PRADA (01913) fell more than 6% in afternoon trading. At the time of writing, the stock was down 5.36% to HK$36.4, with a turnover of HK$805.056 million.

The company recently released its first-quarter 2026 results. At constant exchange rates, net revenues reached €1.428 billion, representing a 14% year-on-year increase, with organic growth of +3%. Exchange rate fluctuations had a negative impact of 7.4 percentage points, resulting in reported growth of 6.4%. Retail sales amounted to €1.245 billion, up 10% year-on-year, with organic growth of +1%.

UBS noted that PRADA's retail momentum in the first quarter of this year was weaker than expected. Overall organic sales grew by 3%, slightly above the bank's forecast, primarily driven by a 17% increase in wholesale business. However, retail trends were softer than anticipated, with retail growth for the Prada brand and Miu Miu brand at 0.4% and 2%, respectively, both below UBS's estimates.

UBS further stated that management commentary may provide short-term confidence for the early part of the second quarter, but it is still premature to turn bullish. This is mainly due to the significant slowdown in Miu Miu's growth rate and cyclical concerns surrounding the Prada brand in an increasingly competitive luxury market amid geopolitical uncertainties.