while Prada's version retails for $1,200, raising concerns about the appropriation of traditional designs for commercial gain [1]. Group 2: Cultural Response - Indian artisans and cultural observers have expressed outrage, claiming that Prada's design constitutes "cultural appropriation" and a theft of their traditional craftsmanship [2]. - A delegation of artisans from Maharashtra has met with local government officials to demand action to protect their rights and hold Prada accountable for the alleged design theft [2]. Group 3: Legal and Ethical Considerations - Despite the Kolhapuri sandals receiving geographical indication (GI) certification in India, which protects the name and production methods within the country, this protection does not extend globally, allowing foreign brands to draw inspiration without facing legal consequences [2]. - Legal experts indicate that unless Prada explicitly uses the term "Kolhapuri," it would be challenging to prevent similar incidents through international law [2].

Core Viewpoint - Prada's CEO Gianfranco D'Attis will leave the company by the end of the month, with Andrea Guerra temporarily taking over, amid a challenging luxury market environment and internal brand performance disparities [1][2]. Group 1: Management Changes - Gianfranco D'Attis, the first non-family CEO of Prada, is departing the company, which raises speculation about his future due to his absence from the Milan men's fashion show [1]. - Andrea Guerra, the CEO of the Prada Group, will temporarily assume the role of brand CEO following D'Attis's departure [1]. - The management changes come as several luxury brands, including Kering and LVMH, are also adjusting their leadership amid market pressures [1]. Group 2: Financial Performance - Prada's revenue growth for 2024 is only 4%, with Q1 2025 showing zero growth, falling short of market expectations [2]. - In contrast, Miu Miu, a brand under the same group, saw retail sales surge by 93% in 2024 and continued to grow by 60% in Q1 2025 [2]. - The sales growth rates for Prada from 2021 to 2024 have decreased significantly, from 44% to 4%, while Miu Miu's growth rates have increased dramatically [2]. Group 3: Strategic Acquisitions - The recent acquisition of Versace for €1.25 billion is a significant move for the Prada Group, aimed at expanding its brand portfolio [3]. - Analysts express concerns that while the acquisition may benefit Prada in the long term, it could pose short-term challenges and require careful management [3]. - The integration of Versace is seen as a test of Prada's capabilities, necessitating sufficient funding and management focus [3]. Group 4: Market Outlook - The global luxury goods market is entering a phase of low growth, with projections indicating annual sales growth of only 2%-4% from 2025 to 2027 [4]. - The overall market environment is expected to improve slightly in 2025, with total sales growth potentially remaining under 4% [4]. - The current market conditions present opportunities for acquiring quality assets at lower prices, which could benefit companies like Prada [5].

Group 1 - Local consumption stocks in Hong Kong experienced a significant rise, with Chow Tai Fook (01929.HK) increasing by over 6% [1] - Chow Sang Sang (00116.HK) saw a rise of 2.7% [1] - Prada (01913.HK) rose by over 2% [1] - Sa Sa International (00178.HK) increased by 1.6% [1]

Q1-25 Revenue Milan, April 30th 2025 0 April 30th 2025 Disclaimer The information contained in this document is for information purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities, or other products or to provide any investment advice or service of any kind. This document is not directed at, and is not intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution or use wo ...

