Prada Spa Ord

Good day and thank you for standing by. Welcome to the Prada Group 9 Months 2025 Revenue Object Presentation. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be aware that we'll take and answer one question at a time before moving to the next question. And please also know that today's conference is being recorded. I would now like to turn the conference over to Mr. Andrea Bonini, CFO. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining the Prada Group's nine-month 2025 revenue update.

With me today is our Group CEO, Andrea Guerra. We will start with some remarks and then move to Q&A. Before we start, please be reminded that during today's call, we may discuss forward-looking statements which are subject to risks, uncertainties, and factors beyond our control. And the actual outcome and returns may differ materially from such statements. Please refer to the disclaimer included in slide two of our presentation. With that, I will hand over to Andrea Guerra.

ANDREA GUERRA Thank you, Andrea. Buongiorno, and thank you to all to be with us today. As we stated in our press release, our performance has been solid, has been on the same pace of the year, also comparing with very different comps and tough comps of last year, and with some precious improvements that we will talk about. We all know by now, hopefully, that we're all working in a different world and a different industry. To continue with this rhythm, after two years of the beginning of this new world, it means that we have been able to attract and please with our brands and products our clients. Considering the extent and duration of our like-for-like improvement during so many quarters, now it means that all the work we have been able to do so far, all the effort, all the commitment that we have put on our people, organization, and retail excellence, is finally beginning to really pay off and we are happy about this prada prada performance i would define it resilient with a twist that is we have seen a negative sign in the second part of your q2 as we all remember and in the very initial part of q3 then we have had We have been observing and slow and continuous and steady improvement of product results. Obviously, not helped by traffic. I would say that traffic is normalizing, is leveling off, but really reaping benefits from all the work done on retail activities, brands, products, together with our people, in the stores across the world. So we have seen an improvement Prada. On the other side, Miu Miu was really against an impossible quarter. If I recall well, it was basically plus 100 on 23. We obtained another solid quarter. And what is good and nice to observe about Miu Miu is that our attitudes, behaviors, are growing with the dimension of the brand. And I think has to be stated that the growth of Miu Miu has been very well balanced between price points in the price mix volume across the different product categories and throughout all regions. This is why I'm saying that the journey is continuing pretty solid. Having said this, I will pass the word to Andrea to give you some more details on our number and performance.

Thank you, Andrea. Starting with net revenues by channel.

In total, the group recorded revenues of €4.1 billion in the first nine months of the year, up 9% against the same period last year at constant effects. The performance was driven by high-quality retail growth sustained by like-for-like full-price sales and limited contribution from space. The third quarter confirmed a consistent and solid growth trajectory with retail sales up 8% against the same comparatives in the prior year period. As a reminder, in 2024, retail channel growth was remarkably consistent at plus 18% in all quarters. Wholesale was up 4% in the first nine months and up 19% in Q3. The channel was impacted by some degree of phasing in Q2-Q3, but our strategy remains unchanged as we maintain a selective approach with independence. Royalties continued to grow up 11% over the periods, supported by both eyewear and beauty. Exchange rates had a negative impact on group revenue of circa 260 basis points during the first nine months and 470 basis points over the quarter.

And the impact is expected to be even more meaningful in Q4. Turning to the next slide, retail sales by brand.

All our brands continue to show healthy trajectories Prada delivered a resilient performance, minus two in the nine months, with the third quarter edging closer to flat, supported by all key regions. MiuMiu reported sustained growth throughout the period at plus 41% and plus 29% in the quarter, with widespread appreciation across all regions and categories, as Andrea mentioned. As a result, The brand contribution to the group retail sales increased to 32% against 25% in the same period of last year. Church's was also back in double-digit territory in the quarter. Moving to the next slide, retail sales by geography. Asia-Pacific delivered double-digit growth over the first nine months at plus 10%. Growth was also up double digit in Q3, with some sign of improvements in trends in mainland China extending into October. Positive performance in Europe, up 6% in the nine months. Trends were similar between Q2 and Q3, as local demand proved resilient and tourism softer. Good progression in the Americas, where retail sales were up 15% in the nine months, with Q3 at plus 20 in farther sequential acceleration. Japan grew against exceptional high tourism in 2024, delivering plus 3% over the nine-month period. Q3 was down 1% but improving quarter-on-quarter, driven by solid local demand and increased traveler spending. Lastly, Middle East delivered a solid performance, up 21% in the nine months, with Q3 in moderation at 10% on high comps. With that, I will hand back to Andrea Guerra for some closing remarks.

