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Group revenues rose 18 per cent in Q3. The group’s sales were up 18 per cent in the first nine months of 2024.
“In terms of Miu Miu, it’s now a consequential four years where the team decided to head in a certain direction from an image, identity and creativity point of view, even with a retail network that also made more sense,” group CEO Andrea Guerra told investors on a call. “We are managing the growth, we are rebalancing the mix between products and we are working day and night to make this growth sustainable. I always want to remind you that even if we have this stellar growth, the absolute numbers are not big, so we have a journey to do.”
Guerra added that Miu Miu will be upping its retail presence by expanding current stores and opening up in new regions. The brand will also announce its new CEO in the next one to three months (Miu Miu has been without a CEO since early September, when Benedetta Petruzzo left to become managing director at Dior).
Overall, Prada Group is an outlier in the luxury slowdown trend, which has seen bigger competitors such as LVMH and Kering suffer, with only ultra-luxury brands Brunello Cucinelli and Hermès bucking the course this quarter.
The Prada brand, however, saw a slight slowdown in growth compared to the previous quarter, with sales up 2 per cent in Q3 and 4 per cent between January and September. Bernstein luxury analyst Luca Solca noted the polarisation between the Prada and Miu Miu brands: “The current Miu Miu trajectory confirms our view that the market is underappreciating the growth that Miu Miu can generate in the next 12 to 18 months. At the same time, it also confirms our worry that Prada — which is still the very bulk of the business — could be well past its peak growth potential.”
The group achieved double-digit growth across Asia-Pacific, Europe, Japan and the Middle East. Asia-Pacific revenues were up 12 per cent in the nine-month period, despite challenges in the local consumer market (Q3 is in line with this trend). Europe sales increased 18 per cent in nine months, thanks to both domestic and tourist spending (Q3 is also consistent with this trend). Like many companies, Prada Group saw great success in Japan, where the weak yen has been driving tourist spending; sales were up 53 per cent — but Q3 has shown a deceleration, signalling that Japan’s boom period may be ending. Sales were up 24 per cent in the Middle East and 8 per cent in the Americas over nine months, with both markets seeing further acceleration quarter-on-quarter in Q3.
“In terms of the acceleration in the Middle East and the US, these are two regions where we have taken conscious decisions a year ago to start from scratch in terms of local organisations, local commercial, local retail, local consumer relationships, and we have invested significantly in the last 18 months in those teams,” Guerra said.
Retail sales, which make up the majority of the brand’s revenue, have grown 18 per cent in nine months at constant currency, while wholesale is up 9 per cent.
When asked by analysts about the debate around whether price increases have muted consumer demand, Guerra answered that Prada has “not moved all our prices up, but we are trying to stretch the price range”. He called the strategy a price-mix effect. “We are well positioned on entry prices, but we also [have the substantial territory] to extend the price range upwards; we have always been a bit too short with our price range, so it means working on the products, the consumers and the retail environment, and the opportunity to allow transactions in a more private manner in and out of stores.”
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