Please also note that today's conference is being recorded. I would now like to hand the conference over to Mr. Andrea Bonini, Group Chief Financial Officer. Please go ahead, sir. Good afternoon, everyone, and thank you for joining Prada Group's first half 2026 results call. This is Andrea Bonini, Group Chief Financial Officer, and I am delighted to be with you again. I am joined by Mr. Andrea Guerra and Mr. Lorenzo Bertelli. The agenda for today's session is on page four, and as always, it will be followed by Q&A. As a reminder, during today's call, we may discuss forward-looking statements, which are subject to risks, uncertainties, and factors beyond our control that could cause the actual outcome and returns to differ materially from such statements. Please refer to the disclaimers included on slide two of our presentation. With that, I will hand over to Mr. Guerra. Hello, welcome from my side as well. With the end of 2025, for sure we have completed a fantastic cycle of constant growth and expansion for our Prada Group. I think we have been all very pleased for this long journey, and I think that we also paved and created the foundations for the new cycle. In 2026, as we already talked about it earlier in the year, we are building a new cycle. A new cycle which is pretty simple, and is made of a constant solid growth for Prada, a normalized but substantial growth for Miu Miu, and a new brand and creative journey through important milestones for Versace. I think that these are very important objectives and also very simple ways of saying that we want to build again, this new cycle of growth on our three main brands. At the end of this first semester, we have been able to accomplish our fundamental objectives on all three brands. I would add Church's included. We are happy of this first six months and ready for the next. In details, this means that the group overall growth at constant FX first half has been 16%. Organic, without Versace and at constant FX, at 5%, with an acceleration in Q2 at +7% on a 6% of a year ago. Going to the brands. Prada, solid growth and maybe something more. Since January, we have seen an acceleration on all important KPIs regarding new clients, regional spread, average price. We have been dynamic. We have offered a number of different projects to the market that have been appreciated. We have grown all categories and always keeping in mind that Middle East is reducing our 6% growth in Q2 by 100 basis points. Miu Miu, we had to normalize. We normalized. We're here today normalizing, but with great desirability and love for the brand. This is something that it's there and will continue to be there. This will remain our North Star without shortcuts. We had to adapt mentally to a new way of doing in a new world of normalized growth. Took some weeks, maybe some months, between the end of the year and beginning of the year. I think that today we are ready and committed. We delivered a positive 3% on a 40% of a year ago. On top of this, I think that we are also well equipped for the second half with a complete new collection of leather goods that I think can really help us in maintaining the rhythm. Middle East impact in Q2 has been something around 300 basis points. I would say that the Miu Miu effect from the Middle East has been quite big. Versace. First six months of the year, in line with expectations, top line and bottom line. Having said so, this means that we worked hard on many different things in these first six months, organization, synergies, costs, journey, commercial milestones. It's a long journey. I think that we started it. Since July 1st, Pieter Mulier is on board. We are extremely happy about it. Now we have another tough six months with no show. We need to fight. We need to get all the right opportunities and not burn any of them. We are all working on it. Even for the Versace brand, these first six months have been in line with our desires Thank you. Lorenzo, you can take it from here. I will be back for our closing remarks. Thank you, Andrea. Good afternoon. The first six months of the year have shown once again that Prada is much more than a fashion brand. It's a creative platform where fashion, culture, innovation continuously reinforce one another. Everything starts with creativity. Our fashion shows and campaign continue to express a distinctive point of view on contemporary society while exploring new artistic and cultural territories. Prada Nylon, Days of Summer, and the Spring/Summer 2026 campaign were certainly among the highlights of this first half of the year. Beyond fashion initiatives such as Prada Mode and Prada Frames foster dialogue across disciplines and creative communities. While the presentation in New York of the latest chapter of our partnership with Axiom Space further reinforces Prada's unique positioning, the intersection of design, advanced production development, and high-performance material. We also continue to elevate the brand experience through landmark destination. The announcement of Prada Galleria project in Milan, which we will officially unveil in September, reflects our ambition to create immersive spaces where hospitality, culture, and retail come together to express the Prada universe in ever richer and more engaging ways. Prada's ability to connect product, culture, and experience remains one of the brand's defining strengths. Looking at Miu Miu now. Throughout the semester, fashion show campaign and special projects such as Miu Miu Upcycled continue to shape a distinctive