Grazie, Andrea. Now we're entering in the usual holiday period. And not only. I think in the next three, six months, we will observe in our industry a lot of novelties. all these new entries, all these new products, shows and news. We have shown our pace and rhythm so far. We are here yet very committed on our creative leadership. We are standing and being authentic to contemporary art, culture and craft. We will continue in our solid journey. We will continue to invest in our creativity and desirability. We feel home in this new normal. And we have started reaping fruits from all our investments on people organization processes and retail. Our flexibility and velocity will obviously continue to be one of our primary characteristics. We have entered the usual Q4 where the last six weeks of the year become paramount. In this four weeks of October, Pradastone continues to improve. MiuMiu continues its journey and obviously its long-term normalization. So we are happy so far. With this, grazie, and we now turn the word to you. So I will give back the word to the operator.

Thank you, sir. As a reminder to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Once again, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please be aware that we'll take and answer one question at a time before moving to the next question. Thank you.

We are now going to proceed with our first question.

And the questions come from the land of Chiara Battistini from J.P. Morgan. Please ask your question.

Good afternoon. Thank you for taking my question. So my first question is on the now that the deal has closed, I was wondering if you could share your initial take on part of your first priorities that you have identified, investment needed that you see distribution strategy from here. Any initial take you can share with us on the Versace integration, please. That's my first question.

Thank you for the news. But the transaction is not closed. No, no. We're still waiting authorizations, hopefully in the next 15 days. So it's not closed.

Okay, my bad. I thought it was. Okay. Second question, on Prada and the improvement you've seen that you mentioned you've seen through Q3, and you mentioned briefly that this seems to have continued also in the first few weeks of October, if I got that right. Could you share, in terms of current trade, maybe if you can expand on current trading, what is driving that? Is that a comment on the broader environment, or is it really the company-specific initiatives that are supporting it?

ongoing improvement so I am NOT observing very different things happening in the world now what we have seen in the last three months is basically the same that is we have seen a kind of plateau in China and holidays were better than what we expected, but I would keep the word plateau. What we had observed was that we had less Americans in Europe and obviously nowadays are less influenced on our performance in Europe. And we obviously had noticed that after a strong tourism inflow in Japan, strong is probably even small, but huge. I think that the first half last year, the group realized something like plus 60% in Japan. What we have seen is a very strong work also by our Japanese team on local customers and I think we have been pretty resilient there and now we're seeing our our normal journey and performance in United States I think on some part of it is Americans that have traveled less and on the other side if you remember we also talked about the fact that we didn't do any big revolutions during this years one that we did a little bit was in the United States, where we decided to be a little bit more aggressive in changing behaviors, attitudes, and culture. And I think we had a great reaction by people that have been a long time with us. We had some new entries. And I think that we are accelerating in North America. So this is how I see it so far. Always, and I always will repeat, in Q4, October has very little meaning compared to the last six weeks of the year.

Indeed. Thank you. And maybe last question, just a clarification on the wholesale trends in Q3. It was a very big number. Anything exceptional in terms of timing of shipments?

Nothing. I mean, sometimes it's a little bit up, sometimes it's a little bit down, but there's nothing.

Okay, perfect. Thank you.

Thank you. Next question, please.

So we are now going to proceed with our next question. And the questions come from the line of Chris Huang from UBS. Please ask your question.

