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Good day, and thank you for standing by. Welcome to Prada Group Q1 2026 Revenue Update. At this time, all participants in a listen-only mode. [Operator Instructions] And please note that today's conference is being recorded.

I would now like to turn the conference over to Mr. Andrea Bonini, Group CFO. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining the Prada Group's First Quarter 2026 Revenue Update. With me today is our Group CEO, Andrea Guerra. And as always, we will start with the presentation 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 disclaimers included on Slide 2 of our presentation. And with that, I will hand over to Andrea Guerra.

Hello, everyone. Nice meeting you all. We met a couple of months ago. And I would say that the world is constantly giving us new surprises and we are certainly living through a prolonged challenging and unique period for our business, for the industry and for the world. Having said so, I think that Q1 was our toughest quarter in terms of comparables. And I always would love to remind that Q1 2025 was plus 13% on 2024.

So we are really pleased to report another organic positive quarter for both Prada and Miu Miu. I think that this was a very challenging quarter considering the comps, considering what is happening in the world and considering the fact that basically 50% of creative directors of major brands change, and this was the first season of their products in the market.

Middle East is an issue. As I always remind everyone is, first of all, a territory full of great our people, great stakeholders, great allies in the business, and we would love to see it as fast as we can back to great beauty.

So the impact on Q1, always keep in mind that basically, it was the worst moment, but only basically 1 month was approximately 150 basis points on our growth, a little bit less on Prada around 100 basis points, much more on Miu Miu close to 250 basis points. So this is just the underlying and the borders of the conversation of today.

Prada, solid. We said it 2 months ago, it will be a solid year. where underlying performance is stronger than what we report, but it's fine. We have taken further steps to reduce our exposure to outlets.

And as a result, our full price growth is above -- well above the reported breakeven level that you see today, and this will become more visible as we move through 2026. In the first 4 months of the year, Prada experienced, I would say, a negative start. During the first 15 days of January. As you all remember, we had a great holidays period and maybe clients took a little bit of a rest. Then performance steadily turned positive and has continued to improve solidly after today. Women better than men and men catching up.

We recorded with Prada well above average growth in both North and South America. We talked about this region in length and I think that we are really taking back our correct market share, and hopefully, the journey will be still long. We had an above-average performance in Greater China, and Korea. And again, I would repeat the same thing I said in Americas. I think that our fair market share is higher than what we have today. And so happy. And even in Japan, we had a better performance.

Europe was slightly below average. Our home market has delivered strong comparables for over a decade. However, some stores in secondary cities have been affected in recent months by decline in tourist spending.

We will be back.

On Miu Miu, let me start saying that the past 5 years, we have seen a plus 20% on the first year in terms of revenue growth, plus 20% on the second revenue growth year. Then we had a plus plus 58%. Then we had the plus 93% and in 2025, we reached another plus 35%. So it was not just a kind of bonfire but has been 5 years of constant grade growth of Miu Miu. The bar is now high. We are in the ballpark of EUR 1.7 billion, EUR 1.8 billion annually. And we delivered a 2%, which would have been very close to the 5% that we had in mind initially.

We have grown well in all places, Americas, where we still have a small footprint, so really a long journey yet. A solid performance in Asia, Greater China, Korea. And again, in Europe, we were slightly lowered than what we expected. My reasoning is, we are a little bit newer in Europe compared to other regions in the world with Miu Miu. So we are more affected by lower tourism expenditure in Europe. And I think we are building our solid foundations with our fantastic stores in Milan, Paris and London, and I think that we will be stronger in the future.

I think that Miu Miu has successfully avoided a lot of brand exposures, mistakes, excessive store expansion or enter into many product categories. The brand ranks among the top in desirability, and we will continue to pursue our long-term growth trajectory without any kind of compromise. Just to give you an idea of how healthy the brand is?

If we sum up outlet and wholesale in Miu Miu, basically, we don't reach the 12%, 13% of the total sales of the plant.

Turning to Versace. I don't think there is a lot to be add compared to what we discussed 2 months ago. We are progressing in line with our plans simplifying business model from many different several perspectives, particularly in terms of sales channels and discounting.

The trajectory so far is in line with our expectation. Revenue and EBIT is in line with what we expected so far after the first 4 months. Q3 will be the quarter in which we will be more challenged. Because we are not doing any kind of show, but we are getting ready for the beginning of the great journey in 2027.

Having said this, I will come back at the end, but I will give now the word to Andrea.

Thank you. Starting with net revenues by channel. The group recorded net revenues of EUR 1.43 billion in the first quarter of the year, up 14% at constant FX, plus 3% organic against Q1 '25.

Over the period, exchange rates had a significant negative impact of 740 basis points. At retail level, sales reached EUR 1.24 billion, up 10% at constant FX, plus 1% organic, driven by full price sales and against double-digit comps of 13% in Q1 '25. The conflict in the Middle East, as Andrea mentioned, had a negative impact of approximately 1.5 percentage points on the organic performance for the period. Wholesale was up 40%, plus 17% organic, sustained by the restart of shipments to strategic partners, Saks Global and by the duty-free channel performance.

Positive trends on royalties as well, up 84% at constant FX, plus 15% organic, supported by both eyewear and fragrances.

Turning to the next slide, retail sales by brand. Prada closed the quarter with retail sales up 0.4%, in line with Q4. This result came thanks to stronger underlying trends considering the impact of Middle East and indeed, despite that, another sequential improvement in full price sales, partially offset by further reduction of the contribution from outlets. Worth calling out the Americas and Asia Pacific, which delivered further quarter-on-quarter improvement over the period.

Miu Miu remained highly desirable, continued to grow at a normalized pace with retail sales up 2.4% over the period against the toughest comparison of the year plus 60%. The performance reflects 2.5 percentage points negative impact from Middle East, resulting from higher exposure of the brand to the region vis-a-vis Prada.

Finally, Versace retail performance over the quarter was in line with expectations, contributing in excess of EUR 100 million in retail sales.

Moving to the next slide, retail sales by geography. Asia Pacific continued to show strength, growing at plus 13% at constant FX, plus 5% organic. Miu Miu continued to exhibit robust growth. Prada showed further progression quarter-on-quarter, supported by solid execution and positive trends across Mainland China, Hong Kong, Macau and Korea.

Performance in Europe was up 2%, down 6% organic, driven by a more pronounced contraction in traveler spending and a more modest decline in local consumption. Such performance reflects a challenging basis with multiyear growth, including Q1 '25 at plus 14%. And I would add that we've seen encouraging signs recently in terms of travel spending.

The Americas remained buoyant, up 34% constant FX, plus 15% organic, supported by strong local demand. Both Prada and Miu Miu continue to reap the benefits of the investments we've made in the network, but most importantly, in the teams over the past quarters, and we continue to see meaningful opportunities ahead.

Japan proved resilient with local consumption remaining stable against a very positive Q1, '25. Retail sales in the region were up 1% at constant FX and down 2% on an organic basis.

And finally, on Middle East, the conflict weighed on both domestic and tourist spending as the region was down 22% over the quarter. Both the cost and FX and organic and the impact may be even more material in Q2 if it ends up impacting the whole quarter compared to the 1-month impact of Q1, obviously.

With this, Andrea will take over for some final remarks.

I'm happy with the start of the year. And with the acceleration we are observing, especially in the last couple of months and especially on Prada. We remain confident as our brands continue to demonstrate strong desirability.

At the same time, we're navigating a phase of significant creative transformation across several brands. So many new collections have been entered in the market and huge investment has been made. And on the other side, we're staying firmly on our strategic path.

I think that the rules of the games of this new world are very clear to us. A constant and total unique split of commitment between high end. And we have been strengthening organization, product offer, hospitality standards and new store infrastructures. And when I say split of commitments, on the other side, I think, focus on our enterprise offering, with a mission to attract new consumers to our brands. I think that this is very clear, and this is what we are doing today.

I think that whatever the world is offering us, whatever our specific industry is offering us, we are committed to our group ambitious objectives, as we work towards initiating a new and sustained phase of growth. And if you have comments or questions, here, we are to answer them. [Foreign Language]

[Operator Instructions] We are now going to proceed with our first question. The questions come from the line of Ed Aubin from Morgan Stanley.

So Andrea we are -- I guess, so you spoke quite fast. So I just wanted to clarify to make sure I understood what you said. Did I understand that the last two months, March, April, have been a bit better than January and February.

And if that's the case, is that excluding trends in the Middle East? Or if you could just clarify, that would be helpful.

So let me say that I removed from any kind of conversation the Middle East effect that I've given you as a general effect that we will see also during the next six months. What we have seen in March and April is a constant improvement and happy about it.

Okay. Got it. And then Miu Miu -- I mean, on the last call, you had actually told us, that you were expecting a relatively soft start to the year. So again, that was provided, but still, the deceleration is quite steep. Because I think it's the first time in years that you have single digit and you're increasing your selling space. So your like-for-like, I guess, must have turn negative.

In a nutshell, if you exclude the Middle East, what kind of surprised you in terms of the nationality not totally clear to me. It looks like, obviously, Europe was soft as well from Miu Miu. But where was the deceleration the steepest in terms of the brand?

Europe, you said it. It's basically, I mean -- if I look to comparisons, if I look to relative terms, if I look to our growth rates in Americas, Asia and all the rest, Italy and France are the two places where we declined a little bit more than what we expected.

Got it. And you -- are you -- to an extent, are you confident that things could reaccelerate? Is it gradual? Is it -- in terms of -- for the Miu Miu brand during the course of the year?

So I think that, first of all, in terms of comps, things become easier, especially on the second half, especially on certain Prada categories. And we had been seeing a slowdown in tourism in Europe from, let's say, mid-second quarter onwards. So I am still positive. Obviously, when you have everything doing positive, everything doing positive except a couple of countries, I think this is still valid, then we need to be successful.

We are now going to proceed with our next question and the question comes from the line of Anne-Laure Bismuth from HSBC.

My first question is about the Middle East. Some of your peers have provided the initiation of the performance for the month of March. Will it be possible to have an indication about that?

And -- or has it been improving for the month of April? And finally, what is the exposure of Miu Miu to the Middle East, please?

I think we have given the -- all the numbers that we feel to give you. I mean, on Middle East, you have always to consider three effects. On Middle East, there is a touristic effect in the Middle East, which is slightly balanced by the fact, that Middle Easterns are spending more money in their local countries. But on the other side, you also have to consider that main three airports of Middle East have been slowing down.

So even Asian tourism in Europe has been a little bit declining. So -- and the numbers we have given the effect on Miu Miu, it will be in the region of the 250 basis points. And this is Middle East, obviously.

We are now going to proceed with the next question. And the questions come from the line of Oriana Cardani Intesa SanPaolo.

The first one regards the exposure to travel and retail. Can you remind us the weight of this segment on your total revenues?

Oriana, not a number we disclose. I would expect it to be not dissimilar from the rest of the sector.

Okay. And my second question is on the direct-to-consumer growth profile in the quarter.

If you can quantify the perimeter effect for Prada and for Miu Miu?

I'm not sure I understand the question, sorry.

Yes. Regarding the regrowth of the retail for Prada and Miu Miu. Can you tell us the perimeter effect, so the impact of the perimeter effect?

Space, new openings. That's what you.

Yes, Yes.

I understood, understood. For Prada, we can consider the performance like-for-like.

For Miu Miu, there is indeed a contribution from new openings helping performance what we see in like-for-like store is that there's a very, very good number of them, that are steady, and there are a few with exceptional performance and productivity in 2025, which are replacing a bit.

And it won't be a surprise that, as Andrea already said, they are in Europe, particularly in Italy and in France. And having said that, their KPIs remain extremely good.

We are now going to proceed our next question. And the questions come from the line of Chris Gao from CLSA.

So firstly, specify with you regarding the China cluster trends and also other major clusters. So basically, how are these like Japanese, South Korean and also other major classes like Americans doing. So can we specify a little bit on that, just to make sure we understand the full picture.

I understand when you comment on regional performance, you comment a little bit. I just want to specify. So for Chinese cluster, do you still see the positive growth like you saw previously? How is the trend 2Q-to-date? And how about other clusters 2Q to date trends? This is my first question.

It's positive for -- with reference to the Chinese cluster that you asked about specifically. It is positive for Prada. It's positive for Miu Miu. Therefore, it is positive at group level. And as we said, it's solid.

When we look at the clusters, from the comments we already made, I believe you can infer that the softness was with reference to Europe, and with -- in Europe, I mean, of course, you have a European component and you have then a tourist traveler component.

And the traveler component tourist component is the one that was impacted the most in Q1 by also the events we know, but also when we look at the European cluster was softer. The rest as we already said, I mean, very, very solid. With the exception of the release of course.

Right, right. This is very helpful. So the second question is regarding the growth drivers. So some other luxury peers actually commented on some sequential improvement noted on the new consumer recruitment. So I just want to understand more like regarding the current growth has been seen on Miu Miu and also on Chinese.

Are you also seeing a similar trend? Or actually, you are seeing still more balanced growth between new customer acquisition and existing customers?

So what we have, I think, Miu Miu is -- still have a good pace so -- and has its own, had its own history and trajectory and today's reality in China as they were asking.

Looking to Prada we have seen since June, July last year, sequential improvement on all KPIs. And we have seen it. We have seen it slightly in the first month, some up and downs, and we have seen it some more vigorous evolution between pre-Chinese New Year, after Chinese New Year and the last couple of months.

Right. So the last quick one is about -- can you specify more about like the pricing, like pricing and mix contribution for Prada and Miu Miu brand?

