Core Viewpoint - Prada's retail sales for Q3 2025 met market expectations, showing a year-on-year growth of 7.6% at constant exchange rates, with the Prada and Miu Miu brands performing in line with expectations [1] Sales Performance - Prada's retail sales decreased by 0.8% year-on-year, while Miu Miu's sales increased by 29% year-on-year [1] - Over a two-year period, both brands demonstrated stable quarterly performance, with Prada's core brand showing a year-on-year growth of 1% in both Q2 and Q3 of this year, and Miu Miu showing significant growth of 136% and 134% respectively [1] Market Insights - The Chinese market for Prada's core brand is still experiencing negative growth, but there has been a quarter-on-quarter improvement in Q3 [1] - Positive growth was observed in the Americas, Europe, and Japan, driven by strong local demand and slightly improved tourism demand [1] - Management believes that the worst period in China has passed, and sales have continued to improve since October [1] Future Outlook - The management cautioned that the fourth quarter will be challenging due to tough comparisons, and the last six weeks of the year will be crucial for performance [1]

Group 1 - Morgan Stanley reported that Prada's sales in Q3 increased by 8.5% at constant exchange rates, slightly above market consensus, with retail sales growth of 7.6% aligning with expectations, driven primarily by the volatile wholesale channel [1] - Prada remains one of the fastest-growing groups, with growth rates nearly comparable to Hermès, significantly outpacing French luxury giants LVMH and Kering [1] - Morgan Stanley has lowered its earnings per share forecast for Prada for FY2025-2026 by 0.6% but maintains a target price of HKD 53, while keeping a "market perform" rating due to observed investment opportunities in the luxury sector [1] Group 2 - Market reaction to Prada's results is expected to be muted, as the company's revenue barely meets market expectations, leading to a forecast of price range fluctuations in the coming days or months [1] - Three main concerns are highlighted: increased competition in the creative field with the influx of new creative directors, potential loss of Miu Miu's competitive edge as a brand that has innovated and provided differentiated products [1] - A shift in fashion trends from minimalism to maximalism may disadvantage both Prada and Miu Miu, as more elaborate brands like Gucci gain popularity [1] Group 3 - The acquisition of Versace is projected to dilute the group's profit margins for at least the next few years, with estimated operating losses of EUR 150 million in FY2026 and EUR 120 million in FY2027, indicating minimal profit growth for the group [2] - Morgan Stanley has revised its revenue growth forecast for the group in 2025 down to 6.6% from an original 8.5%, while maintaining an EBITDA margin of 23.4% [2] - By brand, Prada's revenue is expected to decline by 1.3% year-on-year in Q4, while Miu Miu's revenue growth forecast is slightly adjusted down to 30% [2]

Core Viewpoint - Prada's stock opened over 3% higher following the release of its financial results, indicating positive market sentiment towards the company's performance [1] Financial Performance - For the nine months ending September 30, 2025, Prada Group reported a net revenue of €4.07 billion, representing a 9% year-over-year increase at constant exchange rates [1] - Retail sales net revenue also increased by 9% year-over-year at constant exchange rates [1] - Prada's retail sales net revenue decreased by 2% year-over-year at constant exchange rates, while Miu Miu's retail sales net revenue surged by 41% [1] Regional Performance - All regions reported growth in retail sales net revenue at constant exchange rates compared to the same period in 2024: - Middle East: +21% - Americas: +15% - Asia-Pacific: +10% - Europe: +6% - Japan: +3% [1]