vision of femininity, while signature culture initiatives including Summer Reads, Women's Tales, and Dirty Blizzard further strengthen Miu Miu's unique voice in contemporary culture. For the reopening of Ginza flagship in Tokyo, Miu Miu debuted with Chat Club, a celebration of the brand's longstanding connection with Japan through a unique cultural form promoting creative exchange. Collaborations such as the one with tennis player Coco Gauff continue to engage new communities, extending the brand relevance well beyond fashion. Miu Miu allure continues to lie in its ability to evolve and expand its reach, attracting new audiences without ever compromising on its free-spirited identity. Moving now to a brief update on Versace. As you remember, we have discussed in more detail the strategic priorities during our call in March. Those objectives are confirmed, and so is the action timeline. During the first six months of the year, the brand has performed in line with expectations as we set the basis for a gradual improvement of the quality of topline. Retail execution continued to be a key area of focus alongside the rationalization of the network with selected closures of non-strategic stores. Most importantly, the arrival of Pieter Mulier as new creative director marked the beginning of the brand's aesthetic repositioning. We welcome Pieter's visionary talent, and we wish him good luck with his exciting journey. In regards to our ESG target, over the past six months, we have continued to make tangible progress across our key sustainable priorities. We advanced our transition to lower impact raw materials, achieved the ZDHC accelerator status in recognition of our commitment to responsible chemical management, strengthen the collaboration to accelerate supply chain decarbonization, and further embrace circularity through the latest Re-Nylon collection. At the same time, we continue to invest in our people by advancing our D&I agenda and promoting gender equity, expanding trade initiatives, and launching a global No Violence Awareness Journey to foster a culture of respect. Through SEA BEYOND and our educational partnership, we expanded our positive impact by engaging students and children in environmental education, constantly promoting initiatives aimed at inspiring awareness and empowering future generations. I will now leave it to Andrea Bonini to walk you through the financial review section. Thank you. Thank you, Lorenzo. The group reported net revenues in excess of EUR 3 billion, up 16% versus H1 2025 at constant FX. On an organic basis, revenues grew 5% year-on-year, with Q2 accelerating to +7%. This performance marks the 22nd consecutive quarter of organic growth at group level. Exchange rates had a negative impact of 490 points on revenues, and the increase at current exchange rates is therefore +11%. Retail sales for the period totaled EUR 2.6 billion, up 3% organic versus H1 2025 at constant FX, against double-digit comps of +10% last year. EBIT adjusted was steady year-on-year on an organic basis as greater marketing investments were offset by efficiencies and cost discipline in other areas, including corporate, retail, and industrial. Including Versace and the FX impact, EBIT adjusted reached EUR 530 million with a margin of 17.4%. Net cash flow improved year-on-year, even in reported terms, and we closed the semester with a net debt position of EUR 693 million. Moving to slide 14, net revenues by channel. The group recorded net revenues of EUR 3 billion in the first half of the year, up 16% at constant FX, +5% organic. At retail level, sales reached EUR 2.63 billion, up 12% at constant FX, +3% organic against +10% in H1 2025. The second quarter saw an acceleration to +5% from +1% in Q1, despite the greater impact of the conflict in Middle East. The region had a negative impact of approximately 1.5 percentage points on retail organic performance for the semester. Wholesale was up 40% over the semester, +20% organic, sustained by both independent wholesale and duty-free. You may remember H1 2025 was impacted by some negative phasing effects on deliveries and year-on-year growth benefits of that this year. Our selective strategy remains unchanged. Trends were positive on royalties, up 73% at constant FX, +12% organic, supported by both eyewear and beauty. Turning to next slide, retail sales by brand. Prada reported retail sales up 3% in H1, strengthening to +6% in the second quarter, a very positive performance underpinned by like-for-like full price sales. The improvement was broad-based across regions, with notable strength in Americas, Japan, and APAC. Miu Miu remained highly desirable, continuing to show positive trends. Retail sales were up 3% in the semester on +49% in H1 2025, with Q2 performance in line with Q1. The Middle East had a negative impact of three percentage points on Miu Miu's performance in the six months, as the brand has higher than group's average exposure to the region. As for Versace, we are pleased with the performance, which was in line with expectations, with the brand contributing EUR 219 million to retail sales in H1 2026. Moving to the next slide, retail sales by geography. Asia Pacific continued to show strength, growing at +15% at constant FX, +6% organic. Prada made further progress in Q2, supported by solid execution and positive trends across the region, and Miu Miu's growth remained robust throughout the period. Performance in Europe was up 5%, -4% organic, with Q2 showing signs of improvement, supported by a recovery