Financial Data and Key Metrics Changes - The Group recorded net revenues of EUR 1.34 billion in the first quarter, up 13% at constant exchange rates compared to the same period last year [9] - Retail sales reached EUR 1.22 billion, also up 13% at constant FX, driven by like-for-like and full-price sales [9] - Wholesale sales increased by 7% year-on-year, while royalties delivered a 13% growth, supported by eyewear and fragrances [10] Business Line Data and Key Metrics Changes - Prada brand's retail sales remained stable against high comparisons from the previous year, while Miu Miu experienced a remarkable growth of 60% at constant FX, increasing its contribution to Group retail sales from 22% to 31% [11][10] - Leather goods were highlighted as one of the fastest-growing categories, particularly for Miu Miu, with significant success in the first three months [29][30] Market Data and Key Metrics Changes - Asia Pacific sales were up 10% at constant FX, Europe increased by 14%, the Americas grew by 10%, and Japan saw an 18% rise, with the Middle East delivering the best performance at 26% [12] - The Chinese market showed volatility, with local transactions negatively impacting performance, while traveler transactions remained positive [20] Company Strategy and Development Direction - The company aims to build Prada's desirability and product innovation to maintain positive growth despite challenging market conditions [4] - Miu Miu's expansion in the U.S. is a focus, with plans for further store openings and refurbishments to enhance brand presence [35] Management's Comments on Operating Environment and Future Outlook - Management noted that the market remains complicated, with regular trends and some differences across regions, but expressed optimism about maintaining positive growth [14] - The company is not expecting significant changes in consumer behavior in the short term but hopes for gradual improvements in local demand, particularly in China [68] Other Important Information - The company is observing pricing strategies closely, considering potential impacts from tariffs and currency fluctuations, with a maintenance pricing strategy of 2-4% every six months [41] - The online channel for both brands has seen growth, particularly in North America, contributing to 8-10% of total revenue [59] Q&A Session Summary Question: Trends by nationality and product brand EBITDA - Management noted volatility in the Chinese cluster, with a return to negative performance in Q1 compared to a strong Q4 [20] Question: Changes in American consumer behavior and future acceleration - Management indicated that the U.S. market remains unstable, with ongoing investments aimed at improving performance [23] Question: Drivers of leather goods growth - Miu Miu's leather goods category showed strong performance, with a mix of iconic and new products driving success [30] Question: Update on store expansion plans - The company confirmed ongoing plans for store expansions, particularly for Miu Miu in North America, with a successful refurbishment of the Soho store [35] Question: Pricing strategy in light of tariffs - Management stated that maintenance pricing increases would likely be sufficient to offset potential tariffs, but consumer confidence remains a concern [50] Question: Overlap between Prada and Miu Miu customer demographics - Management emphasized that both brands are managed independently, with no intentional overlap in customer targeting [54] Question: Profitability outlook and seasonality - Management indicated that growth remains the priority, with a focus on maintaining moderate margin expansion [58] Question: Performance of online channels - Online sales have grown slightly in North America, maintaining a consistent contribution to total revenue [59] Question: Competitive landscape and new product cycles - Management acknowledged the reshuffling in the luxury industry and expressed confidence in gaining market share through stability and creativity [65] Question: Investments in China and local demand outlook - Management remains positive about long-term prospects in China, with expectations for easier comparisons in the second half of the year [68]

Core Viewpoint - Prada's first-quarter net revenue reached €1.34 billion, reflecting a year-on-year growth of 13%, surpassing market expectations of €1.33 billion [1] Group 1 - The company's net revenue for the first quarter was €1.34 billion [1] - Year-on-year growth in revenue was reported at 13% [1] - Market expectations for revenue were set at €1.33 billion, indicating a slight outperformance by the company [1]

Financial Performance - Prada Group reported a net revenue of €1,341.3 million for the three months ending March 31, 2025, representing a 12.5% increase compared to the same period in 2024[2]. - Retail sales net revenue increased by 13.0% year-over-year, accounting for 90.6% of total net revenue[5]. - The total net revenue for retail sales was €1,215.8 million, reflecting a 13.5% increase[4]. Retail Sales Growth - Miu Miu's retail sales net revenue surged by 60.2%, while Prada's remained stable with a slight increase of 0.1%[4]. - The Asia-Pacific region saw a retail sales net revenue increase of 9.6%, Europe increased by 14.3%, and the Middle East recorded a robust growth of 26.5%[4]. - Japan's retail sales net revenue increased by 18.0%, supported by strong local demand and positive tourism numbers[9]. - Church's retail sales net revenue recorded a year-over-year growth of 1.8%[7]. Store Operations - The company opened 4 new stores and closed 2, bringing the total number of stores to 611 as of March 31, 2025[5]. Wholesale and Licensing Revenue - Wholesale sales net revenue grew by 6.9% year-over-year, aligning with the company's strategic goals[5]. - Licensing revenue increased by 14.7%, driven by contributions from eyewear and fragrances[5].