Hello. Hi. Thanks for taking my questions. I have three, please. Starting with the first one, you've been historically very helpful in providing some color on the cluster trends for the key product brands. So could I please ask for some flavor as well when it comes to the Chinese, Americans, Europeans, and Japanese? That's my first one.

Okay. Hi, Chris. Andrea Bonini.

So all clusters were positive at group level in the nine months and Q3, including Chinese. Leaving aside Miu Miu, at Prada brand, the improvement quarter on quarter has been mainly driven by local transactions across all key regions, I would say. Tourism overall marginally better, but if you get into the specifics of the different clusters, again, only Prada brand. The Chinese, better quarter on quarter, but still negative. As I said, improvement driven by both locals and travelers. Europeans, flattish on the nine-month, Q3 positive, and again, better quarter on quarter, driven by local demand. The North Americans was positive, low single digit in the nine-month, improving in Q3, and sustained by domestic demand. And on the Japanese, positive, low single digit in the nine months, improving again in Q3, supported mainly by very solid locals.

Okay, perfect. That's super helpful. The next one I have is actually space, because I remember earlier in the year, we were talking about maybe in H2 this year, we start to see a little bit more space growth kick in. What's your latest thinking around the store expansion when it comes to both Prada and Miu Miu? Should we expect something to kick in in Q4, or is it mostly going to be in 2026?

No, no. We have... we have executed what we were thinking on MiuMiu. So we have something like 10 or 12 stores more, and we have enlarged some square meters in another eight to 10 stores. So that execution, that plan has moved as planned. On Praga, we have taken more cautious journey more cautious I mean that is we want to have stores in other great locations but we want also to close stores that have got no meaning so yes we had a couple of more But in reality, in the next 12 months, probably with even 24 months with Prada, we will have six, seven, eight more, but probably 10 less or 12 less. So we constantly, I think that our journey with Prada will continue to be a reshuffle. And I think that there is an opportunity to, again, to be even more productive and I think that Prada is being more productive nowadays, even more productive going forward. So we keep on with our 80, 85% like for like and 10, 15 on new space or enlarged space.

Okay, perfect. And lastly, margins. I know this is a revenues call, but it'll be very helpful to hear about what you're thinking about the four-year margins. I think you've always stated the ambition of delivering a steady margin improvement into the midterm. But just looking at the growth profile, you managed to deliver in H1 and also so far Q3 and in light of the very tough comps. Q4. Are you still expecting on a four-year basis margins to see some expansion or should we start to see a little bit of more investments into the year end and hence putting some pressure on your margin development?

Nothing to add, to be honest, vis-à-vis what we said at H1. The only part of your comment, Chris, that I didn't get is when you say, did you mention light comps in Q4? No, I said tough comps in Q4.

In light of the tough comps, sorry.

Yeah, yeah. So yes, no, because indeed, I mean, I was going to say, no, they were not light because again, you know, 2024 for us was very consistent in terms of group growth because it was, you know, stable at plus 18% with Prada higher in Q4 and Miu Miu, you know, moderating a little, but, you know, we're still talking plus 84% in Q4, 24 for Miu Miu. So nothing to add on the margin front. I mean, so far, you know, we are on track. to deliver on what we always said. But as Andrea mentioned earlier, Q4, you know, from mid-November onward is really, really relevant, what happens then. And yes, we have a bit more of, in terms of phasing of advertising, communication is a bit more heavy. But as I said, I mean, so far, nothing to highlight.

Okay, perfect.

Thank you so much. Thank you. Next question, please.

We are now going to proceed with our next question. And the questions come from the line of Ed Aubin from Morgan Stanley. Please ask your question.

Yeah. Hi, guys. Good afternoon. So, Andrea Bonini, so just to follow up on the margin, apologies, I know it's again, it's a sales call, but On the FX, your friends at Caring mentioned yesterday, I don't know if you had time to listen to the call, about the headwinds. They quantified about 50 million euros for them on a net basis in H2. I'm not going to ask you to quantify anything, but how are you thinking about the FX headwind for H2 and a little bit of color in terms of 26, to what extent it could be or not be an issue for you? So that would be my first question.

