Prada (PRP0) Q4 2025 Earnings Report

The call presented a balanced picture: clear commercial and brand strengths (fifth consecutive year of growth, robust retail momentum, strong Miu Miu performance, disciplined profitability and ESG progress) and a healthy balance sheet, but also notable near‑term challenges (meaningful FX headwinds, Versace integration dilution and planned channel repositioning, regional disruptions and cautious wholesale). Management emphasized continued investment in product, hospitality and digital capabilities while targeting margin resilience and Gradual recovery for Versace from 2027. Given the mix of solid operational results and material near‑term integration/FX headwinds, the tone is cautiously constructive.

Management reiterated that group momentum will continue into 2026 with "solid" organic growth at Prada and further normalization at Miu Miu (after Miu Miu’s FY retail up 35% to €1.6bn and Q4 +20% vs +84% LY), while flagging a challenging H1 (Miu Miu lapping prior Q1 +60% / Q2 +40% comps) and continued FX pressure similar to 2025 (FX headwind ~380bp on revenues in 2025). Key FY25 baselines: group net revenues €5.7bn (+9% at constant FX; +8% organic), retail sales €5.1bn (+8% organic), EBIT‑adjusted €1.32bn (23.2% margin, pre‑Versace margin steady vs 2024), gross margin +50bp to 8.3%, net income €852m, CapEx €617m (€535m ex real estate) and net debt €466m. On channels, retail drove growth (LFL +8%), wholesale +4% (3% organic) and royalties +19% (14% organic); space contribution remains low single digit and inventory incidence improved from 15% to 14%. Versace (one month consolidated in 2025; ~€680m pro‑forma FY revenue) will be a transition in 2026: management expects a mid‑single‑digit top‑line contraction at constant FX (likely high‑single digit at reported FX), greater discipline on discounting, channel repositioning and cost synergies, and an anticipated EBIT loss limited to a "two‑digit" million figure in 2026 with progressive margin and top‑line improvement targeted from 2027; excluding Versace, management said mid‑single‑digit reported top‑line growth would allow a steady EBIT margin while marketing may tick up slightly and CapEx intensity should start to decline.