Yes. As I was saying in the last, I think that we have -- we are having a kind of two businesses in one. So one side we're seeing volumes in the entry price segments. On the other side, we're seeing extremely great value on high-value transactions.

So I think that all of this at the end is giving a kind of an average. But inside the average, there are two very big differences.

We are now going to proceed with our next question and the questions come from the line of James Grzinic from Jefferies.

I have 3 or 4 very quick ones, so I'll ask them one by one, if okay. Can you perhaps tell us how much stronger the full price sales growth was at Prada, compared to that plus 0.4% that you reported for the brand. That would be the first one, please.

One give more than what we said. It's -- as Andrea said, is a solid number.

All right. And then, I guess, Andrea, specifically during your prep remarks, that there was almost like in promptu addition of talking to seeing encouraging signs in travel spend recently in Europe. Can you perhaps expand a little bit on that because it felt a little bit surprising. So I just wanted to check whether I got the right end of that specific?

It's green shoots that we've seen now and then. I think we mentioned it before that we saw a very positive impact, for example, in Italy and Milan in the period of the Winter Olympics. And -- what I was referring to is that recently, very recently, I think we've seen not just in Italy, but more broadly in different parts of Europe, some positive trends that are encouraging. But as always, I think it's already quite complicated, I think, to read trends into quarterly results.

I think it's even more difficult when we want to read too much into monthly or biweekly trends. But nonetheless, I mean, considering even since the start of the year, the bad news geopolitically, macro-economically and so on, I mean, have been significant. I mean let's also start looking at the green shoots when we see them.

Got it. And just quickly following on Miu Miu. It sounds like you're comfortable with the idea that you might have an acceleration in the second half of the year especially. Can I just ask, do you sense that Q1 was the trough for brand delivery, specifically.

I would love to be a magician and being able to really answer your question. I mean there are so many things happening in the world, that is very complicated too. I mean what I said is what I repeat in terms of comps, there is a better off second half, in terms of the durability of the brand, we're still at the maximum.

The team is enthusiastic and great. I think that new products insertions are all great. So let's go and battle it and fight for it and let's see what happens.

Great. And I guess one last one, sorry, bear with me. You talked about a lot of newness efforts elsewhere in the industry. And I presume having to cope with marketing budgets being elevated in other brands.

Have you responded? Have you stepped up efforts from your own perspective? Or have you maintained the line in terms of intensity of marketing investments. So to get a little bit of a sense of...

We maintain our line -- we maintain our path. We maintain our line, nothing different. I mean, we are so happy of how we have come out in the fashion shows, always in the top 3-5 shows of the season. We have seen the kind of interaction with our clients and fans across the world.

So really nothing -- we didn't do nothing, and we have gone through our own journey.

[Operator Instructions] We are now going to proceed with the next question. The question come from the line of Melania Grippo from BNP Paribas.

This is Melania Grippo from BNP Paribas. I would like to ask you, if you could please give us an idea of what was the performance by category for both brands, I mean, which category did outperform in Q1?

So as I said, on Prada, women was better than men. Leather goods came first. Ready-to-wear was good and shoes was stirred.

And the same thing applies to Miu Miu?

Miu Miu was balanced.

And also, I have a follow-up on what you mentioned regarding the full price sales. I just would like to understand you're continuing to cast your number of outlets, if you can update there?

In the next 3 years, we will trim yet another 5, 6 stores. And for 2026, basically, we are done.

We are now going to proceed with the next question, and the questions come from the line of Mavis Hui from DBS.

Can I just ask, firstly, our wholesale organic growth was very strong at 17%. And how much of that wholesale growth is Versace versus Prada and Miu Miu, please?

No, it was basically the -- yes, yes. So there is no Versace in there, but it's the -- what we discussed at the end of the fourth quarter and the effect of the tax, balance up and down.

Great. And then my second question is that on our Q1 retail organic growth is 1%. And because I think partly because again, it's a very strong comp a year ago. So if we go along the year as the year progressed, the comps actually will use.

So what is the realistic organic growth range for Prada group into the coming quarters?

Especially into the second half when the base effect would be much lower. Thank you.

Thank you. I believe that everything we discuss until now is to try and give a sense of what we see, what we feel, what we believe may happen and at the same time of the many uncertainties that remain. And therefore, I don't think we can be more specific than would add anything, to what we already said in that regard.

Definitely. And my last question is that what is our latest proportion of sales coming from tourist consumption globally year-to-date? And how would such level compare to like past 2 to 3 years?

We've never given that figure, and I believe there was the same question asked before to what -- to which I give the same answer.

I'd say that if you compare the past couple of years, I mean, like travel flows change all the time. And we've seen it also in the past few months. Think about what's been happening in Japan, for example, and so on and so forth. But the overall mix and contribution doesn't change that significantly.

We are now going to proceed with our next question and the questions comes from the line of Paola Carboni, Equita SIM.

Sorry, just one question from my side left. It's about the space effect at Miu Miu, should we also assume that this should become more evident in the next few quarters?

And if you can remind us your plan in this respect for 2026 and 2027.

The answer to the second part of the question is, Andrea, said it in the past call, we've got an expectation to add for Miu Miu between -- by the end of the year, another 5 to 10 stores. So no changes in that regard.

And therefore, I mean, of course, these stores will take time to get to a run rate and also the openings will be in the next months, some closures, some more towards the end of the year. But yes, there would be even if not meaningful, but there would be some impact coming positive.

And do you confirm, if I remember correct, that we shouldn't envisage a further space effect or further store openings for 2027 or am I wrong?

Significant. No, not significant because, I mean, as we said, there will be, of course, openings, but there will also be closures. And so net-net, no material on Miu Miu.

I believe the question was on Miu Miu. On Prada net-net, we will probably be negative with more closures than openings.

We are now going to proceed with our next question. And the questions come from the line of Luca Solca from Bernstein.

I seem to remember, Andrea, from one of our last conversations that you are planning to attract attention back to Prada, that you have a few big white rabbits that could potentially be extracted from your hat without revealing any secrets.

Could we maybe get an idea of where you would get them? Is it major events that you're planning, is it a major store openings. We are, I think, in a market where the wind is very, very, very weak.

And so catching the wind is important, catching attention from consumers is very important. We see that your competitors have done that by appointing new creative directors. I wonder what you could counteract to that.

So first of all, I think that we have two regions in the world, where we still have to conquer our fair share. And it's two big regions in the world, and it's America and China. And I mean, we are doing and we are showing to those markets a very high level of commitment. Always keep in mind the purchase of buildings on Fifth Avenue and future projects there. And on the other side, in China with the Rong Zhai development I think that we have built our epicenter in China.

And I think that both teams are really evolving extremely well, and we still have, I think, a long journey of opportunities and market share gain.

Then we are -- I think that we are very well balanced on today, on certain things where we were not. So we were not fully ready for high-value transactions. I think we are today. I think that we have to prove to ourselves more than to our clients. And I think that in the last 12, 18 months, we have been able to do it.

And we sold more precious bags in these first four months compared to all 2025. So we are evolving and we are growing.

Similarly, we always had a way to attract with certain of our product categories, new clients. We have done a huge push on our Re-Nylon projects, our UNESCO and the SEA BEYOND project during the month of April, out of stores and in the stores with a real new Re-Nylon collection, very well received and with very competitive pricing.

So I think we are going both ways. We discussed about Alexander house, but we are now going to open in the next 12 months, at least another 3 or 4 big places for Prada and we will talk about them as we move along.

I think that we are over with the questions. Thank you to all of you, and see you soon.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

Good day, and thank you for standing by. Welcome to the Prada Group Full Year 2025 Results Presentation. [Operator Instructions] And please note that today's conference is being recorded. I would now like to turn the conference over to Mr. Andrea Bonini, Group CFO. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining Prada Group's Full Year 2025 Results Conference Call. This is Andrea Bonini Group Chief Financial Officer, and I'm delighted to be with you again. I'm joined by Mr. Andrea Guerra and Mr. Lorenzo Bertelli. The agenda for today's presentation is on Page 4, and as always, it will be followed by Q&A.

As a reminder, during today's call, we may discuss forward-looking statements, which are subject to risks, uncertainties and factors beyond our control that could cause the actual outcome and returns to differ materially from such statements. Please refer to the disclaimers included on Slide 2 of our presentation.

With that, I will hand over to Mr. Guerra.

Hello, and welcome also by my side. Obviously, we are here today during a very peculiar moment, a period of turmoil in Middle East. We do not know what will happen, but we hope it will be short. And let me be -- let me say something. Let me be very close to all our associates and all our people on the ground today in Middle East to all our stakeholders in the region in this specific moment of pray, reflection and community, we're very close to all our people in the region. Having said so, and I think this is paramount. I would love to start off saying that 2025 for our industry has been a very challenging year.

I can state, and we can state that during the last 3, 4 years, the industry lost something like 1 consumer out of 5. In this long period, the Prada Group has been very solid and not only for the past years, but also in 2025. Retail sales in 2025 have grown again throughout the year, mostly or mostly entirely again, like-for-like, marking another plus 8% at the end of the year.

We have been able against strong comps of 2024 to keep Prada on a breakeven like-for-like and most importantly, a sequential improvement through second half compared to first half. Miu Miu finished Q4 at a plus 20% on a plus more than 80% of a year ago. And it's obvious looking to the trend in the last 4 quarters that we have begun our growth normalization journey that will continue during 2026.

2025 has been for our both brands, a very interesting journey. Why interesting? Because we were able to showcase a lot of novelties, a lot of new ways of doing things, utilizing new tools, really upgrading our capability on digital technology and artificial intelligent tools to do what, to become closer, to upgrade significantly product intrinsic value, to be sure to allow all our consumers to understand and therefore, to tell them the stories around products that were coming out of the market, upgrading significantly our hospitality inside the stores and outside the stores and in the redefinition of new stores, flows. On the other side, always in this new normal we have been very clear and very focused on enterprise products and ranges.

During this year, we did not only perform solidly, but we continued investing on our people on their know-how on their motivation. We have continued investing on our strategic digital plans and AI tools. We continued investing over proportionally on desirability and awareness of our brands.

And we have continued to invest over proportionally versus sales on our stores to upgrade aesthetics and even more important to increase our hospitality standards. And even if the level of investments on all these cost lines have been overproportionate, we were able to keep a steady profitability, which means that what we committed upon which was being more productive and be more efficient, we have been able to do it in all other profit and loss lines.

And do not forget, and Andrea will be obviously much more detailed of me on this, the amount of FX headwinds, we have been leaving and we will continue to experience in 2026. Last but not least, we began during December, our journey, closing the acquisition of the Versace brand.

What does all this mean? We have been talking about a new normal. We have been talking about digital tools really coming to a standard use. We have been discussing about hospitality. It's obvious that we are entering a new journey now together with Versace.

And this means that on one side, we have new achievements to be accomplished during 2026, '27 and '28. And on the other side, also the commitment to constantly grow over market range. During this next period, we feel that the Prada performance will be solid and to really reaping all benefits of desirability first and all actions and investments in place.

We are consolidating Miu Miu's success, enhancing awareness and driving growth through 2026 with very different weights on the 2 halves. The first half is more challenging because we were yet in a plus 40%, 45% range a year ago. Therefore, we expect a first half to be in the single-digit growth, but yet being able to show a much solid trajectory for the full year.

We are beginning the journey with Versace, a year of consolidation, a year of synergies and a fantastic start to shape the creative vision. The journey will go through a first phase of channel repositioning, supporting high-quality full prices and distribution. And we will see what this means for the numbers of Versace and for the overall performance of the group.

I will now turn the word to Lorenzo and Andrea to give you a full view of Prada and Miu Miu brands, numbers, performance and also an initial view of Versace first steps in 2026.

Good afternoon. Thank you, Andrea. First of all, I would like to highlight how Prada continues to strengthen its position as a cultural and creative leader, not only by setting trends but also by consistently elevating the brand experience across all touch points.

All the core of this performance is authentic creativity. Throughout the year, our fashion shows reaffirmed Prada's ability to anticipate and shape contemporary culture, translating a deep understanding of the present into a clear, distinctive aesthetic language. This creative strength was equally evident in our communication. We delivered highly impactful campaigns that combined cultural relevance with strong brand desirability.

At the same time, we continue to build a multifaceted brand universe throughout unique experiences and long-term partnerships. A key milestone was the opening of Mi Shang Prada Rong Zhai, our first stand-alone restaurant in Asia, considered by renowned director Wong Kar-wai. This project perfectly represents our approach to hospitality as a cultural expression where fashion, cinema and lifestyle intersect in a meaningful way.

Enhanced retail concept contributed to strengthening the client engagement. New hospitality venues in Shanghai and Singapore, the landmark retail opening in New York and the refined setting of Prada Alexandra House in Hong Kong are some of the key milestones in the evolution of the store footprint over the year.

In parallel, our long-standing partnership between Prada Linea Rossa and Red Bull allowed us to engage new audiences through high-performance sportswear projects, reinforcing the brand's connection to innovation, performance and contemporary lifestyle.

Finally, Prada continued to play an active role in shaping the contemporary cultural debate with signature initiatives in London, Osaka, Abu Dhabi and Milan. These events were complemented by special projects and activations such as Days of Summer and The Sound of Prada, which further expanded the brand reach. All of this reflects our ongoing commitment to creativity as a strategic driver of value.

This slide illustrates how Miu Miu continues to stand out as one of the most desirable and relevant brands in the luxury landscape, driven by a language that is both distinctive and highly distinctive.

At the heart of Miu Miu's performance, is a vibrant disruptive creativity, which consistently fuels the brand desirability. Throughout the year, Miu Miu maintained an exceptionally high level of buzz supported by fashion shows that were widely acclaimed and strongly resonated with both the fashion community and broader cultural audiences.