Hi, Ed. Look, I would only say that for 2025, you know, the hedging strategies will do the job. So not so much an issue. 2026, maybe clearly, I mean, maybe a headwind. But I think we all know also that the situation can be very volatile when it comes to effects. So we shall see.

Okay, understood. And then the next question, sorry, I don't mean to allocate the question, but it's more for Andrea Guerra, is that you've been asked, Andrea, for over the past few months and the past few years about the industry, the price point, and the middle income being priced out or not. But by raising prices quite aggressively, some of your competitors over the past five years have kind of provided oxygen for more aspirational brands to grow. And in terms of your product offering, and I know you got the question in the past, but just wanted to get an update from you, is to what extent does that represent an opportunity for you, for the product group, to play with the mix and maybe launch a bit more accessible bags in leather goods? I know you guys have been relaunching in nylon, also the crochet bag and so on, but, you know, at 1,500 pounds, you know, per bag for the crochet. People will debate if it's accessible or not. On the leather goods more specifically category when it comes to bags, if you could comment on the pricing architecture and if you're happy with what you have now.

Obviously, the two brands are different. My philosophy is not changing. That is, on one side, we have to be very solid on our enterprise. which does not mean to reduce enterprise, but to keep it and to be credible on our enterprises. So to have an offer there. So I think that this is the first point. The second point, I always push our merchandising activities to be a little bit half... people that are doing an architectural world and on the other side, people that are doing a more artistic world. So we have constantly to work on the different price levels, on the different product segments, understand season by season how we can move from one to another, how we can insert some new products and how can we move let's say, in the middle level upwards. Then there is a world where I think that we have been not serious enough and maybe not courageous enough sometimes, which is high price. And we're credible. And this is what we are proving ourselves. And we had an exceptional... last week in new york presenting our high jewelry color vivant collection and we had a success that some somehow also surprised many of us not all of us but the thing is we have to be more bold we have to be more serious because the consumer is ready for us at those price levels and we have to deliver. So I think that in terms of price and mix, I would give you this answer divided into three segments.

Okay, wonderful. And so the last one for me, and apologies, it's a bit of a big picture question on the sales call, but I think investors would be really curious to have your views on the topic. And the topic is there is a bit of a debate in the fashion industry and amongst investors if kind of the so-called fashion pendulum is shifting away from kind of more minimalist to a bit more maximalist and a bit more color and less understated and so on and so forth. I would be curious to have your views on that. I mean, obviously, it's always difficult to assess these trends and to know when they start and for how long they could last. But what's your view on, you guys are the fashion experts, so what's your view on the topic?

You know, I think the following. On one side, we have the shows, which are shows, which are allowing people to express, people to deliver the future, people that are giving their sense of that moment Then there is the world and life, and the two have to be connected. The two sides have to be on tension. But nowadays, I would say that I don't see major pendulums. What I think that is proving to be very correct and proving to be very successful people that are authentic to their history to their cultural pillars and to their creative hearts this is what I see okay understood thank you next question please we are now going to proceed with our next question a question of Charles Louis Scotti from Kepler Chevrolet please ask a question

Yes, good afternoon. I have three questions, please. The first one, one of your competitors said that the e-commerce business is stabilizing, which is generally a good sign for the aspirational clientele. Do you also see a slight comeback from aspirational customers who have now reduced their luxury spending over the past few years?

It's what I was saying at the beginning. we are living in a new normal and we are living on a plateau. Let's see if from this plateau we go upwards or again downwards, but it's a plateau. It's a plateau now of four, five, six months. And if there are any signs that I would call weak signals, I would consider them more positive than negative, but very weak signals.

Okay, thank you very much.

My second question, it seems that you have ambitions to build a larger multi-brand Italian conglomerate with the acquisition of Versace. An iconic brand could change hands in the coming months. I know you haven't been mentioned among the potential bidders, but would you be open to considering an offer if your beauty partner were to acquire Armani? and seek a partner to manage the fashion division a little bit like what Estée Lauder did with Denia on Tom Ford.

