Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Prada SpA (PRDSF, Financial) reported a strong 18% increase in net revenues for the first nine months of 2024, driven by high-quality retail growth.
- Miu Miu brand showed exceptional performance with a 97% growth in the nine months, including a 105% increase in Q3, indicating strong brand momentum.
- The Asia Pacific region, despite challenges, maintained a double-digit growth rate of 12% in Q3, showcasing resilience in a key market.
- Prada SpA (PRDSF) has successfully expanded its brand equity through innovative partnerships, such as the development of a spacesuit for NASA, enhancing its cultural positioning.
- The company is strategically expanding retail space for Miu Miu, indicating confidence in continued growth and market demand.
Negative Points
- Prada brand experienced a slight deceleration in growth, particularly in China, which remains a complicated market with uncertain near-term improvements.
- Exchange rates negatively impacted group revenue by approximately 3% points during the first nine months, affecting overall financial performance.
- The North American market showed only slight improvement, reflecting a challenging environment with pre-election uncertainties.
- Despite strong growth, Miu Miu's absolute numbers remain relatively small, indicating a need for continued strategic focus to sustain momentum.
- The wholesale channel's performance was primarily driven by timing effects, suggesting potential volatility and lack of consistent growth in this segment.
Q & A Highlights
Q: Can you explain the nationality performance in the quarter, particularly for Prada and Miu Miu?
A: For Prada, the Chinese consumer performance was low single-digit positive year-to-date, but Q3 was slightly negative. North America was slightly positive, Europe was mid to high single-digit positive, and Japan maintained a good trend. Miu Miu showed strong growth across all clusters, driven by consistent brand identity and creativity.
Q: What is driving Miu Miu's momentum, and is there an update on the CEO replacement?
A: Miu Miu's success is due to a clear direction in image, identity, and creativity over the past four years. The brand is managing growth sustainably. Regarding the CEO replacement, the process is ongoing, and an announcement is expected in the next few months.
Q: How are you approaching budgeting for 2025 given the different growth rates of Prada and Miu Miu?
A: Prada is focused on regaining market share and maintaining healthy growth, while Miu Miu will expand its retail space. We aim to leverage costs effectively and keep Miu Miu light and Prada efficient.
Q: Can you discuss the margin implications if Prada continues to grow at a low single-digit rate?
A: We are balancing top-line growth with bottom-line efficiency. We aim to deliver better margins than last year, leveraging our multi-brand structure to invest in Prada while benefiting from Miu Miu's growth.
Q: How do you view the pricing strategy for 2024, and what are your thoughts on price increases?
A: We are stretching our price range upwards while maintaining a low single-digit price increase every few months. The focus is on enhancing the product mix and consumer experience to capitalize on pricing opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
