Prada increased revenue but warned of pressure on profits due to Versace

Hong Kong-listed Italian luxury group Prada reported March 5 organic revenue growth of 8% in 2025. The main driver was its Miu Miu brand, which is popular with young people. At the same time, profitability was negatively impacted by the acquisition of Versace, which will continue to put pressure on profitability this year, Reuters notes. Prada is now focused on relaunching Versace, known for its bold and glamorous style.

- Prada Group revenue rose to €5.72 billion in 2025, but retail sales of flagship brand Prada fell 1% despite a slight improvement in the fourth quarter of 2025. The revenue figure exceeded analysts' consensus forecast of €5.68 billion, The Wall Street Journal reported.

- Miu Miu sales in 2025 grew by 35%, after nearly doubling in 2024. The brand's fourth-quarter revenue grew by 20%, in line with analysts' expectations, but noticeably below the rapid growth rate of the previous period, Bloomberg writes.

- For 2025, Prada's retail sales in Asia Pacific grew 11% at constant exchange rates, while the Americas grew 18%. Europe grew more moderately amid weaker tourist flows.

- Versace, whose acquisition by Prada completed in December, had revenue of €684 million in 2025, Bloomberg wrote, citing the company. The brand has become unprofitable and comparable losses are expected this year, it warned.

Prada intends to deliver above-average growth in the market, but Versace will have a "dilutive impact" on the group's operating margin in 2026, CEO Andrea Guerra said in a Bloomberg statement. Prada hopes to "resume a gradual improvement" in performance starting in fiscal 2027, the top executive added.

"The group posted its fifth consecutive year of growth, which is a solid result against the challenging comparison base of recent years," Guerra states.

Prada's depositary receipts traded on the U.S. over-the-counter market fell by 3.6% in trading on March 5. The company's shares in Hong Kong added 2.4%, but the exchange closed before the results were published. Since the beginning of 2026, Prada shares in Hong Kong have fallen 3.6%.

The majority of analysts advise to buy securities of luxury brand: such recommendations 17 out of 22 in total, MarketScreener shows. Four more are cautious and advise holding the stock. Only one recommends selling.

Prada bought Versace for $1.4 billion in April 2025, at a time when Miu Miu's sales growth was beginning to slow, although the brand is particularly popular with a younger audience. With this, Prada is trying to strengthen its position in competition with luxury giants such as France's LVMH and Kering.

This article was AI-translated and verified by a human editor