Prada Group is actively working to capture a larger share of the high-spending luxury market, a segment CEO Andrea Guerra described as driving the industry and becoming even stronger. Guerra noted that while Prada has historically been somewhat hesitant to fully cater to these top spenders, the company is now prepared to "pamper and service these consumers in the best possible way." This strategy involves maintaining stable entry prices while expanding the overall price range, a move expected to be largely in place by mid-2026 across various product categories. The goal is not to target Hermès' price points but to broaden Prada's appeal to this affluent demographic.
Financially, Prada Group reported a 7% increase in retail sales to $2.85 billion (€2.63 billion) in the first half of the year, with organic growth at 3%. Second-quarter organic growth accelerated to 5%, despite a 100 basis point impact from the conflict in the Middle East. While gross profit rose to $2.58 billion (€2.38 billion), adjusted operating profit, which includes Versace and currency exchange effects, decreased 14.3% to $576 million (€530 million). This decline compressed the adjusted operating margin from 22.6% to 17.4%, and group net income fell 15% to $355 million (€327 million).
Prada's retail sales specifically grew 3.3% in the first half, accelerating to 6.3% in the second quarter, driven by full-price sales. Miu Miu's retail sales increased 2.5% in the second quarter, though its exposure to the Middle East was more pronounced. Geographically, the Americas were a strong performer, showing 17% organic growth, accelerating to 19% in the second quarter. Asia Pacific, the largest region, grew 6% organically, with an 8% increase in the second quarter, and Japan saw 8% growth in the second quarter. However, Europe experienced a 4% organic decline, improving to a 2% decline in the second quarter, and the Middle East fell 24% due to ongoing conflict. China was identified as a less predictable market but also the one with the biggest opportunity for Prada. The group closed the half with a net debt of $754 million (€693 million), compared to net cash of $383 million (€352 million) a year prior. The integration of Versace contributed $332 million (€305 million) in net revenues but was noted to have a dilutive effect on profitability, with management expecting it to remain at a double-digit operating loss for the full year as its repositioning continues. hkexnews.hk, wwd.com, finance.yahoo.com, insideretail.com.au, insideretail.asia