I don't think time is coming up. I don't think, I mean, we were not invited, let's say. But, I mean, we have always been looking to the world, looking to the brands, having great respect for that brand. But I would not consider this question

realistic today. Okay, thank you very much. And last question.

I know it's a bit premature because you have not closed the deal on Versace. I don't know if you have access to the numbers, by the way, but if yes, could you tell us, also for modeling purposes and to assess the potential impact of the consolidation of the brand on your numbers, whether the brand current performance is in line with the latest target given by Capri. I think it was 800 million euros for this carrier ending March 26th. And how do you assess also the medium to long-term target that were previously set by Capri?

So we have access to the same public figures you have and be careful to not mess up dollars with euros because they are reporting in dollars today being an American company. Okay. Sure. So, but we have the same access you have. We are competitors. You know, authorities are very precise on this. Okay. So, you have no numbers to communicate? No, we don't. We are only, obviously, we will, but not today.

Okay. Perfect. Thank you very much. Thank you. Next question, please.

We are now going to proceed with our next question. And the questions come from the line of Chris Cao from CLSA. Please ask your question.

Hi, management. Thanks for taking my question. I have three. Firstly, as a quick follow-up on China's sequential improvement. So basically, in the third quarter reporting season, some of your peers highlighted the improvements in China as mainly on traffic and volume. So just wondering if you also see the same trend, or which of the retail metrics in your view is improving more? Is it foot traffic, is it conversion, or price or mix? And also, if there's any category that has been seeing more explicit improvement, is it ready-to-wear or bags, accessories, seeing more improvement? Thank you.

We had given before an outlook and what we have seen recently in China. I will repeat, on one side we plateaued, on the other side we have seen some good signs during holidays and this is what we stated before and this is what I will repeat now. Holidays were a little bit better than what we expected and I think that the worst is over, but I don't think that we will ever see again in the near future what we have seen in the last decade.

Okay, thank you. So the second question is regarding the acceleration on American clusters. So just wondering if there could be any highlights on if Prada core brand is improving more or if Miu Miu brand has been mainly driving the acceleration for Americans?

Always keep in mind that Miu Miu in the United States is marginal. So Miu Miu is constantly increasing, and I think that we are doing a good job with Miu Miu joining the brand to many different city and city clusters, even where we don't have stores through OmniLine projects. I think that we're really doing a good job there. So the sequential improvement is obviously coming specifically from Prada. I mean, both are growing, but Prada is big, is much bigger.

Okay, I understand. So maybe also from Retail Matrix perspective, what could be the main supporting on the Prada core brands recovering in the U.S.? ? Is it traffic or is it more coming from the price mix?

Again, sometimes all my conversation on Prada was to allow you to understand where we are. I just said that traffic is not helping, that we are reaping the benefits of our retail investments and that our product launches were good. This is what I'm saying. It's a like-for-like growth. We had no real growth, but the improvement is all like-for-like, and hopefully we will see positive results soon.

Thank you very much, Helpo. It's a pleasure. The last question is regarding the development of other categories like jewelry. Right now we see gold price has been going in a very good trend, and we also know that Prada has been launching a very good sustainable gold collection. So just wondering how the jewelry category is performing. Thank you.

Again, I will repeat, we just launched a new collection. The name is Color Vivant. We had a fantastic first week in New York and now we will tour the most important cities in the next three, four months with this collection. And we're very proud of it. We're really very proud of it.

Thank you. Operator, thank you. Thank you.

We are now going to proceed with our next question. And the next questions come from the line of Luca Solka from Bernstein. Please ask your question.

Thank you very much for taking my question. Buongiorno, Andrea. My first question focuses on the very significant creative environment that we have now in the industry with more than 15 brands launching on the catwalk with new creative directors. There's going to be a lot of new products hitting the stores. starting next year. Are you thinking about that? And are you sort of planning anything that could help you ensure your fair share of consumer attention? And are you at all thinking about the environment that could become more competitive?