This creative energy was amplified by our campaign, which features the diverse and influential cast of talent reinforcing Miu Miu connection with the new generations of consumers. Special projects played a key role in engaging and expanding Miu Miu's ever-growing community such as our collaboration with New Balance and the American Tennis Champion, Coco Gauff as well as the exploration of new creative territories through Catherine Martin's Upcycled collection accompanied by her directorial debut short film, Grande Envie.

In addition, the launch of Miu Miu's first fragrance with L'Oreal Miutine marked an important step in expanding the brand's universe. Experiential activations such as the Atheneum and Gymnasium pop-ups further enriched Miu Miu's signature codes, transforming retail into spaces of discovery and cultural exchange. In parallel, Miu Miu continued to reinforce its distinctive cultural positioning throughout event initiatives that deepens its long-standing dialogue with arts.

Finally, all the initiatives were accompanied by a mix of openings and renovations that elevated the store network for enhanced customer journey. One, London and Tokyo were among the most significant projects embedded over the period. Overall, Miu Miu's strength lies in its ability to combine strong desirability with authentic cultural relevance, a balance that continues to fuel growth and engagement.

Let's move now to ESG. Over the past year, we continued to execute our sustainability strategy across our 3 pillars: planet, people and culture. On the environmental front, we made tangible progress across both our operations and supply chain. Investment in green energy and low impact solutions enabled us to exceed our approved science-based target for Scope 1 and 2 greenhouse gas emissions, a result that confirms the strength and discipline of our decarbonization pathway. At the same time, we advanced our raw materials conversion plan, strengthened environmental data collection across the supply chain, expanded our water stewardship initiatives and further improved responsible chemical management.

Equally important is our commitment to people. During the year, we reinforced our efforts to foster a fair and inclusive workplace. We achieved the gender equality certification in Italy, rolled out our worldwide people culture forums and delivered D&I awareness training programs in line with our global D&I road map.

This year also marked the 25th anniversary of the Prada Group Academy, a milestone that reflects our long-standing dedication to preserving artisanal excellence and supporting generational transitions. Culture remains a defining element of our identity. Through our partnership with UNESCO and SEA BEYOND projects, we further strengthened our commitment to ocean education, opening the first Ocean Literacy Center in Venice, launching a dedicated Multi-Partner Trust Fund and Ocean Educational Exhibition in Shanghai. We also renewed important partnerships supporting Urban biodiversity and cancer research. Overall, the year reflects consistent progress and a clear commitment to creating a sustainable long-term value.

I will now leave the floor to Andrea for the financial review. Thank you.

Thank you, Lorenzo. Before we dive into the numbers, let me remind you that we completed the acquisition of Versace on December 2, and therefore, we consolidated one month of contribution from the brand into our financials. In the presentation, we will also provide growth rates excluding this impact, to which we refer as organic growth.

With this in mind, let's now move to the key financials. The group reported net revenues of EUR 5.7 billion, up 9% versus fiscal year '24 at constant FX. On an organic basis, revenues grew 8% year-on-year. This performance delivered against high comps throughout fiscal year '24, marks the fifth consecutive year of growth at group level. Exchange rates had a negative impact of 380 basis points on revenues and the increase at current exchange rates is therefore plus 5%.

Retail sales for the period totaled EUR 5.1 billion, up 8% organic versus fiscal year '24 and up 28% versus fiscal year '23 at constant FX. EBIT adjusted reached EUR 1.32 billion in fiscal year '25 with margin of 23.2%, including the dilutive impact of Versace. Pre-Versace consolidation, EBIT-adjusted margin was steady versus 2024, in the context of significant investments across functions and FX headwinds. On a constant currency basis, EBIT adjusted margin improved year-on-year.

Finally, thanks to the significant cash generation we maintained a healthy balance sheet, closing the year with a net debt position of EUR 466 million after EUR 620 million of CapEx cash out, including real estate, EUR 1.2 billion for Versace acquisition and EUR 420 million of dividends.

Moving on to the next slide. Retail continues to be the key driver of the top line performance, up 9% versus fiscal year '24 at constant FX, 8% on an organic basis, driven by like-for-like full price sales and with a positive contribution from both average price and full price volumes.

The fourth quarter delivered a solid performance, up 6%, notwithstanding the challenging comparison base. As a reminder, in 2024, retail channel growth was remarkably consistent at plus 18% in all quarters. Contribution from space remains limited in the low single-digit region. Wholesale was up 4% year-on-year, 3% on an organic basis, reflecting the usual selective approach with independents. Q4 at minus 1% organic was impacted by our cautious stance on shipments to Saks Global, and we are pleased that business with this important strategic partner has now resumed. Royalties were up plus 19% year-on-year, plus 14% organic, supported by both eyewear and fragrances.

Turning to next slide, retail sales by brand. We are pleased with the performance of our brands as they continue to enjoy high desirability and relevance in a challenging context. Prada showed good resilience, closing the year at minus 1%, with Q4 delivering further sequential improvement and turning positive despite the more difficult comps supported, in particular, by Mainland China, Korea, Japan and Americas.

Miu Miu delivered sustained growth throughout the period against exceptionally high comps. Retail sales grew by 35% to reach EUR 1.6 billion. Growth was well spread across all product categories and regions. Q4 sales were up by 20% against plus 84% in 2024, with growth remaining well balanced. As a result, the brand contribution to group retail sales increased to 31% against 25% in fiscal year '24. As for Church's, the strategic efforts of the past years continue to keep the brand on a positive trajectory, driven by like-for-like sales.

Moving to the next slide, retail sales by geography. We are pleased to report that the group achieved growth across all regions. Asia Pacific showed a good progression over the year at plus 11%, plus 10% organic with Q4 broadly in line with Q3, notwithstanding the higher comps. Positive performance in Europe, up 5% over the year, plus 4% organic.

We saw softer trends in the second part of the year with strong multiyear comps and lower tourism weighing on the region. Consistent double-digit growth in the Americas, with sales up 18% plus 15% organic, driven by local demand. Japan delivered growth notwithstanding the exceptionally high touristic flows of the last year, closing the year at plus 3%. Q4 showed some improvement versus Q3, driven by both solid local demand and increased traveler flows, notwithstanding the geopolitical tensions in the region. And lastly, the Middle East also delivered a solid performance at plus 15%, we're moderating trends in the second part of the year on high comps.

Turning to the next slide. Gross margin reached 8.3% in fiscal year '25, up by 50 basis points, thanks to operating leverage and channel mix, while the dilutive impact from Versace consolidation for only one month was negligible. Excluding the consolidation of such and strong FX headwinds, EBIT adjusted margin improved, driven by slightly higher gross margin.

G&A savings coming from efficiencies and operating leverage which more than offset higher marketing and selling costs. Including the dilutive impact of Versace consolidation, as shown in this page, EBIT adjusted reached EUR 1.32 billion, corresponding to an EBITA adjusted margin of 23.2%. And finally, net income reached EUR 852 million, an increase of 2% versus fiscal year '24.

Moving to the next slide. CapEx for fiscal year '25 was EUR 617 million, EUR 535 million excluding real estate as we continue to invest across retail, industrial capabilities and technology. On the retail side, as you've heard from Andrea, investments were concentrated on the enhancement of the store presence with renovation projects and control new openings and enlargements at both Prada and Miu Miu in line with the objective of furthering the relationship with clients.

Aside from retail, we continue to strengthen our industrial capabilities, investing into our infrastructure and to progress on the digital evolution journey as we started to reap the benefits from our multiyear system upgrade plan. We expect CapEx as a percentage of sales to start reducing from the current fiscal year.

Moving to the next slide. We are very pleased with the evolution of net working capital and the control of the inventory, showing further improvement year-on-year on an organic basis, with incidents on net sales declining from 15% to 14%.

And lastly, we retain a healthy balance sheet post acquisition with net debt of EUR 466 million. The Board of Directors has proposed a dividend per share of EUR 0.166, which compares to EUR 0.164 last year, which would result in a total dividend of EUR 425 million and a stable payout ratio of 50%.

I'll now pass it back to Lorenzo for an update on Versace.

Thank you, Andrea. As we have said in the past, we are very excited about this new chapter. With Versace, we welcome a brand that has made the history of fashion and glamor as we know it today. It's estate is bold unique, represent modern elegance and constitutes highly complementary addition to Prada Group's existing portfolio.

We started this journey being able to count on a lot of strengths. First of all, remarkable and long-standing awareness; second, resonance across a diversified client base, which has limited, if not overlap with our customer base.

Third, strong legitimacy in haute-couture and across product categories, balanced across men and women. Lastly, strong cultural relevance, rich archive and solid brand equity. Because of this, we believe the brand offers multiple untapped levers of growth.

We are aware that this won't be an overnight task, but a passionate journey towards the brand's full potential, and that's why the timing of our initiatives will be of the essence. In terms of priorities, the following slide highlights the key actions we are going to implement in the next months.

Creativity will be the foundation of our work, and we have taken a first important step into this direction with the appointment of Pieter Mulier as Chief Creative Officer. Pieter will join in July, and we are very excited to have him on board.

In the meantime, we will continue to assess the core collection and product lines to identify areas of improvement in terms of quality and structure. The second building block of our plan will be a gradual channel repositioning. We will progressively shift the focus towards quality, full-price sales and distribution.

At the same time, instilling a retail excellence mindset will be essential for improving in-store execution. In parallel, we will progress with the integration process across functions, and we expect to complete the separation from Capri Holdings in H2. Looking at 2027 and beyond, we will essentially bring all of these areas to the next level as we lay down the basis for the building long-term desirability.

At the beginning of the year, we'll present Pieter's first collection showcasing the new creative vision rooted in the brand's original spirit and DNA. The collection will also continue to evolve as we progressively reposition the brand and relaunch special project like Atelier Versace.

We also continue with the network optimization as we progressively rationalize the off-price channel and the markdown practices while focusing on driving in-store productivity with self-help initiatives in terms of retail execution. All these actions will be supported by a further integration of activities and processes across the organization to unlock synergies opportunities.

Now back to Andrea for some financial considerations.

Thank you, Lorenzo. In terms of financials, as already explained, we consolidated only one month of the business in 2025. On a full year basis, the brand generated revenues of approximately EUR 680 million. Looking ahead, 2026 will be a year of transition for the brand as we navigate the change in creative leadership. We also want to commence the path towards a healthier, more sustainable and more profitable business conscious that we have to move back to go forward.

Therefore, we will further clean up the collections discontinuing Versace Jeans Couture and leaving no sub-brands in existence in ready-to-wear and other core categories. At the same time, we will start to implement a greater discipline in terms of discounting while remaining mindful of the commercial needs.

On the wholesale front, we expect progressive stabilization, and we will start implementing some actions to rebalance the commercial relationships on healthier terms. All in all, we expect this to translate into a mid-single-digit top line contraction at constant FX, which is likely to become high single digit at current FX.

Turning to profitability. First of all, let me point out that the company's initial margin is at a good level in relative terms to our industry. However, we believe that quality must be improved and also that initial margin is diluted by significant discounting. Therefore, we'll progressively invest in quality. On the other side, we will start implementing greater discipline on discounting.

All considered, in fiscal year '26, we expect gross margin to be relatively stable with a caveat on duties as the situations remain fluid. In terms of OpEx, we have acted decisively, and we will see the benefit of initial synergies and savings. This will be partially reinvested in strategic areas like visual merchandising and marketing, while we maintain cost discipline on all other nonstrategic items.

All in all, we expect to be able to mitigate the negative impact coming from the top line reduction, and the EBIT loss will not be too dissimilar from the one incurred in fiscal year '25. The target is to limit that to a 2-digit figure.

Now moving to the next slide. Let's translate that into a group view. On top line, for 2026, our ambition is to continue to generate solid, sustainable organic growth at Prada, Miu Miu and group level. Prada turned positive in Q4, and our expectations are for a solid year. Miu Miu is now lapping the fourth consecutive year of very significant growth, and we have continued to observe normalization.

As Andrea mentioned at the beginning of the call, H1 is particularly challenging with Q1 at plus 60%, and Q2 at plus 40%. Nonetheless, we aim for another year of growth. We already discussed Versace in the previous slide, so it doesn't require any further comments. Last point on top line. We expect to continue facing meaningful FX pressure in fiscal year '26, similar to 2025.

Turning to profitability. Let me first discuss expectations excluding Versace. We remain committed to continue to deliver some degree of organic margin progression on a yearly basis. Marketing spend will slightly increase as a percentage of sales, and we expect to continue to achieve efficiencies in labor, rent and G&A.

So leaving aside the impact of Versace, as long as the group top line growth in reported terms remains in mid-single-digit territory, we can deliver a steady EBIT margin without acting more drastically on investments or costs. Versace's consolidation will result in EBIT margin dilution in fiscal year '26, and our target is to resume progressive improvement from 2027.

With that, I'll hand over to Andrea Guerra for closing remarks.

We're very happy to have shared with you our 2025 performance and to share with you our initial thoughts on future journey. Years ago, we committed to an upgrade an evolution of our ability to have a stronger and more proactive relationship with all our clients and potential clients, to be more efficient and productive in our retail network and overall in our company, to empower and upgrade our people, wherever they are in the group, aligning them constantly to their brand missions.

We achieved solid constant growth. We significantly improved in all our consumer-faced activities. We have seen profitability increase year-by-year, working capital sequentially improving and therefore, cash flow. So obviously, we are pleased for all these achievements and all these activities. Now we're entering a new journey, which is made by all the things that we have already talked about in constant evolution plus Versace.