in both tourist spending and local demand. The Americas remained buoyant, up 37% constant FX, plus 17% organic, with Q2 accelerating on higher local demand. Both Prada and Miu Miu continued to benefit from strengthened organizations and investments. Positive performance in Japan, up 6% in H1, plus 2% organic, with Q2 showing improving trends supported by solid local consumption and increased traveler demand. Finally, the prolongment of the conflict continued to weigh on Middle East, with the region down 24% in the semester. Local demand remained relatively resilient over the period, improving quarter-on-quarter. Turning to next slide. Underlying profitability was steady year-on-year, measured on organic basis. Efficiencies, cost discipline, and operating leverage helped offsetting higher marketing investments, in part due to phasing. Factoring in Versace and FX, EBIT adjusted margin landed at 17.4% or EUR 530 million. Of the roughly 500 basis points of dilution versus the organic EBIT adjusted margin, 2/3 come from Versace and 1/3 from FX. Moving to slide 18, CapEx for the first half of 2026 was EUR 226 million. In retail, we balanced capital allocation across new openings, renovations, and relocations, and we also progressed with the planned store closures. Strengthening the industrial platform and advancing the digital transformation journey continued to be the other key area of focus. As a reminder, we expect CapEx as a percentage of sales to start reducing from the current fiscal year. Moving to the next slide, net working capital reached EUR 956 million, including Versace, and remained stable at 15% of net sales in organic terms, reflected continued effective working capital management. Lastly, the group retains a solid balance sheet, closing the semester with a net debt position of EUR 693 million, after a CapEx cash out of EUR 247 million and dividend payments of circa EUR 400 million. With that, I will hand over to Andrea Guerra for his closing remarks. Closing remarks. Our storyline for this year is very clear, and I would say also simple, and I will stress it again, and I will try to describe a few things that we're doing, and I really think that these are vital going forward. On one side, top-tier consumers drive the market, and they're even stronger than before, and I think that we have been delivering, and we will continue to deliver. Even this huge epicenter of Prada Galleria will help on this. I think that we are ready to pamper and service these consumers the best possible. On the other side, new ideas, new projects need to happen to attract to the industry younger clients. I think that this is one of the biggest challenge of our industry, and I also think that, Miu Miu first, Prada second, we are ready for this. Third, when we talk about brands, credibility and desirability are the two mantras. I think that being credible in this world is half of the job. Being desirable in this world is the other half of the job. The equation is clear, I think that with our creativity, our creative directors, our way of managing our brands, our long tenure in managing our brands, I think that we are in one of the best positions to satisfy this. There is no obvious growth trends across the world. There are some in some countries, but not all across the world. I think that even if there is no obvious growth patterns in some areas of the world, there is still huge opportunities for us. This is what we are doing. I said it at the beginning, what are the objectives for Prada, what are the objectives for Miu Miu, and what are the objectives for Versace. We will continue working around them. [Non-English content]. We can now switch to your questions and comments. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Once again, please press star one one on your telephone and wait for your name to be announced. Please be aware that we will take and answer one question at a time before moving to the next question. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. Once again, please press star one one to ask a question. We are now going to proceed with our first question. The questions come from the line of Luca Solca from Bernstein. Please ask your question. Yes. Hello. My first question is about retail space productivity. You have developed Miu Miu very significantly in the past few years. You also increased the retail network. Could you give us a sense of how the sales per square foot would compare across the three main brands that you have, Prada, Miu Miu and Versace? [Non-English content]. Hello. You are asking, obviously, a question that we will not answer, but I will give you some flavor around it. I think Miu Miu is top of the industry, considering the size and considering, basically, in five years, the growth we had, and at the end, we basically enlarged the network by 10 stores. I think it is top of the industry. As we all know, Prada had to recover, we knew it. I think it has been one of the first topics we discussed four years ago. If you look at Prada, since 2021, 2022, 2023, 2024, 2025, 2026, everything you have seen, it is like for like. Did we improve? Yes, we improved. Are we with the best? No, I think there is yet a journey to be done. On Versace, I would not begin today the conversation. Next year, we can begin the conversation. Of course. [Non-English content], Andrea. My second question is about Miu Miu. Some of your peers at some point, with smaller brands, at some point, very significant success, except, they could not maintain it. This was on