Prada Earnings: Strong Progress in EBIT; Miu Miu Is the Top Performer

We maintain our fair value estimate for narrow-moat Prada at HKD 51, with the company reporting EBIT of EUR 1.062 billion, aligning closely with our estimate. The gross margin reached 80%, marking a 160-basis-point increase year on year, underpinned by improvements in average pricing, channel mix, and enhanced scale. Notably, the company demonstrated significant progress in profitability, with EBIT growing by 26%, despite operating expenses rising by 15% at constant exchange rates, mainly attributed to increased marketing expenditure, variable costs, and labor expenses. For 2024, the company expects to deliver above-market growth.