We are committed. We're working hard. We will be patient to have the right pace. Obviously, in this new normal world, agility and efficiency remain nonnegotiable. I will try to anticipate some of your questions now. How are these first months? Trajectory for Prada is improving. As Andrea said, we are expecting a solid year for Prada.

And we had a solid Chinese New Year full period, like-for-like on last year's and in the whole Asian region, except Japan, where Chinese tourists were much less present. But on the other side, fortunately, in Japan, we are winning with our beloved Japanese local clients. Europe started January slow and improved with Milan Olympic Games and Fashion Weeks.

Obviously, Europe for Prada and Miu Miu are challenged by very high double-digit comps for the past years, not year. Korea is still strong. North America is still very strong. And obviously, I will repeat that we are here to challenge ourselves to keep a growth rate higher than market average with trajectories which are different from our different brands as stated during our presentation.

With this, I would like to thank all of you for listening and we are now open to your questions and comments.

[Operator Instructions] We are now going to proceed with our first question. The questions come from the line of Ed Aubin from Morgan Stanley.

So the first one is going to be on top line to Andrea Guerra. So you mentioned that you expect -- or sorry, maybe it was Andrea Bonini mentioning that you expect a solid growth for Prada in 2026. Could you please kind of define solid? Should we understand that you expect to grow kind of low single digit at constant FX for Prada after a minus 1 in '25 or would that be even higher than that? And if so, what kind of is going to drive the reacceleration from '25 to '26 and then regarding Miu Miu, do you think a double-digit growth at constant FX is something which is achievable or given the difficult comp that might be difficult to achieve? So that would be question number one.

Hello. Yes, we -- you're asking for a guidance, and we are not giving guidance, especially in this world today where, I mean, in the last -- only last 6 months, we have been living any positive and negative and side effects. So I hope that we use the proper words. We have been very careful on adjective we were using, and I will not comment further. The only comment I would do is that if everything goes well, we will be double digit on Miu Miu. But with this world, things could be different.

Got it. But maybe Andrea, if I can just follow up. Not asking for a guidance, but again, you talked about your expectation for a solid growth for Prada brand in '26. Again, without quantifying you were down 1% in '25. So if you could please elaborate on why you think you're going to reaccelerate in '26 versus '25?

Sure. We had a peak down in central months of the year and the central months of 2025 or else we would have been pretty positive in 2025 as well. I think that we can cover those months with a positive rate. We have been positive since August. August, September, October, November, December were positive. In December, it's a question sometimes of calendar where a year, you've got a couple of days gift a year, you got a couple of days back. And this was a case where we gave it back or else in a kind of organic manner, we were a little bit more positive.

Having said so, I think we have a rhythm of product innovation, of product evolution of activities, of events. We -- I think we have reached a level of maturity on a number of retail activities and hospitality activities. And we're also beating our own sometimes mind effects on very high transactions. So these are all the reasons why I feel solid as we said.

Got it. And my second and last question, and maybe for Lorenzo on Versace. So you've been appointed Executive Chairman. Congratulations. You also mentioned that you've hired Pieter Mulier, which is -- who is obviously very well regarded in the industry. Is the team in place now? And did you hire mostly from the Prada Group, you had transfer? Or did you hire external people. And again, how fast it seems that you want to not rock the boat, so to speak, too quickly with the rationalization of the store estate and the outlets. But how do you -- how fast are you ready to move on kind of shrinking to grow the business longer term, yes?

Thank you for the question. No, I would say it will be balanced. Let me start from the end of your question, then I go back to the other. So the priority for sure is at the full price in the retail network and then also the rationalization of the outlet also thinking that with the new collection coming out from Pieter from next year, you will have previous collection that, of course, they will need to accelerate to the outlet. So outlet will come later for sure, for the full price. Then regarding to the question organization, I think it's quite a hybrid because we have some of the functions that have been absorbed in the group function typical back office function like IT and others. And so it's more like efficiency, poor efficiency, other function.

We simply had streamlined a bit the organization, so not like key significant outside role except that you heard on journal like the shift of the supply chain that was coming from Valentina was a former Prada historic employee. So external but let's say, part of the family in the past. And at the moment, more or less, we are happy like this also with Emmanuel and a CEO. So -- then we will take for sure, the next 6, 8 months to even better understand the organization and we will see. But at the moment, we are for sure happy. Of course, with Pieter, we will have some changes in the design offices, but I would say, normal stuff and that's it.

We are now going to proceed with our next question. And the questions come from the line of Thomas Chauvet with Citi.

I have two, one on revenue and one on the Middle East. The first one on Versace revenue contraction that you anticipate for this year from EUR 680 million last year. We understand it's largely self-inflicted due to the channel repositioning. Can you give us an idea of the magnitude of the store closures you are planning? Are there also some wholesale rationalization or is it just retail closures through '26 and '27? And you said earlier, the expected operating loss won't be much higher than '25. Can you indicate what was the Versace EBIT loss in calendar '25, it seems to be around EUR 10 million, EUR 20 million, if my math is correct, if we assume, as you said that the Prada Group -- the old Prada Group EBIT margin was flat at 23.6% ex Versace. That's my first question.

Thomas, [Foreign Language]. So on revenue, I said it that the expectation is for mid-single-digit constant FX, which is likely to become high single digit or we will be because, I mean, with the FX, you never know on a reported basis. That's on the top line of Versace.

And on the second question, likewise, I mean, not much to add to what I already said. The -- I said that the -- our target is to limit the operating loss to a 2-digit figure. And if the number you were referring to, i.e', the -- I think you mentioned EUR 10-ish million for fiscal year '25, I assume that number is for -- you were referring to a number that is the one that we consolidated for the fact of December into our numbers, and it's not of mile, let's say that it's a single-digit number, but it's around there.

Is that clear?

Yes, that's very clear. And my second question on the Middle East, which you disclosed separately in your segment reporting 5% of your sales. Can you remind us how many Prada and Miu Miu stores you operate in the region? And how many of them are currently closed, given the complex situation? And what is your overall exposure to the Middle Eastern clientele, if you take into account the sales to locals in the Middle East, but also sales to Middle Eastern tourists traditionally in Europe and other markets?

Regarding Middle East, in terms of opening and closing stores, it's a daily evolution and a daily activity. The most difficult situations are in Qatar, in Bahrain and in Kuwait. Having said that Middle East is very different places, very different regions because, I mean, basically, Saudi nothing happened and it's, I would say, 100% local clientele. The Emirates, I would say, is 1/3 locals, 1/3 expat, 1/3 tourists. And I mean, we will see what's going on.

We are now going to proceed with our next question. And the questions come from the line of Chris Gao from CLSA.

Yes. I have two. So firstly, regarding the progressive improvement in 2027 regarding Versace, I just want to follow up a bit on that. So does it mean that we expect Versace will go back to a growth territory? And also for the margin, can we expect turnaround or...

Excuse me, your line is very, very disturbed. We can't -- there's a huge noise.

Can you hear me now?

Hopefully, let's see.

Can you hear me now? Okay. So first question is about Versace improvements in 2027...

Excuse me. No, your line is a mess. Try later, please. Thank you.

We are now going to proceed with our next question. And the questions come from the line of Oriana Cardani from Intesa Sanpaolo.

The first one is on the wholesale channel. What are your expectations for this year? And my second question is on the retail network. Can you give us an idea on the store openings you expect this year and the perimeter effect you expect due to these openings?

Yes. On wholesale, more or less, we're having the same kind of percentage growth in these last years, and more or less, we will keep on with the same percentages. As we said, we had the necessity to keep back some inventory not to be shipped to Saks at the end of 2025. And we resumed and Andrea was saying our shipments beginning of '26. This is also why in Q4, we were a little bit less in our normal standard average. So I would say that we will keep on having more or less the same average growth that we had in these years.

In terms of retail network, for Prada, I would say it will be between some pluses and negatives, some opening and some closures. We will remain with the same kind of square meters, but I think we will close more stores than what we will open during 2026.

With Miu Miu, we will add another 5 to 10 stores during 2026. And then as we said 2 years ago, and we will also close some with Miu Miu. But at the end of 2026, the big progression in terms of space expansion for Miu Miu is basically over. That is we will be with something around 170, 175 stores, and we will remain there for a while.

We are now going to proceed with our next question. And the questions come from the line of Chris Huang from UBS.

I have three, if I may. Starting with the first one, just a clarification on the Prada brand cluster. I think in the previous calls, you always provide some color. So if you can do the same for Q4 in terms of Americans, Europeans, Chinese cluster trends for Prada brand retail, please?

Chris, so clusters for the Prada brand, the Chinese -- starting from Chinese cluster, there was a significant quarter-on-quarter improvement which is driven by positive domestic consumption and better travel spending. Europeans was flattish for the year, slightly softer in Q4 versus Q3 with local demand remaining more resilient than travel spending.

The North Americans was positive mid-single digit for the year and further improved in Q4 to positive, I'd say, high single-digit, mostly domestic. And Japanese was positive low single digit in Q4 and full year with no major differences versus Q3, mainly solid local demand.

Okay. Perfect. And then secondly on Miu Miu, if I caught it correctly, you were saying that given the very tough comps, I guess, on a multiyear basis, you're expecting single-digit growth in H1 before an acceleration into H2. I'm just trying to square the math here because in theory, we do start to see more meaningful space contribution from 2026. I think you were mentioning 10 to 15 stores. So going from 20% in Q4 to single digit, and if you can also quantify a bit if it's going to be like a low, mid-, high single digit. Are you assuming very cautious volume assumptions to get to that kind of guidance target, please?

Yes, we are. Exactly what you're saying.

So you're assuming volumes decline in H1 for Miu Miu?

No, no, no. We are being cautious.

Okay. So you don't rule out the potential scope for positive surprises. That's what you're saying?

I think that time has arrived, and we are happy with the journey we have done and with the journey we have in front of us. But we are now in an everyday competition and gaining our opportunities and wins and battles. I think it's a journey that it's especially the first 1, 2, 3, 4 months pretty complicated because we were in a plus 60% range last year. And then it's a little bit easier. Obviously, on the other side, when you open a store, you also need to allow the business to go where it has to go. So we're extremely happy of the new stores we opened. I think that we didn't really make any real mistake. And let's go. I mean this is -- I think this is a very important year for Miu Miu and we are into it and on to it every single day of our life.

Okay. Perfect. That's very helpful. And last but not least, on Versace. I think in the press release, you mentioned that 2026 obviously would be dilutive to the group, and you expect '27 onwards to start to see some gradual improvement. If I remember correctly in the past, when you were executing the Prada turnaround, I think the EBIT margin pressure kind of lasted for a longer period of time because of the acceleration in investments. But is it fair? Or can you kind of outline the underlying assumptions you have here for Versace to already start to see margin improvement in 2027, unless I'm misunderstanding anything here?

Well, first, I mean, I would start -- it's Andrea Bonini. I would start saying that the two situations are very different. So comparing the Prada turnaround to Versace, and so would not really take that as a comparable. As we look forward, there's an element, of course, of reinvestment into the business, into the brand and accelerating on certain areas of spending that will move margins in a certain direction. At the same time, I mean, we will continue to look for synergies and efficiencies that should help in the opposite direction. And most importantly, as we always say, a lot depend from the top line. And on the top line, we will see from '27 on really the results of the actions that we will be taking.

On retail, at the same time on wholesale, you know that we already talked about the fact that we already said, we anticipate some sort of stabilization already starting from '26. So there's elements going in the two directions that make us believe that things are going according to plan. Yes, we can indeed start seeing an improvement from '27.

We are now going to proceed with our next question. And the questions come from the line of Daria Nasledysheva from Bank of America.

This is Daria from Bank of America. I actually just have one. On Versace, when will Pieter Mulier present his first collection for the brand? And what will be the time line of collections change given currently Dario Vitale collections, I think, have started to arrive online and in stores so that we just understand the cadence of the collection rollout.

As we said, the first show of Pieter will be beginning of next year. And on the collection first has to arrive and has to work on it, so I cannot answer to that question. Honestly, for sure, it's going to be different from the one of Dario.

We are now going to proceed with our next question. And the questions come from the line of Anne-Laure Bismuth from HSBC. Due to no response, we are now going to carry on with the next question. The questions come from the line of James Grzinic from Jefferies.

Yes. I just had two quick ones. The first one is, Andrea, can you be perhaps a little bit more specific on what keeping losses at Versace to double digit in '26 looks like? Are you basically gaining for EUR 80 million, EUR 90 million of losses basically? That would be helpful. And secondly, perhaps more fundamentally, you seem to have gone a huge supplier rationalization process in recent weeks. Can we perhaps understand what comes out of that process? What you'll gain out of that dynamic, please?

If I -- thank you. And Andrea, you always have to be more specific, but I suppose it's for me, it's Andrea Bonini. On the Versace, did I understand correctly the question that what's keeping it at that level?

No, it's more, if you can be a little bit more specific on what double digit -- keeping at double-digit level means. I mean, I appreciate you gave us that, the 1 month was a minus 8%, minus 9% contribution. But are we basically looking for '26 keeping that loss at EUR 80 million, EUR 90 million. Is that the quantum of magnitude?

Yes, no, but not going to be. I think we said a lot, and I'm not going to be more specific than that for today. And second question, Andrea.

So regarding our -- what you said about supplier rationalization, I think this is a journey that really began with COVID. And this has gone in parallel on one side in creating more internal manufacture infrastructure. We created three factories from that moment to today, and we are working on two other, one is renovation and one is a new one.