the back of the brand becoming very hot or a product becoming very popular or whatever. I could name names, but I will abstain from that. What safeguards and what actions are you planning in order to avoid that this sort of marked normalization turns into fading? What can you potentially field in order to maintain this level and continue to grow, as you stated your ambition, the Miu Miu remit? Thank you very much. First of all, I think there is a mathematical thing to be taken in consideration, that is, we have grown very significantly from a low baseline. Yes, we have grown significantly. We have reached a significant level of revenue, just high of the EUR 2 billion, but we were starting from EUR 455 years ago, it means that those percentage growth were there. I think that one basic thing happened. We tried our best not to take shortcuts and to keep things as simple as we could. What do I mean by that? six years ago, five years ago, we had, maybe I go wrong by some units, 155 stores, and today we got 165 stores. We did not follow success and opened wherever people were offering whatever to open, and we did not even increased significantly the square footage of our stores. We did not enter new categories that were not really part of our core brand. You know how many times people have been asking us to enter men, to enter licenses, or to enter whatever you can think about. When you have success, the only thing you should be able to say is no to basically 90% of the proposal that are done to you. This is what we are trying to do, and believe me, if you were asking me, let me include Middle East in the equation. Andrea, would you sign to be at +5%, +6% on Miu Miu in 2026 on a +40% of 2025? I would have signed. Understood. Lastly, if I may ask another question, this has to do with pricing. We have seen a significant like-for-like price inflation in soft luxury. When we look at the growth, again, in the broader market, looking at your peers, we see that those that are resisting, sort of adjusting their mix and coming to engage with the middle-class aspirational consumers, are the ones growing the least. I wonder, you have shown remarkable ability to increase prices, but at the same time, we are facing a polarized market with the top spenders spending on the front foot and the aspirational consumers struggling. What is your thinking and your actions or your plans about maintaining the engagement of aspirational middle-class consumers who are, nevertheless, 55% or so of the total market? Let me put it this way. We're talking about Prada now. The biggest opportunity we have is with top spenders. If you look to our price range, we have always been pretty shallow with our price range. We can discuss our entry price. I'm pretty comfortable in mid-2026 with most of our new entry prices in many different product categories, from ready-to-wear to leather goods. The real challenge we have, the real opportunity is to satisfy an unbelievable demand from top spenders Prada has that somehow we have been, in our history, reluctant to satisfy. I think that we are proving ourselves that we can play in different segments. I don't want to talk about Hermès price points, okay? I'm ready to talk about really keeping our entry price stable and being able to enlarge the price range. This is what we're trying to do today because the top spenders are there, they're healthy, they're wealthy, and we need to gain our fair share there. [Non-English content], Andrea. Next question, please. We are now going to take our next question. The question comes from the line of Anne Bismuth from HSBC. Please ask your question. Yes. Hi, I have two questions, please. The first one is on the Prada brand. Would it be possible to have an idea of what was the split of the growth between volume, price, and mix, and which category did perform best in Q2? I assume the Q2 already reflects the good reception of the new handbag line that has been launched recently. Thank you. You mixed a message I was giving. The new bag line was Miu Miu, it was not Prada. Yes, you have also launched a new handbag line for the Prada brand recently. I was referring to Miu Miu, obviously we have been launching new Prada lines on bags during this first semester, yes. I would say we were slightly positive on volume, it was more a mix effect rather than a price effect. In terms of categories, we were on all categories positive, men and women. On shoes, we were very shy negative. Okay, my second question is regarding the marketing spending. The marketing to sales ratio was a bit more elevated in H1. Can you remind me what was linked to, should we expect the marketing to sales ratio that is both similar to last year, for the full year? Thank you. Hi, Andrea Bonini. No change in marketing vis-a-vis what we said before in the sense that, we would expect it to be the incidence at the end of the year inline with last year or maybe slightly above that. Yes, in the first half, there was a bit of a phasing effect, no changes otherwise. Any other question from you, Anne? No. Thanks very much. Okay, next question. Thank you. We are now going to proceed with our next question. The question comes from the line of Erwan Rambourg from Goldman Sachs. Please ask your question. Yeah. Hi there. I hope you can hear me. I'd like to squeeze in three if I can. Erwan Rambourg from Goldman Sachs. First, on Versace, now that you run the brand, I don't know if you can share maybe some positive or negative surprises since you took over the management of that. Linked