Core Viewpoint - The global luxury goods market is facing significant challenges due to the impact of tariffs imposed by the Trump administration, leading to a decline in stock values and overall market performance [1][7]. Group 1: Market Performance - Goldman Sachs' luxury goods stock index has lost over $200 billion since its peak in February, marking a 12% decline this year, potentially the worst annual performance since 2018 [1]. - Prada's stock fell nearly 9% to HKD 44.65, with a total market capitalization of HKD 119.625 billion, reflecting a cumulative drop of over 32% since late February [1][2]. Group 2: Acquisition Details - Prada announced its largest acquisition in its 112-year history, planning to purchase Versace for $1.375 billion (approximately RMB 10.057 billion), with the deal expected to close in the second half of 2025 [2][5]. - Following the acquisition, Versace will operate as a subsidiary of Prada, despite facing significant financial challenges [2][5]. Group 3: Financial Performance - For the fiscal year 2024, Prada reported revenues of €5.432 billion, a 17% increase year-on-year, and a net profit of €839 million, up 25% [3]. - In contrast, Versace's revenue for the fiscal year 2024 was $1.03 billion, a decline of 6.9%, with a profit margin of only 0.4% [4]. Group 4: Market Outlook - The luxury goods market is experiencing pessimism, with analysts predicting only a 2% to 5% annual growth in global luxury sales from 2025 to 2027 [9]. - Bernstein has revised its 2025 global luxury growth forecast down from 5% to a decrease of 2% due to the adverse effects of tariffs and economic uncertainty [10].

Group 1: Regulatory Developments - The National Medical Products Administration (NMPA) has released the "Management Measures for Safety Risk Monitoring and Evaluation of Cosmetics," effective from August 1, 2025, aimed at enhancing the supervision and management of cosmetics [1] - The measures consist of six chapters and thirty-three articles, clarifying the responsibilities of the NMPA, the National Institute for Food and Drug Control, and various drug supervision departments [1] - The focus includes monitoring substances that may harm human health when added to cosmetics, particularly those harmful to vulnerable groups such as children [1] Group 2: Corporate Acquisitions - Anta Group announced a cash acquisition of the German outdoor brand Jack Wolfskin for $290 million, expected to be completed by the end of Q2 or early Q3 of 2025 [2] - The acquisition aims to extend Anta's outdoor brand portfolio from high-end to a broader consumer base, enhancing its market position in the outdoor segment [2] - Prada plans to acquire the Italian fashion brand Versace for $1.375 billion, with Versace becoming a wholly-owned subsidiary while retaining its creative team [2] - The merger signifies a strategic move for traditional luxury brands to compete against giants like LVMH [2]

Core Viewpoint - Goldman Sachs reported that Prada announced the acquisition of Versace, with the deal expected to be completed in the second half of 2025, pending regulatory approvals [1][2] Group 1: Acquisition Details - Prada will acquire 100% of Versace from Capri Holdings for an enterprise value of €1.25 billion, which may be adjusted upon completion of the transaction [1] - The acquisition price corresponds to an enterprise value-to-sales ratio of 1.7x based on a projected enterprise value of $1.375 billion and estimated revenue of $810 million for the fiscal year ending March 2025 [1] - To finance the acquisition, Prada plans to raise €1.5 billion in new debt, including €1 billion in term loans and €500 million in bridge loans [1] Group 2: Financial Projections - For the fiscal year ending March 2025, Versace is expected to achieve sales of €810 million, with an estimated EBIT margin projected to be negative [2] - Versace is anticipated to contribute 13% to Prada's total revenue in the fiscal year 2024, with Prada's overall EBIT margin expected to decline from 23.6% to approximately 20% [2] - The acquisition aims to leverage Versace's brand potential and distinctive aesthetic, with expectations of further development through scale efficiencies within 24 to 48 months [2]