And on the other side, I think that in our journey, we have cut the weaker. We have given more work to more organized players. And I think this is the journey that has been the characteristic of our history since we were born. So I wouldn't consider this as a special year or a special moment. No, it's the journey we're doing.

We are now going to proceed with our next question. And the questions come from the line of Chris Gao from CLSA.

And hope the sound looks better now. So first question from me is regarding the performance during Chinese New Year, we have seen a very solid one. So just wondering if you see any differences between high net worth consumer as well as aspirational consumer? Do you see which category of consumer group can drive the growth more? Or actually they are both performing very well. And we can see you have been launching quite a good line of product expansion into home categories, et cetera, with entry level price. So we wonder if we actually are expanding more categories that can maintain the dialogue with aspirational customers in the coming year.

So first of all, I take the opportunity to say that we have been really happy and grateful to all our Chinese and Asian teams during this last 6 weeks. They worked day and night. And I think that we have been successful on all lines. This is what I'm happy about.

I mean, we have been very successful on new customers, which is something that we were not seeing for quite a while in China. So that was a good one. And we improved on all our segments from VIC to aspirational customers.

And what was good about this Chinese New Year is that we had a positive outlook from travelers and from locals before Chinese New Year. So I don't want to say that China is back. I don't want to say that, but the steps and the progression have gone in the proper direction.

So my second question is still about Versace. So it is actually about the progressive investment -- improvement in the year of 2027. So just want to understand more about this progressive improvement. Does it mean that Versace brand will go back to the positive growth trajectory in terms of sales? Or will we actually see the profitability improving to breakeven or actually profit making? So how can we expect a mid-term outlook, especially regarding the improvement in 2027?

I think at the moment, honestly, to have a clear outlook on the next year, Versace, especially in China's market is too early. And as we said, we are looking to reduce losses next year and to improve marginality and for sure, start the journey of steady pace to grow with Versace. But at the moment, it's too early to have more precise outlook than that.

Okay. So congratulations on the new journey with Versace.

I think we have one last question and then -- so let's move with that.

We are now going to proceed with the next question. And the questions come from the line of Paola Carboni, Equita SIM.

Most are about Versace. I will start asking you if you can touch base on what are your plans in terms of supply chain for the brand? What are you going to change in this respect and the possible integration with your supplier base?

And the second question still on Versace. If you can elaborate on what are your plans in terms of category mix, if you envisage any change in the architecture of collections already with Pieter next year?

And the third one, on the profitability of Versace, whether your stance on margins for full year '26 also takes into account of some write-down of inventories which would clearly not be probably repeated to the same extent in full year '27. Then I have another one on Miu Miu. I will go ahead after your answers.

So it's obvious that we will follow with Versace the same attitude we follow with our two brands. So a vertical integration -- vertical organization for what regards all face activity -- clients face activities. So total independence and verticalization and responsibility from that point of view. And we will use our Prada Group platform for all potential and possible manufacturing.

Obviously, we have already started planning it and probably even first step of execution it will take time because, I mean, nonetheless, we also have some IT things to be done as well. So it will take some time. But for sure, all the supply chain will be integrated inside the Prada Group facilities.

In terms of categories, I think that it's too early. I mean, it's obvious that Versace is incredibly strong and has a huge heritage on ready-to-wear. So -- I mean, to improve on the other categories, from a theoretical point of view, it's easy because we are really starting from small numbers, and we will see how and when -- how the different collections will evolve.

In terms of margins, Andrea, I don't know if you want to answer.

No, but I wouldn't add anything in the sense that, look, when we wanted to give an order of magnitude and the order of magnitude is that also take into consideration, as we always do and when we budget and so on, I mean, what we need to do on the inventory. At the same time, there may be other one-offs that come up or not. But the point was more to give you, as I said, I mean, an order of magnitude of what we're talking about. I believe you had, Paola, an additional question, correct?

Yes. Another question is about Miu Miu. My feeling is that you have turned a little bit more prudent on the expansion of the network. My understanding before was that the pace of new opening could have continued for maybe a few years more. If my feeling is right, I'm just wondering what is probably driving this stance from your side? Is a matter of overall market conditions? Is a matter of competitive environment in...

No, no. I will -- I think you got it wrong at the beginning. No, no. We gave you the opportunity that we had and we still have and we wanted to have an increase last year of a 10 to 15 stores and closing some and the same thing we're going to do this year and closing some and enlarging others. So nothing has changed.

I think we are finished now. So thank you, everyone, for attending. And hopefully, next time, we will discuss in a more peaceful world.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

Good afternoon, everyone, and thank you for joining the Prada Group's 9 months 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 2 of our presentation.

With that, I will hand over to Andrea Guerra.

[Foreign Language], Andrea. [Foreign Language] 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'll talk about.

We all know by now, hopefully, that we are all working in a different world and in a different industry. To continue with this rhythm, after 2 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, and we are happy about this.

Prada performance, I would define it resilient with a twist. That is, we have seen a negative sign in the second part of Q2, as we all remember, and in the very initial part of Q3. Then we have had -- we have been observing a slow and continuous and steady improvement of Prada 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, product together with our people in the stores across the world. So 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 '23. We obtained another solid quarter. And what is good and nice to observe about Miu Miu is that our attitudes, behaviors are growing with the dimension of the brand. And I think 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.

Thank you, Andrea. Starting with net revenues by channel. In total, the group recorded net revenues of EUR 4.1 billion in the first 9 months of the year, up 9% against the same period last year at constant FX. 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 plus 18% in all quarters.

Wholesale was up 4% in the first 9 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 independents. Royalties continue to grow, up 11% over the period, supported by both eyewear and beauty.

Exchange rates had a negative impact on group revenue of circa 260 basis points during the first 9 months and 470 basis points over the quarter. And the impact is expected to be even more meaningful in Q4.

Turning to the next slide, retail sales by brand. All our brands continue to show healthy trajectories. Prada delivered a resilient performance, minus 2% in the 9 months with the third quarter edging closer to flat, supported by all key regions. Miu Miu reported sustained growth throughout the period at plus 41% and plus 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 9 months at plus 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 9 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 9 months with Q3 at plus 20% in further sequential acceleration. Japan grew against exceptional high tourism in 2024, delivering plus 3% over the 9 months period. Q3 was down 1%, but improving quarter-on-quarter, driven by solid local demand and increased traveler spending. Lastly, Middle East delivered a solid performance, up 21% in the 9 months, with Q3 moderation at 10% on high comps.

With that, I will hand back to Andrea Guerra for some closing remarks.

[Foreign Language], Andrea. Now we're entering in the usual holiday period and not only, I think in the next 3, 6 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. And we have started reaping fruits from all our investments on people, organization, processes and retail.

Our flexibility and velocity will obviously continue to be our -- one of our primary characteristics. We have entered the usual Q4 where the last 6 weeks of the year become paramount. In these 4 weeks of October, Prada [indiscernible] continue to improve. Miu Miu continues its journey and obviously, it's long-term normalization. So we are happy so far.

With this, [Foreign Language], and we now turn the word to you. So I will give back the word to the operator.

[Operator Instructions] We are now going to proceed with our first question. And the questions come from the line of Chiara Battistini from JPMorgan.

So my first question is on Versace. Now that the deal has closed, I was wondering if you could share your initial take on sort of your first -- the first priorities that you have identified, investment needed that you see, distribution strategy from here? Any initial take you can share with us on Versace integration, please? That's my first question.

Thank you for the news, but the transaction is not closed. No, no. We're still waiting authorizations, hopefully, in the next 15 days. So it's not closed.

Okay. My bad. I thought it was -- okay. Second question on Prada, and the improvement you've seen -- that you mentioned you've seen through Q3. And 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 it's really the company-specific initiatives that are supporting that ongoing improvement?

So I am not observing very different things happening in the world now. What we have seen in the last 3 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 less Americans in Europe and obviously, nowadays are less influent on our performance in Europe. And we obviously had noticed that after a strong tourism inflow in Japan, strong, it's probably even small, but huge. I think that 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. And I think we have been pretty resilient there. And now we're seeing our normal journey and performance.

In United States, I think on some part of it is Americans that have traveled less. And 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 United States, where we decided to be a little bit more aggressive in changing behaviors, attitudes and culture. And I think we had a great reaction by people that have been long time with us. We had some new entries, and I think that we are accelerating in North America. So this is how I see it so far. Always, and I always will repeat, in Q4, October has a very little meaning compared to the last 6 weeks of the year.

Indeed. And maybe last question, just a clarification on the wholesale trends in Q3 was a very [ big ] number. Anything exceptional in terms of timing of shipments, and I guess, we should not -- yes.

Nothing. No -- I mean it's -- sometimes it's a little bit up, sometimes it's a little bit down, but there is no -- nothing.

And the questions come from the line of Chris Huang from UBS.

I have 3, 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. So could I please ask for some flavor as well when it comes to the Chinese, Americans, Europeans and Japanese? That's my first one.

Okay. Chris, Andrea Bonini. So all clusters were positive at group level in the 9 months and Q3, including Chinese. Leaving aside Miu Miu. 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. But 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 9 month, Q3 positive, and again, better quarter-on-quarter driven by local demand. The North Americans was positive low single digit in the 9 months, improving in Q3 and sustained by domestic demand. And on the Japanese, positive low single digit in the 9 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 because I remember earlier in the year, we were talking about, maybe in H2 this year, we'll 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? Should we expect something to kick in, in Q4? Or is it mostly going to be in 2026?

No, no. In -- we have executed what we were thinking on Miu Miu. So we have something like 10 or 12 stores more, and we have enlarged some square meters in another 8 to 10 stores. So that execution, that plan has moved as planned.

On Prada, we have taken a more cautious journey. More cautious, I mean that is we want to have stores in other great locations, but we want also to close stores that have got no meaning. So yes, we had a couple more. But in reality, in the next 12 months, probably with even 24 months, with Prada, we will have 6, 7, 8 more, but probably 10 less or 12 less.

So we constantly -- I think that our journey with Prada will continue to be a reshuffle. And I think that there is an opportunity to, again, to be even more productive. I think that Prada is being more productive nowadays, even more productive going forward. So we keep on with our 80%, 85% like-for-like and 10%, 15% on new space or enlarge space.

Okay. Perfect. And lastly, on margins. I know this is a revenues call, but it will be very helpful to hear about what you're thinking about the full year margins. I think you've always stated the ambition of delivering a steady margin improvement into the midterm. But 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 full year basis, margins to see some expansion? Or should we start to see a little bit of more investments into the year-end and hence, putting some pressure on your margin development?

Nothing to add, to be honest, I mean, vis-a-vis what we said in H1. The only part of your comment, Chris, that I didn't get is when you say, did you mention light comps in Q4, if -- I don't know if I got it...

No, I said tough comps in Q4. In light of the tough comps, sorry.

Yes, yes. So yes. No, because indeed, I mean, I was going to say, no, they were not light because, again, 2024 for us was very consistent in terms of group growth because it was stable at plus 18%, with Prada higher in Q4 and Miu Miu moderating a little, but we're still talking plus 84% in Q4 '24 for Miu Miu.

So nothing to add on the margin front. I mean, so far, we are on track to deliver on what we always said. But as Andrea mentioned earlier, Q4, from mid-November onward is really, really relevant, what happens then. And yes, we have a bit more of -- in terms of phasing of advertising, communication is a bit more heavy. But as I said, I mean, so far, nothing to highlight.

And the questions come from the line of Ed Aubin from Morgan Stanley.

So Andrea, Bonini, so just to follow up on the margin, apologies. I know it's -- again, it's a sales call. But 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 EUR 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 '26, to what extent it could be or not be an issue for you? So that would be my first question.

Ed, look, I would only say that for 2025, the hedging strategies will do the job. So not so much an issue. 2026 maybe -- clearly, I mean, maybe a headwind. But I think we all know also that the situation can be very volatile when it comes to FX. So we shall see.

Okay. Understood. And then the next question, sorry, I don't mean to allocate the question, but it's more for Andrea Guerra, is that you've been asked, Andrea, for 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. But by raising prices quite aggressively, some of your competitors over the past 5 years have kind of provided oxygen for more aspirational brands to grow.

And in terms of your product offering, and I know you got the question in the past, but just wanted to get an update from you is 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 and leather goods? I know you guys have been relaunching in nylon, also the Croisière bag and so on. But at GBP 1,500 per bag for the Croisière, there is -- people will debate if it's accessible or not. But yes, on the leather good more specifically, category when it comes to bags, if you could comment on the pricing architecture and if you're happy with what you have now?

Obviously, the 2 brands are different. My philosophy is not changing. That is, on one side, we have to be very solid on our entry price, which does not mean to reduce entry price, but to keep it and to be credible on our entry prices. So to have an offer there. So 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. So 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.

Then there is a world where I think that we have been not serious enough and maybe not courageous enough sometimes, which is high price. So -- and we're credible. And this is what we are proving ourselves. And we had an exceptional last week in New York presenting our high jewelry Couleur Vivante collection. And we had a success that somehow also surprised many of us, not all of us. But 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. So I think that in terms of price and mix, I would give you this answer divided into 3 segments.

Okay. Wonderful. And so the last one for me, and apologies, it's a bit of a big picture question on the sales call, but I think investors would be really curious to have your views on the topic. And the topic is there is a bit of a debate in the fashion industry and amongst investors if kind of the so-called fashion pendulum is shifting away from kind of more minimalist to a bit more maximalist and a bit more color and less understated and so on and so forth.

I'd 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. But 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 the -- which are shows, which are allowing people to express, people to deliver the future, people that are giving their sense of that moment. Then there is the world and life. And the 2 have to be connected. The 2 sides have to be on tension.