I think that this is what will happen. This is what I'm saying when I'm saying that the next six months will be a change. So first of all, with all this happening, I hope that we will also attract some traffic back. So we will all be benefited by some more traffic, which I think we would all love. And I think that much of this is also trying to help this industry to come back to be more desirable. So our fair share, I can tell you that during the shows, we had our fair share. So, I mean, we were not a novelty. We were not something new, but we had our very similar fair share of contacts, gratitudes, happiness, and reactions to our show. So, The first step of that was very positive. And the second, I think that we are very, very focused on the first six months of next year. Very, very focused.

Understood. Thank you, Andrea.

My second question is on Eyewear. Prada, the Prada Group, together with Armani, is one of the two cornerstones of the Asilo Luxottica licensed business. Asilo Luxottica has been very proactive in coming to the market with new products and thinking about smart glasses. Are you planning to innovate with them? And what do you foresee in this important license of yours?

So... So what I can tell you is that Prada has always been on the forefront of innovation and we will continue to be through all our partnership and obviously our partnership with Luxottica is paramount on this.

All right.

I will take that as an endorsement that you're about to do something new, possibly. And then my last question was on retail. Prada has been a pioneer in establishing high-profile flagship stores. I'm thinking of downtown New York or Omotesando. Is part and parcel of your strategy to potentially trim the long tail of stores and reduce the overall number of stores for the brand also to beef up and build even more impressive and bigger stores in your flagship locations? And is that something that we need to take into account when thinking about your cost profile as far as supporting these stores is concerned.

I agree with you. This is our thinking and before I was saying that maybe a year ago we were also considering some increase in numbers of Prada. Today I think there is a remix. Our long tail is too long. And on the other side, the benefits we are having, especially nowadays where we are including so much hospitality, we're including privacy, we're including love, these bigger places are what we need. So we are working on at least five or six projects. And on the other side, we're also working on trimming the long tail, as you were calling it.

Perfect. Grazie mille. Thank you very much indeed, Andrea.

Thank you. Thank you. Operator, grazie. Next question.

We are now going to take our next question, and the questions come from the line of Thomas Chauvet from Citi. Please ask your question.

Good afternoon, Andrea. Thanks for taking my question. I have three. The first one on next year's We don't hear you.

We don't hear you. You're very disturbed.

Is it better now? Yeah. Apologies for that. Yeah, sorry. Thanks for taking my question. I have three. The first one, I was looking at consensus next year where the market is expecting another year of slight EBIT margin pressure. I think 70, 80 bps. Andrea, you mentioned earlier the FX head-winning on margins, but beyond that, it looks like the total OPEX next year is expected to grow at around 11%, 12%, so likely to grow faster than sales. You talked about how your efforts are starting to pay off, so I was trying to understand how you think about the major costs and capex plans for next year. You talked about retail earlier. Is there anything else that would justify another year of double-digit OPEX growth? That's my first question.

Hi, Thomas. I wouldn't get into that now. I mean, let's talk about 2026, you know, as we always do when we report to the full year results. Also, you know, consensus at the moment, I believe, may be not entirely accurate due to the fact that, you know, some may already have included, you know, Versace, some others may have not. So let's... As I said, let's push this discussion to later and let me reiterate again that vis-a-vis what we always said in terms of priorities, but also how we want to handle our profitability, nothing new to report.

Okay, thank you, Andrea. My second question on the Prada brand retail performance, any color you could provide on qualitatively perhaps on full-price stores versus outlets, a bit unaspirational consumer, seem to be coming back in some geographies. We see traffic improvement. Is that benefiting maybe a bit more your full-price stores? Any color on that would be useful.

The color I'd give is that outlet for us has remained a bit of a drag. So when we look at the, you know, retail overall performance, yes, bear in mind that, you know, full price is above, you know, the total number because, you know, you know the path that we took on outlets and, you know, that has been continuing.

