The war in the Middle East has slowed the growth of Prada group's Miu Miu brand. What about the stock?

Italian luxury group Prada, despite the war in the Middle East, reported on April 30 revenue for the first quarter in line with expectations. However, the Iranian crisis had a negative impact on sales of Prada's popular clothing and accessories brand Miu Miu, Bloomberg writes.

- Prada's revenue in the first quarter rose 6.5% year-on-year to €1.43 billion ($1.67 billion). The figure matched the consensus forecast of analysts surveyed by Bloomberg. Excluding currency fluctuations, growth amounted to 14% year-on-year.

- Prada's first quarter retail sales rose 10% year-on-year, excluding currency fluctuations, to €1.2 billion, ($1.4 billion). However, excluding the performance of Versace, whose acquisition Prada completed in December, sales growth was only 1%. Meanwhile, sales of Miu Miu, previously the Milan-based fashion house's most profitable brand, were 2% year-on-year in the first three months of 2026, compared with about 60% in the first quarter of last year.

- Versace posted revenue of €143 million ($168 million) - in line with expectations, Bloomberg noted.

- The fashion house's sales in the Middle East fell 30 percent in the first quarter from a year ago and 22 percent excluding currency fluctuations, the company said. The war in a region with a high concentration of wealthy buyers has dampened global demand for luxury goods, Bloomberg noted.

In Europe, the company's first quarter sales fell 6% year-on-year due to weaker tourist spending as well as a moderate decline in local demand. At the same time, management noted "encouraging signs of recovery in tourist spending" recently, Reuters writes.

Prada's retail sales in the Americas grew 15% year-on-year on an organic basis in the first quarter, driven by strong local demand, while Asia Pacific grew 5%, mainly driven by China and South Korea.

"We operate in an extremely challenging environment characterized by ongoing uncertainty and a rapidly changing geopolitical situation," said Prada Chairman and CEO Patrizio Bertelli (his words quoted in a company statement).

Prada depositary receipts, traded on the OTC market, added less than 1% in trading on April 30. Shares of the company in Frankfurt rose by 9%. In Hong Kong - decreased by 2.3%, but the exchange closed before the publication of quarterly results of the company. Since the beginning of the year, Prada securities in Hong Kong are down by almost 23%.

The majority of analysts - 13 out of 21 watching Prada securities in Hong Kong - advise to buy securities of the luxury brand, MarketScreener data show. Seven experts are cautious and advise holding the company's securities, and only one recommends selling.

Prada is not the only company in the luxury sector to face sales pressure due to the war in the Middle East. For example, LVMH, Kering and Hermès have previously disappointed investors amid weak sales in the Middle East region due to the conflict now in its third month.

Prada bought Versace for $1.4 billion in April 2025 - at a time when Miu Miu's sales growth has begun to slow, although the brand is particularly popular with a younger audience. Versace ended last year with a loss and is expected to remain unprofitable this year amid the brand's relaunch, Bloomberg notes. The group expects that Peter Mullier, who will take over as Versace's creative director on July 1, 2025, will be able to breathe new life into the brand after a difficult period of declining revenue and losses, notes The Wall Street Journal.

Prada's purchase of the historic Italian brand is seen as a move to expand its portfolio and customer base amid the dominance of conglomerates such as LVMH and Kering in the luxury sector, the newspaper notes.

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