But nowadays, I would say that I don't see major pendulums. What I think that it's proving to be very correct and to proving 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.

And the questions come from the line of Charles-Louis Scotti from Kepler Cheuvreux.

I have 3 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?

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, we go upwards or again downwards, but it's a plateau. It's a plateau now of 4, 5, 6 months. And if there are any sign, what I would call weak signals, I would consider them more positive than negative, but very weak signals.

Okay. 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 Zegna on TOM FORD?

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

Okay. And last question, I know it's a bit premature because you have not closed the deal on Versace. And 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 EUR 800 million for fiscal year ending March '26. And how do you assess also the medium- to long-term target that were previously set by Capri?

So we have access to the same public figures you have. And be careful to not mix up dollars with euros, because they are reporting in dollars so they being an American company, okay? So -- but we have the same access you have. We are competitors, so authorities are very precise on this.

Okay. So you have no numbers to communicate?

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

And the questions come from the line of Chris Gao from CLSA.

I have 3. Firstly is a quick follow-up on China's sequential improvement. So basically, in the third quarter reporting season, some of your peers highlighted the improvement in China is mainly on traffic and volume. So 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, it's conversion or price or mix? And also, if there's any categories that have been seeing more explicit improvement, is it ready-to-wear or bags, accessories seeing more improvement?

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. And this is what we stated before, and this is what I will repeat now. Holidays were a little bit better than what we expected. And 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.

Okay. So the second question is regarding the acceleration on American cluster. So just wondering if there could be any highlights on if Prada core brand is improving more on -- or if Miu Miu brand has been mainly driving the acceleration for Americans?

Always keep in mind that Miu Miu in United States is marginal. So Miu Miu is constantly increasing. And 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.

So the sequential improvement is obviously coming specifically from Prada. I mean both are growing, but Prada is big, is much bigger.

Okay. Understand. So maybe also from a retail matrix perspective, what could be the main supporting on the Prada core brands recovery in the U.S.? Is it traffic or it's more coming from the price/mix?

Again, I mean, sometimes -- all my conversation on Prada was to allow you to understand where we are. I just said that, I mean, traffic is not helping that we are reaping the benefits of our retail investments and that our product launches were good. So 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.

So -- basically the last question, yes, last question is regarding the development of other categories like jewelry. Right now, we see gold price has been going in a very good trend. And we also know that Prada has been launching very good sustainable gold collections. So just wondering how the jewelry categories is performing.

Again, I will repeat, we just launched a new collection. The name is Couleur Vivante. We had a fantastic first week in New York, and now we will tour the most important cities in the next 3, 4 months with this collection. And we're very proud of it. We're really very proud of it.

And the next questions come from the line of Luca Solca from Bernstein.

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? And are you sort of planning anything that could help you ensure your fair share of consumer attention? And are you at all thinking about the environment that could become more competitive?

I think that this is what will happen. This is what I'm saying when I'm saying that the next 6 months will be a change. So first of all, with all this [indiscernible] happening, I hope that we will also attract some traffic back. So we will all be benefited by some more traffic, which I think we would all love. And I think that much of this is also trying to help this industry to come back to be more desirable.

So our fair share, I can tell you that during the shows, we had our fair share. So -- I mean, we were not a novelty. We were not something new, but we had our very similar fair share of contacts, gratitudes, happiness and reactions to our show. So the first step of that was very positive. And the second, I think that we are very, very focused on the first 6 months of next year, very, very focused.

Understood. My second question is on eyewear. Prada, the Prada Group, together with Armani is 1 of the 2 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? And what do you foresee in this important license of yours?

So 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 and 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.

And then 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 Omotesando. Is 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? And 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. And before, I was saying that maybe a year ago, we're also considering some increase in numbers of Prada. Today, I think there is a [ remix ]. Our long tail is too long. And on the other side, the benefits we are having, especially nowadays where we are including so much hospitality, we're including privacy, we're including love, these bigger places are what we need. So we are working on at least 5 or 6 projects. And on the other side, we're also working on trimming the long tail as you were calling it.

And the questions come from the line of Thomas Chauvet from Citi.

I have 3. The first one, on next year's...

We don't hear you. We don't hear you. You're very disturbed.

Is it better now?

Yes.

Apologies for that. I have 3. 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. But beyond that, it looks like the total OpEx next year is expected to grow at around 11%, 12%, so likely to grow faster than sales. You talked about how your efforts are starting to pay off. So 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.

Thomas, I wouldn't get into that now. I mean let's talk about 2026 as we always do when we report the full year results. Also, consensus at the moment, I believe, maybe not entirely accurate due to the fact that some may already have included Versace, some others may have not. So let's -- as I said, let's push this discussion to later. And let me reiterate again that vis-a-vis what we always said in terms of priorities, but also how we want to handle our profitability, nothing new to report.

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

The color I'd give is that outlet for us has remained a bit of a drag. So 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.

And finally, on beauty. I think earlier this week, L'Oréal CEO said Prada had reached over EUR 500 million in beauty sales only in 4 years, I think after you began the partnership, I think it was 2021. How much bigger do you see the opportunity there considering -- Nicolas Hieronimus also said that Saint Laurent was achieving nearly EUR 3 billion of sales, so 6x more than Prada for a fashion brand, which is quite smaller than the Prada brand.

And just would be very helpful, within the royalty line, you had 100 million in 9 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?

So the beauty market is obviously much, much bigger than the eyewear market. We have come to the beauty market probably at last. We're gaining huge ground. The launch of Paradigme, 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 a question to them if they see us larger than Saint Laurent in the long term or not.

But having said that, we are constantly growing. We are not in a hurry. Luxury is patience, and we love the work we're doing together. And I think that we have a long journey of growth together. And during our -- during Q3, I think, we also launched the first Miu Miu fragrance. And even that was [ Miu team ] -- even that was a great success. So the only thing I can say that is we are very happy of the partnership with L'Oréal.

And 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 want to share?

No, it's not something that we disclose, but you said it, eyewear is a bit bigger, the share.

Okay. Only a bit bigger. Okay.

And the questions come from the line of Oriana Cardani, Intesa Sanpaolo.

I've got 2 ones. The first one is on pricing policy for next year. Do you expect price increase in 2026 to be lower than in 2025 or similar? And do you plan differences among the regions?

We have kept a kind of method, a rule with 2 moments of the year where we do a kind of maintenance on prices and maintenance of differences between regions. And we -- I think we will keep on doing similar things in 2026.

Okay. And 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?

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. So I wouldn't argue too much. And 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 on -- an acceleration on leather goods.

And the questions come from the line of Liwei Hou from CICC.

I have only one question. Building on what you said, Mr. Guerra, China may not have as fast a growth as before. That's my understanding with plateau. So with that judgment, I wonder about Prada Group's future commitment to China, especially when the new generation comes in. And more specifically maybe, I want to understand our license or lease agreement with Rong Zhai. I've read about it, we have signed a 10-year agreement in 2011. So I wonder, have we extended that? And are we going to continue to invest heavily in China going forward?

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. And Rong Zhai, our 17th century building in Shanghai has become -- for Prada, it is and it's becoming every day more our place, our epicenter. And I would suggest every one of you, when you're in Shanghai, to go to the Prada cafe, to the Mi Shang cafe in Rong Zhai. And I would rate it the most beautiful cafe in the world.

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

[Foreign Language].

Good day, and thank you for standing by. Welcome to the Prada Group First Half 2025 Results Presentation. [Operator Instructions] Please note that today's conference is being recorded.

I would now like to hand the conference over to Mr. Andrea Bonini, CFO. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining Prada Group's First Half 2025 Results Call. I'm delighted to be with you again. Alongside me today are Mr. Andrea Guerra, Group CEO; and Mr. Lorenzo Bertelli, Group CMO and Head of CSR. Mr. Guerra will start today with highlights for the first half of 2025 and a business update, followed by Mr. Lorenzo Bertelli with an overview of our marketing activities and ESG initiatives. I'll then present our financial performance, before Mr. Guerra signs off with some closing remarks.

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 that could cause the actual outcome and returns to differ materially from such statements. Please refer to the disclaimers included on Slide 2 of our presentation.

With that, I will hand over to Mr. Guerra.

[Foreign Language] We have been very focused during this first 6 months. We've been working hard. For sure, another complicated period for our industry. We, as Prada, are reporting to you what we feel being a solid and healthy set of numbers. Solid because yet we have been able to foster our relationship with our consumers worldwide, and we've been able to register a double-digit growth, mainly almost totally like-for-like.

We have scored a growth of 10% against the period for Prada, a very strong comparison and a continuous journey for Miu Miu. We had a significant growth difference for Prada between the 2 semesters in 2024. We have just finished the toughest comparison. As I stated at the beginning, we have seen probably, and let me repeat, probably the worst, an industry on one side that is resetting after 20 years of almost constant growth. And on top of that, a cyclical downturn basically led by tourism.

This should be quite a special period in this year. On one side, devaluation, on the other side, geopolitical, is now turning to the fact that there is less American tourists in Europe and especially during spring/summer, they are fundamental for the luxury business. And on the other side, we have a complicated comparison with the huge spike of Asian tourism in Japan during spring/summer 2024. As a reminder, last year Q2, Prada Group in Japan finished with a plus 65%. So it was a solid semester.

Why healthy? Because on one side, I think we have been continuing working diligently on efficiencies, on productivity, on being able to increase our numbers per square meter per single people in the store. But on the other side, we constantly continue to invest on our people, on our brands, on our stores, our new collections and products. And at the end of all of this, we have been able to keep up with the strong profitability. So in one sentence, I would say, yes, it is tough, but so far we have been able to follow up on our long-term journey.

Business-wise, looking at Prada specifically, I would give you 3 bullet points. First, the brand, the shows, image, foundations, pillars are all loved, also in this resetting of the industry. Two, we have invested and worked incredibly hard on new products and collections that we have been launching and launching right now. We feel that the product structure of these collections and the price structure of this collection with more stretching between entry price and higher prices, we feel that these collections are very correct in this moment of the industry.

Three, we have been elevating our relationship with our consumers, our hospitality day after day. The last example of all of this is the opening of our Man's store on 5th Avenue, which allows men to enjoy, invest, dress up on a kind of dream lounge where there are more than 250 SKUs ready for make-to-measure and make-to-order. So really going through a journey of uniqueness and personalization.

On the other side, Miu Miu. Miu Miu is on a journey. The link -- the great deep link between the brand and the Miu Miu consumers is even stronger and deeper compared to 6 and 12 months ago. We had a very well-balanced growth between products and geographies. Huge investments and results are paying off.

As we said, we wanted to balance and rebalance the European region, and that European mission is going on with great results and achievements. And I think that the symbol of all of this has been the reopening of our New Bond Street boutique, a store made of contrasts. Post-industrial on ground floor and a wonderful Salotto Club on the second floor, where you can enjoy all our unbelievable treats by our wonderful staff.

Having said this, I will ask now Lorenzo to take over, talk about our brands in more deep and even giving you some update on our sustainability journey.

Thank you, Andre, and good afternoon. I would like to begin by highlighting Prada's marketing and communication initiatives during the semester, which enabled the brand to maintain strong relevance. Both Menswear and Womenswear fashion show were met very positively, affirming Prada's creative strength. Campaigns such as Ten Protagonists featuring Carey Mulligan, Prada Re-Nylon and Days of Summer further enforces the brand's cultural resonance. Signature events, including Prada Mode, Prada Frames, The Sound of Prada continue to deepen Prada distinctive identity on the intersection of fashion, art and architecture. These creative initiatives enable us to collaborate with renewed and inspiring personalities such as Theaster Gates, Kazuyo Sejima and Formafantasma. Lastly, new experiential venues such as Mi Shang Prada Rhong Zhai in Shanghai, a unique all-day cafe and restaurant conceived by renewed arthouse director, Wong Kar Wai, offered elevated and immersive expression of the brand universe.

Moving on to Miu Miu. Miu Miu distinctive exploration of femininity continued with the impactful Fall/Winter 2025 fashion show, which was met with highly positive reception. The latest Leathergoods and L'Été campaigns, celebrated the brand's aesthetic through the distinct gaze of celebrated photographers. The first half of the year also marked the second iteration of Miu Miu signature cultural format, including Tales & Tellers in New York, Literary Club in Milan and Summer Reads in cities around the world. The brand collaborated with 4-time Academy Award winner director, Catherine Martin, with short movie, Grand Envie, accompanied the unveiling of the new Miu Miu upcycle collection.

The brand also fostered the ongoing collaboration with New Balance, partnering with tennis champion, Coco Gauff to explore the boundaries between fashion and sportswear. Finally, immersive in-store experience linked to the Miu Miu Gymnasium and Miu Miu Custom Studio collection provided new ways to elevate the customer journey and expanded the Miu Miu community.

We now turn to ESG, an essential driver of the group's sustainable long-term growth. As part of our environmental strategy, we advanced the transition to lower impact raw materials and made progress in responsible chemical management through targeted training programs for both supplier and internal operation teams.

Significant investments were also made in full end-to-end traceability while assessing upstream impacts on biodiversity. To support our people-centric vision, we implemented a global DE&I road map, which includes People Culture Forums and the rollout of our DE&I awareness training program. We reinforced our commitment to women representation in the top and senior management roles and progressed with salary review to addressing the gender pay gap.

Our dedication to ocean literacy and preservation was further enhanced through the creation of "SEA BEYOND - Multi-Partner Trust Fund for Connecting People and Ocean”", launching in collaboration with UNESCO to mobilize financial resources from a diverse range of partners. Moreover, in April, we inaugurated the SEA BEYOND Ocean Literacy Centre in Venice, thus offering the dedicated space to promote knowledge and understanding of the ocean.