Thank you. And finally on beauty, I think earlier this week, LORELCO, said Prada had reached over 500 million euros in beauty sales only four years, I think, after you began the partnership, I think it was 2021. How much bigger do you see the opportunity there, considering Nicolai Ioannidis also said that Saint Laurent was achieving nearly 3 billion of sales, so six times more than Prada for a fashion brand, which is quite smaller. than the Prada brand, and just would be very helpful within the royalty line. You had $100 million in nine months, a very good number. I guess maybe $130 million annualized. Could you give us a very rough idea of the revenue split of that royalty stream between beauty and eyewear? I know eyewear is the majority, but what kind of majority, please? Thank you.

So the beauty market is obviously much, much bigger than the eyewear market. We have come to the beauty market probably as last. We're gaining huge ground. The launch of Paradigma, the new men's fragrance in August, September has been a real hit and a real success. We're very happy of the partnership with L'Oréal. You should have asked the question to them if they see us larger than Saint Laurent in the long term or not. But having said that, we are constantly growing. We are not in a hurry. Luxury is patience. And we love the work we're doing together. And I think that we have a long journey of growth together. And during Q3, I think, we also launched the first Miu Miu Fragrance, and even that was a Miu team, even that was a great success. So the only thing I can say that is we're very happy of the partnership with L'Oréal.

And the split, perhaps Andrea Bonini, anything you can share? Is it 80-20, 75-25 ballpark between eyewear and beauty, or it's something you don't want to share?

It's not something that we disclose, but, you know, you said it. Iowa is a bit bigger, for sure.

Okay, only a bit bigger. Okay. Thank you. Next, you. Thank you. Operator.

We are now going to proceed with our next question. And the questions come from the line of Oriana Cardani in Teso San Paolo. Please ask your question.

Yes, good afternoon. Thank you for taking my questions. I've got two ones. The first one is on pricing policy for next year. Do you expect the price increase in 2026 to be lower than in 2025 or similar? And do you plan differences among regions?

We have kept a kind of method, a rule, with two moments of the year where we do a kind of maintenance on prices and maintenance of differences between regions. And I think we will keep on doing similar things in 2026.

Okay, thank you. And my second question is on the growth by category in Q3, which product categories grew the most in the quarter for Prada and Miu Miu?

Thank you.

On Miu Miu, the category which has grown the most, as I was saying before, we had a very balanced growth of product categories across the world and across products. So I wouldn't argue too much. And I would continue saying that obviously ready-to-wear is the cornerstone of Miu Miu. Similar on Prada, where we have seen an acceleration on leather goods. I think that this is the most important thing we have seen. Great resilience on the rest.

We have seen a good growth on an acceleration on leather goods.

Thank you very much.

Operator, thank you.

Thank you. We are now going to proceed with our next question. And the questions come from the line of Li Wei Hu from CICC. Please ask a question.

Good afternoon, Andrea and Andrea. I have only one question. Building on what you said, Mr. Guerra, China might not have as fast a growth as before. That's my understanding with Plateau. So with that judgment, I wonder about product groups' future commitment to China, especially when the new generation comes in. And more specifically, maybe, I want to understand our license or lease agreement with Rongzhai. I read about it. We have signed a 10-year agreement in 2011. So I wonder, have we extended that? And are we going to continue to invest heavily in China going forward? Thank you.

You know, China is relevant. China has been always progressing and evolving during the last 15 years. It's not a 12 or 18 or 24 months that make your strategic plans change. Obviously, some capex may have been diluted but nothing special. And Rongzai, our 17th century building in Shanghai, has become, for Prada it is, and it's becoming every day more our place, our epicenter. And I would suggest every one of you, when you are in Shanghai, to go to the Prada Café, to the Mishan Café in Rongzai, And I would rate it the most beautiful cafe in the world.

Thank you very much.

Thank you. Operator?

Thank you. This concludes the question and answer session. I want to hand back to you for closing remarks.

Grazie. Arrivederci. This concludes today's conference call.

Thank you all for participating. You may now disconnect your line. Thank you and have a good day.