And with this, we will now hand over to Andrea Bonini for the financial review. Thank you.

Thank you, Lorenzo. Starting with Slide 12, we closed the period with a solid P&L with healthy growth and some profitability. The group reported net revenues of EUR 2.74 billion, up 9% versus H1 '24 at constant FX. FX had a drag on net revenues of 160 basis points, leading to an increase of 8% at current exchange rates. Retail sales for the period reached EUR 2.45 billion, up 10% versus H1 '24 at constant FX. EBIT adjusted reached EUR 619 million in H1 '25 with margin of 22.6%, showing steady profitability versus H1 '24, notwithstanding higher investments to strengthen brand desirability in our retail and business infrastructure over the long term. At the end of June, cash flow from operations reached EUR 696 million and net cash position stood at EUR 352 million.

Moving to the next slide. The retail channel delivered a solid performance in the period with sales up 10% versus H1 '24 at constant FX of which 8% in Q2, driven by like-for-like full price sales. The contribution from additional space remained limited in the semester. Wholesale was down 1% versus H1 '24 and down 7% in the second quarter. The channel was impacted by some degree of phasing, but our strategy remains unchanged as we maintain a selective approach with independents. Royalties were up 10% in the semester with growth supported by both eyewear and fragrances.

Turning to the next slide, retail sales by brand. Prada retail sales were down 2% in the semester, showing good resilience in the challenging context and against high comps. As we will see later, the performance in the second quarter was mostly impacted by Japan and Europe due to lower touristic flows. On the other side, Americas and Asia Pacific did sequentially better. Miu Miu continued on a trajectory to sustainable growth with 49% retail sales growth in the semester and 40% in Q2. Growth was well spread across all categories and regions. The brand now contributes to 32% of the group retail sales versus 23% in H1 '24. Good performance also at Church's, up 4% in the semester and 6% in Q2.

Moving to the next slide. In H1, the group achieved solid growth across all geographies, notwithstanding the headwinds faced in Japan, particularly in Q2. Retail sales in Asia Pacific were up 10% in the semester with similar trends between the quarters amid broadly unchanged conditions in the region. Europe was up 9%, with Q2 impacted by lower touristic spending on tough multiyear comp basis. Local demand remained fairly stable over the period. Good progression in the Americas with Q2 improving on both local and traveler spending.

As for Japan, the region decelerated against exceptionally high touristic flows in 2024, especially in Q2. And as a reminder, the group registered plus 65% in Q2 '24 and plus 48% in Q3 '24. Domestic demand, however, proved resilient. And lastly, the Middle East delivered the best performance of the semester, up 26% in H1 with balanced performance across the quarters.

Turning to next slide. Gross margin was at 80.1% in the semester, broadly stable year-on-year. OpEx, excluding nonrecurring expenses mainly related to the acquisition of Versace, increased by 9% at constant FX. Mostly driven by discretionary consumer-facing activities, variable expenses, including labor and rent as well as the D&A impact resulting from the step-up in CapEx. We've been focused and disciplined on fixed costs. And as a result, the group generated an EBIT adjusted of EUR 619 million, up 8% against H1 '24, corresponding to a margin of 22.6%, in line with H1 '24. Finally, net income reached EUR 386 million, in line versus the same period of last year.

CapEx for the first half of 2025 was EUR 247 million as we kept investing across all the key strategic areas. There is a phasing element in the comparison with H1 '24, in which we had spent roughly 1/3 of the full year CapEx, excluding real estate. And this semester, we are at 40% to 50%. On the retail side, we continue to elevate the network and enhance the in-store experience, and we had some landmark new openings, as you heard from Andrea. On the industrial side, we continue to expand organically and inorganically our infrastructure, investing in new facilities for leather goods and ready-to-wear and improving and expanding others. And we made steady progress on digital transformation, which takes a good portion of that middle block.

Moving to the next slide. Net working capital increased by circa EUR 40 million year-on-year to reach EUR 819 million with incidents on net sales declining from 16% to 15%. And if we look at inventory specifically, we have reduced our DIO year-on-year by circa 1.5 months. Lastly, the group retains a solid balance sheet, closing the semester with a net cash position of EUR 352 million, thanks to healthy cash flow generation. The one item that I would call out for comparability with H1 '24 is taxes because in H1 '24, the payment shifted to July due to calendar.

With that, I will hand over to Andrea Guerra for his closing remarks.

Thank you, Andrea. Now we are happy with the first 6 months, and we have begun second half. No major changes to be reported, expecting some cyclical negatives to finish up as we said before. We have gone through a period where we have refused to imagine that the industry was resetting. Then we have had a lot of fears and a lot of people that didn't know exactly how to tackle this new world. Then we understood.

Today, we are simply navigating in this new world. This is the new world. We are ready for this. We're working in this world today. We needed to have collection correct for this new world. Collections that have a soul, products that are able to give you emotions. Products and collections that are able to satisfy, inspiring consumers that today are a little bit weaker and very wealth people that are looking for unique and personalized products. We needed to upgrade our infrastructure. We needed to upgrade our systems, and we are, I think, today at par.

We're not looking for shortcuts, keeping our strong grip on full price. We are also every day on our efficiencies. Again, every 3 months looking at everything we can do to be lighter and more agile. So we want to be more desirable. We want to be unique also in this very complicated new world. Can we forecast what will happen in the future? No, but we can plan even better and being very agile moving right and left when things happen.

Thank you for listening, and we will open now the word to you. And if you have questions, comments, doubts, here we are. Thank you very much.

[Operator Instructions] And your first question comes from Chiara Battistini from JPMorgan.

The first question would be on -- maybe if you could share some more color and specific comments on the American and Chinese clusters in Q2, especially for the product brand. So putting together the domestic and the tourist, how these 2 clusters evolved sequentially in Q2?

Second question, you mentioned that so far in Q3, nothing to call out that is different versus Q2. The comps do get easier in Q3 versus Q2. So how would you think we should be approaching or how should we be thinking about the easier comps in the current environment?

And then just a clarification on the wholesale swing that we saw in Q2 versus Q1. The comps were indeed very tough in Q2. So is there anything else besides the timing of shipments that we should be thinking about? And what's your outlook for wholesale for the second half, please?

Maybe Andrea can take the first one on clusters.

Sure. Chiara, on clusters, starting with the Chinese and with reference to the Prada brand. Chinese in Q2 was a bit softer than Q1, but no major changes, I would say, was what I would call subdued but stable local demand and softer travel transactions. North Americans was positive low single digit in H1 with local demand improving, but again, travelers weakening, as we already pointed out.

And then we had Japanese, I will also add, so we do the complete picture as always. Japanese positive low single digit in H1 with no major differences quarter-on-quarter. And Europeans that was negative low single digit in H1, a bit softer quarter-on-quarter, driven by traveler transactions and broadly stable on local demand, and that's the picture on clusters. On the easier comps, I'll pass it back to Andrea.

So when I say nothing to call out, I mean, if I look to Q2, we had a worsening and then improving quarter. And yes, there are easier comps. Yes, I think we have stronger collections probably even ahead of last year in terms of timing. Yes, Japanese situation and American tourist situation should flatten out. So I could be tempted to saying that we have seen the worst, but I don't think that, that could be a proper way of putting it. I think we need to prove it, and we need to sequentially prove it.

There is no other reasons today to see a situation which can get worse than this. So we are working fairly positive looking to the next periods. But every day, things are changing. Every day, every week, things are going left and right. So we keep a very prudent positioning.

Last one was on wholesale, where there's really nothing to point out besides indeed the -- some timing, some phasing effect on deliveries, which we would expect to recover in the second half. And therefore, end the year in line with our expectations and with the usual controlled approach, but substantially stable.

Your next question comes from the line of Edouard Aubin from Morgan Stanley.

So I guess I'll do them one by one as asked. Sorry, Andrea Guerra, I guess, on the Prada brand, if you could come back on the new collection that you're hopeful that it should be doing well. Could you please come back on kind of the timing of the launch when it's going to be fully available in the stores? And then you mentioned in terms of the -- more specifically in terms of stretching the price range and so on. Are you playing more with the mix? You seem to indicate that you didn't think it was -- pricing was an issue at the Prada brand. So are you introducing a greater number of kind of cheaper, more accessible items there? So that's going to be my first question.

So regarding the mix, I think that the mix is an obsession. And we have a great opportunity to sell at higher prices. I think that, that has to remain our primary objective. I think we need to prove better up there. And I think that we have been improving. We've been improving in the way we liaison with those consumers, the way we have developed all our new stores, the level of hospitality that we are offering today. So I think that, that's the major part.

On the other side, I think that -- it's not to lower enterprise, but it's to remain credible at enterprise. I think that, that is what we have been doing, and this is what we have been doing this time even more. So I think that we have a well-balanced collections. And this is why I feel good about what we are offering to consumer regarding Prada Women and Prada Men.

Got it. I guess so my second question would be for Andrea Bonini. On the lack of operating leverage in H1. So you grew close to 9% like-for-like, I guess, right, because you opened very few stores. And yet you had no -- you posted no operating leverage. I understand that advertising went up a bit as a percentage of sales. But hypothetically, assuming that you would continue with the same like-for-like trajectory in H2, should you be able to show some operating leverage? Or if you can come back on kind of what happened in H1 and what you're expecting for H2?

Edouard, we're pleased with the trajectory. Look, I think it's -- again, it's all -- it all depends on priorities. And it was a stable profitability level, but in the context of an increase, which is more than slight in terms of customer-facing activities in the context of ongoing retail investments that, of course, have an impact in terms of D&A, have an impact in terms of rents. And as we always said, that is the priority to continue to invest for the long-term growth, maintaining, we also always said, ideally a certain trajectory of progressive margin expansion on a full year basis. And therefore, as I said, we're pleased with an EBIT that has expanded by 8% in the first half, year-on-year. And if we can maintain this level of top line growth, yes, we would also be able to maintain the trajectory that we talked about.

Okay. So -- okay, fine. And then maybe the last one is on Versace. So in terms of -- I know you're restricted in terms of what you can say, but could you just update us on the timing of the closure of the transaction? And also in terms of your battle plan and more specifically in terms of the management positions at Versace? Do you already have a good idea of who's going to do what there?

And then lastly, on Versace, again, you're not going to share with us obviously any figures. But philosophically, would you be ready to make the tough decision quite upfront, quite quickly in 2026, for example, rationalizing your outlet network? Or would you kind of spread out kind of the rightsizing of the store estate and so on and so forth? Just of how you're going to go about it in terms of turning around the brand.

So as usual, I mean, Versace is not our company. And therefore, it's very unusual to give comments on other people companies, and I will not do that. We're getting ready for everything you're talking about. How long it will take? It depends not on us, but it depends on authorities. We have an estimate that tells us that between September, October and November, those 3 months, we should be able to finish up and start.

So at the beginning of 2026, we will be able to share much more information regarding what we're going to do. I think that when we signed the agreement, we said that it will take time, which means that we need to do things carefully. And on the other side, I think that the other big thing is not to kill the baby while you cure it, which I think it's the other important aspect. So we will go as fast as we can and as prudent as we can in terms of branding and identity positioning.

Your next question comes from the line of Erwan Rambourg from HSBC.

Congratulations on the results, and I'll do them one by one as well. First, on the Prada brand itself, despite being slightly negative on retail, you are gaining quite a bit of market share. I understand you've parted ways with Gianfranco D'Attis. And I believe, Andrea Guerra, you are -- I don't know if it's the right term, but babysitting the brand for now. Do you -- what do you envisage in terms of maybe changes, little tweaks, either short term or long term to continue to accelerate in terms of market share gains for the main brand?

I think that is -- it's tough to imagine my job as babysitting the Prada brand, which needs much more than that. I think that we have many different opportunities. I think that the work done so far has been the proof that there is an opportunity for Prada to gain, I think, what deserves, what Prada deserves. And there is -- I mean, we've been working for the past years, but the journey is still long. The journey is still long on retail KPIs. The journey is still long on Prada Men, where I think we have a huge plateau and a huge opportunity.

I think that our great strength on ready-to-wear men and women is allowing us to have yet today a crowd in our stores. And it's -- there are many different things that we are doing that we will continue to do. And I think that most of all is keeping the brand where it is. So the shows, the communication, the events, the activities, I mean, our duty is to constantly feed this positive tension between the branding, the identity, the creative. And as long as this happens, we will conquer market share.

Okay. Maybe the second question, moving to Miu Miu. I'm wondering what's exciting you most for what's next? Is it more stores? Is it bigger ones? Is it sales densities? Is it product categories? Anecdotally, you might have heard from this, but EssilorLuxottica had great things to say about the business that they're doing with Miu Miu. What are the main elements that excite you in terms of future growth for that brand?

So first of all, and again, the first homework that we need to do is to keep Miu Miu where it is. We don't need to be tired about it. We don't need to be bored about it. I think that we still have a journey here. And I think that Mrs. Prada and the team will continue to go down this path. And I think that this is the most important one.

The second being that today, we have a much bigger company to be managed. The group and the team is healthy and strong. I think that we have enriched from inside and some additions from outside, and we are in a much stronger platform today. I think that the real obsession has to continue to be leather goods. Leather goods is the greatest opportunity we have. I think that we have reached levels on ready-to-wear, which are at global best. And we now need to constantly -- even if leather goods in the last 3 years have been the fastest-growing category, there is still a journey to be done there. And this is what we're trying to do every week.

So this is -- we still have a huge opportunity, as you all know, in North America. We got probably 5 or 6 freestanding stores. Americans are showing to us their love on Miu Miu. So we had to increase some square meters, as we said, probably in the region of between 10% and 12% during 2025 and probably the same next year, which is sometimes is enlarging stores because people are allowing us to enlarge our stores. Sometimes it is opening new stores, but we also trimmed here and there some useless stores.

So it's always very careful. We are still in the region of the 170 stores. So we're pretty -- we still have a pretty reasonable number of stores, and this is what we're continuing to do. So nothing new. Sometimes we need to be bored of doing well what we're doing or improve what we're doing week by week.

Okay. Excellent. And then maybe lastly for Mr. Bonini. I didn't think gross margin could go higher, but I guess there's probably a positive channel mix and possibly a greater proportion of sales at full price. You've now passed the 80% mark. Is that where we should position ourselves for the next 2, 3 years at around very low 80%?

Yes, that's correct. And the factors are the ones that, Erwan, that you mentioned. And we've already been at this level, and we went a bit backward and now we are again a bit forward. But as we always said, when we are at around 80% is where we think it's sustainable and should be.

Your next question comes from the line of Susy Tibaldi from UBS.

So my first one is about the retail KPIs that you've been mentioning several times and how there is still more way to go. I was wondering what are the things that increasingly you have learned and you have started doing better than in the past? And what are the things where you think you're still not so good at and there is much more to do?

So the point is culture. I think culture, retail culture, commercial attitude, I think that these things do not change overnight. We have significantly improved. But if I compare ourselves to the best, there is a gap. So there is still a journey to be done, especially in certain regions of the world where we have improved. We have significantly improved, but we're still behind. And it's people, it's organization, it's the way we interact with our consumers. It's the way we are breaking the eyes in the first visits, it's the way we organize certain activities with recurring or VIC. There is a lot of things that we can do much, much better. We have been a little bit transactional in our past and moving from there to somewhere else takes time and takes a lot of time because the number of stores are well spread across the world. So it's a journey.

Understood. And when it comes to the growth because in the past, you used to provide growth by category. And you said that Miu Miu has been quite well balanced. When it comes to Prada, is it -- are you seeing any trend? Because obviously, in the industry overall, we're seeing leather goods being weaker and other categories being stronger. Can you give us some comments on the trends you're seeing by category? And also perhaps by price point, you are obviously expanding the price architecture, but we are seeing this weakness at the aspirational consumer. So is that also something that you think is being a factor? And so you're having the higher end, your more loyal consumer really driving the growth?

I think that there are certain trends happening in the past 2 years, 2.5 years in this industry. Aspiring has been a little bit less dynamic and wealthier consumers have been pretty solid. So I think that we have been following that up.

On the other side, what's nice and fantastic about Prada is that, as we all know, it's a multiphase brand. So we have an opportunity to be a little bit more sporty, a little bit more easier, a little bit more lifestyle on certain activity. And I think that, that is helping a lot. In terms of categories, I would say ready-to-wear and shoes have been the strongest categories. And leather goods, I think that we have gained significant market share in a market where I think, I'm not sure about, but I think there has been major losses by our competitors.

Definitely. And lastly, just a clarification on the space and the store openings. So because you've mentioned that in the H1 results, there was very little contribution from new stores. But then you're still saying that the space contribution from Miu Miu should be 10%, 12% for full year. So this is going to be quite -- really quite concentrated. We should expect quite a high space contribution in H2 from Miu Miu?

No. No. Obviously, when you say 10%, 12%, you mean in a year time. So it means 5 or 6, in 6 months, in terms of space, then you need to open up, you need to bring it to where it has to be. So I would say that each opening that we have done, each enlarging that we have done in Miu Miu has been successful, but it takes time to be seen. So it will be more seen at the end -- in the second half and the beginning of next year. But what we said we are doing in terms of openings and enlargements. On Prada, it's a constant journey of opening a few and closing a few.

Your next question comes from the line of Luca Solca from Bernstein.

I'm curious to get your thinking about how you're balancing the opportunity to price up and moving into a higher consumer cohort with the need to stay value for money and stay relevant with aspirational consumers. If you take leather goods, for example, or -- yes, leather goods in general, I would say, how -- as your sales mix by price band been evolving, for example, above EUR 3,000. If you could give us a sense and how you've been able to stay close to consumers that maybe have not more than EUR 1,500 to spend in the category?

The reason I'm asking is we've seen quite a significant pressure on volumes on some of your peers and those that have increased prices the most, take Chanel, for example, have been taking it on their chin. So I wonder how you think about that? I will ask you my other questions afterwards as you demand.

So I could -- result a little bit theoretical, but this is what we are first of all, trying to do, and I would say, also achieving results on. On one side, I mean, we have a strong statement with Prada Re-Nylon, and it's a huge statement. It's a fantastic statement. We have just introduced in the market a wonderful Explore family, which has been gaining volumes immediately. And I would say that, that is what we consider our statement in that part of the market. It's younger, it's dynamic, and it's also very functional bags. And Re-Nylon, I think it's our footprint in what you call, let's call it, the affordable, but I would call it one of our foundations.

On the other side, we all know that the big opportunity for us was to stretch and the Galleria volumes are still going up. So I think that, that is something that we love, and we are ready for a new strong campaign in the next few weeks. And on the other side, we have introduced right now a number of bags coming from last fashion show, which I think are right where the market is asking us to be. They are simple from an aesthetical point of view. We have accessories, very structured, very soft. And I think with proper price points that really can allow us to generate a positive mix.

I think everything is there in the mix. It's -- we have those consumers. Probably we're not being the greatest to host them and to give them what they were asking us in terms of service, in terms of privacy. And I think today, we have it.

So again, I'm sorry to repeat that it's a journey, but it's a journey. And the improvement is there. It's not price -- we had a maintenance price increase at the end of June, so we had it, as we said during our last call. And -- but the mix is greater than what we have been able to do on pricing.

And this is what we will continue to do. It's -- we have -- what's beautiful about Prada is that it can be sporty, it can be glamorous. This is one of the few brands that can allow us to play 3 or 4 games at the same time. Is this easy? No. But this is what the DNA of Prada is.

Understood. That makes perfect sense to me. On a different topic, eyewear, you have a very productive partnership with EssilorLuxottica. I wonder what your thinking is on the smart glasses opportunity and if you're considering it as appropriate for the Prada brand sometime in the future?

It's Lorenzo speaking. Luca, I take the question, if you don't mind. I think that the point of -- we have a great partnership with EssilorLuxottica. They are friends of us, and we are working with them on several projects. I think the biggest point of the smart glasses is how they're going to be in 5 to 10 years. I think potentially, they're going to change quite a bit the way we see glasses in general and smart products in general. I think it's a journey.

I think if we look back in time, we are at the beginning of the smartphone before the era of the iPhone. And so it's a bit early to do like big announcement of -- to say something big about smart glasses. But I think it's definitely something that we are looking for and it definitely has seen some of the last products they're going to launch, and the technology is quite impressive. But we are at the beginning, I think, of some kind of an era.

So still, I think we have not a clear understanding from the product point of view of what is going to be in the future because still there are point on the form factor, functionality and so on, but it's coming fast. And I don't know if you ever tried some of them, but especially the last generation that they will launch in a few months, I think were to try to understand the potential. I hope I answered to your question.

Yes, absolutely. Maybe a small one on your senior management organization. Gianfranco D'Attis has left. Are you planning, Andrea, to replace him temporarily or permanently?

So first of all, I've been thanking Gianfranco D'Attis for what he has done in this 3 years, for his efforts, for the business evolution. So I've been thanking and I will continue thanking him. On the other side, Prada brand is unique. And certain times, we forget that this is a first-generation brand that maybe doesn't need a CEO, but needs a kind of bright coordination between very strong people, ideas, souls, creativity, thoughts, sometimes going with the flow, sometimes going exactly the opposite of the flow. So I've been taking personally this task, and I will keep on doing that. And we will judge it due course, we will understand. But if it is an interim, it's a long one.

Understood. And lastly, if I may, we're going to see another launch of [ newness ] in September with most brands presenting new creative directors. What are you planning to do in order to keep the focus and in order to keep the momentum going at Miu Miu?

We should ask Mrs. Prada. And I'm sure that she has all the resources and all the ideas and the things to show to the world that we are still up there.

Let us know if you managed to speak to her then.

Your next question comes from the line of Daria Nasledysheva from Bank of America.

I have 2, and I will also ask them one by one. So my first question would be, could you please share any color at all on relative profitability of Miu Miu and Prada brands as it stands today? And how should we think about the group profitability profile development as Miu Miu starts to be more active from the space growth perspective?

Thank you. It's Andrea Bonini. Miu Miu, we discussed this in the past in the sense that the 2 brands were and remain at different stages of maturity, different size. Miu Miu has clearly been on a very positive trajectory, easy to imagine considering the organic growth trajectory and therefore, the increase in productivity, the increase in sales density. At the same time, Miu Miu remains in certain aspects behind Prada in the curve and in terms of the investment that is still needed. And to this, we can link the point around space that was made.

And going forward, look, I mean, it's great in a way to have a multi-brand portfolio because indeed, at times, you can have diverging trends that compensate, help each other and the 2 brands can indeed support each other. At the same time, the way we look at profitability is in a very independent way, one to the other, and both brands need to be on their own trajectory, positive trajectory and move along that curve.

Perfect. And my second question is actually a little bit of a follow-up. If we think about drivers of organic growth for the group and actually if possible, both for Miu Miu and Prada on a brand level, could you please help us understand a little bit how we should think about building blocks from volume, mix, price perspective? And what are the key initiatives to really drive volume growth from here, particularly for Prada? Or would you say this volume inflection depends more on a cyclical recovery rather than anything else?

I will do my best. I thought that I was -- I had answered in different other answers to these questions. I mean, when we look to Miu Miu, there is a geographical opportunity. We're still underpenetrated in most of our countries, except a couple of countries in Asia. We are underrepresented on certain product categories and the first being leather goods, where we are catching up, but there is still a long way to go. And I think that with Miu Miu yet, we have an opportunity with some a little bit wider and larger stores to offer the opportunity for people to buy also at a higher price level. We will start a world tour in Q4 with something which is very unique to Miu Miu, very inclusive, very easy, but yet very special in terms of product offering, hospitality offering and pricing offering. So this is Miu Miu.

On the other side, in Prada, I think it's mainly our retail activities and how we go from the buying and we go into the stores and doing our homework in the stores. I think that these are the 2 main aspects. And obviously, if we have been able to keep up in this 24 months because now it's 24 months that the industry began the decline. Let's imagine that in the near future, we can imagine a little bit of the softer landing and maybe probably also a kind of new growth.

Your next question comes from the line of Thomas Chauvet from Citi.

I have 2 questions. I'll start with the first one on tourism. You mentioned cyclical demand pressure related to tourism earlier. Is it fair to assume this will continue in Q3 and impact maybe the Prada brand in the same way as in Q2? And could you indicate what's the Prada brand share of tourist spending globally now and in the key tourist markets, so Europe, Japan and I guess, rest of Asia? That's my first question.

So in terms of tourism, I think Q3 will be a little bit softer that is tourism, American tourism is at its peak in July and then peaks down. And instead for Japanese, the peak was a gain end of June, mid-July and then started to descend. So these are the expectations we have. If I look to traffic patterns, if nothing else changes, I think that we will be basically breaking even in end of August.

By breaking even, you mean Prada brand returning to flat like-for-like?

No, I'm talking about tourism traffic.

Okay. And could you remind us the share of tourist spending globally for the Prada brand in the key markets?

70-30, roughly.

70-30?

Yes, 70 local, obviously.

Okay. Mainly Japan, Europe, I guess, and a bit of Southeast Asia?

Yes.

Okay. And my second question on marketing costs that were up 16% year-on-year in the first half and above 9% of sales. Is it due to an unusual phasing of events? And apologies if you've already said that. I may have missed it. Or are you expecting A&P to be above 9% of sales for the full year, which I think would be slightly above historical average?

No, there's no significant phasing as we always said. I mean when we say the priority is growth, the priority is to continue to invest behind the brand, particularly at a time where we see some of our competitors actually stepping back a little. We think considering the performance of the group, it's -- we see it as a great opportunity on the contrary to accelerate and do what we do to be top of mind. We have -- sorry, we're already over time, but maybe we'll take 1 last person. Thank you.

Your final question today comes from the line of Melania Grippo from BNP Paribas.

This is Melania Grippo from BNP Paribas. I've got 2 questions. First, I wanted to ask if you could please update on your number of outlets? I remember you have been closing quite a few of them and probably you had to close a bit more. So I was wondering if you could please tell us what is the number here?

So there is no real -- I mean, the journey is going on. We -- outlet is between 5% and 10% of total sales. What is important is that we have drastically changed the business model of our outlets. And I think that between outlets and wholesale, which are obviously very different channels, they are today in a very, very prudent and conservative percentages.

Okay. And my other question is on the performance of the online channel. If you could please tell us, give us an idea of how it performed?

So we are seeing in Miu Miu a proportional growth, which is not bad at all looking to the growth of the business. And I am very interested in looking to our American profile in our e-commerce in Miu Miu, thinking to the small footprint that we have in terms of stores. I think that the growth of this channel that we could also call it omni, and we could also add a very strong client services activities. I think that, that could be really opening up some new ideas on the way we do business in the United States. On Prada, we had a little bit more positive performance on e-commerce compared to our physical in the last 6 months.

So I think that with this, we have concluded. As Italians, we are going on holiday. And I hope that all of you can have a rest, and talk to you soon. See you soon. Thank you. Bye-bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.