to Versace, I think, Andrea Bonini, you mentioned that dilution in the EBIT margin in H1 was about 2/3 of the 520 basis points, about 350 basis points. What do you envisage the dilution from the integration to be in H2, please? Thank you. The first part of the question is Lorenzo speaking. Negative surprise, none. We find out what we were expecting during the period of the acquisition. I would say positive, the people, the environment, everybody's super engaged. There is good energy, nice energy, also especially from July, Pieter joined the group, there is a lot of excitement and positive energy, this is the positive. Other than that, I would say no negative surprise, that's it. Andrea? Hi, Erwan. Not significantly different for full year versus H1. Okay. Meaning 350 basis points of dilution possible? Yeah, thereabout. Okay. Thank you. My second question is on. It's obviously quite surprising to see the Prada brand growing at a faster pace than Miu Miu this quarter. Obviously we know what the base is, so it doesn't mean much. Prada is growing at a faster pace very clearly than the market. I'm wondering, what are you doing right and how can this market share gain momentum sustain? Obviously the growth of Miu Miu has been very visible. It's now five years that Prada is growing above the market. Yeah. Again, I repeat, like for like. I think it's a question of positioning, it's a question of credibility, and I think even a little bit proactivity to the market with ideas, projects, and things that can allow us to engage different segments of consumers. I think this is what we have been able to do so far. Obviously, now we need to go forward, we need to keep it on, and we need to continue to fight. Okay, great. Thank you. Maybe last short question, maybe I missed this, I'm sorry, during the presentation, wholesale business underlying is growing 20%. Is there a one-off in there? How do you think about sustainable growth in that channel? There is. I mentioned it because more than this year was last year with a bit of a negative one-off in the sense that it was phasing with some deliveries more delayed and therefore we benefit of that this year. Growth year-on-year is higher, no changes in terms of underlying strategy and therefore also expectation year end. How much would you imagine the channel to grow on a full year basis? We have an approach. You look at the past couple of years and the approach. Yeah. Okay. The approach remains selective. Okay, great. Thank you. Thank you. Next question, please. We are now going to proceed with the next question. The question comes from the line of Oriana Cardani, Intesa Sanpaolo. Please ask your question. Yes, good afternoon. Thank you for taking my two questions. The first one regards the Chinese cluster. Can you tell us the performance of this cluster in second quarter for Prada, and if there were any differences in trends between Mainland China and Greater China region? In general, what is your opinion on the trading environment in China and your outlook for the second part of the year? Thank you. Hi. Andrea Bonini. I'll go beyond that in the sense that I'm sure that the question will come. In addition to Chinese, I'll give you also some flavor around the other nationalities. For Chinese, it was very positive. The second quarter was up double-digit, it further improved versus Q1. It was positive both in terms of local spending, but also what they spent abroad. Having said that, it's not easy. I mean, it's not without challenges in the sense that, we continue to see from a traffic point of view industry-wide, at least what we pick up, a challenging environment in terms of traffic. Again, it's a challenge day in, day out, but the team did a great job and they managed to achieve a very good result. Europeans, it was flattish in Q2, slightly improving. North Americans is clearly the very positive note. Very positive demand and further accelerating quarter-on-quarter. Domestic consumption and also, it was flattish for Japanese clients. Understood. Thank you. My second question is on the gross margin. Do you expect gross margin in the second part of the year to be similar to that of the first part? Yes. Okay. Thank you very much. Thank you. Next question, please. We are now going to proceed with our next question, the question comes from the line of Natasha Bonnet from Morgan Stanley. Please ask your question. Hi. Good afternoon, and thank you for taking my questions. I have three, if that's all right. The first, Andrea, regarding Miu Miu, which grew 3% in the first half. At the start of the year, you'd mentioned potentially growing double-digit for the full year. Do you think that's still feasible? Then also, can you give us maybe the spacing contribution in H1 from Miu Miu? Then you also mentioned that, the Q2 growth of +3 was a normalized level. Obviously, that includes a 300 basis point impact from the Middle East. Would you say that mid-single-digit growth is a good proxy for 2027 from Miu Miu at a normalized level? If whatever I say, then you will tell me that I said something. I think that Miu Miu has an opportunity to grow between five and 10 long term. I've got no doubts about this. Looking to this specific year, I really thought that we would have seen an industry improvement during the year that we are not exactly seeing in terms of traffic. We will continue to fight. We were at +6 in Q2. We were in +3 in Q1, we have seen that kind of improvement that I was talking about. Obviously, going forward, we have a part of the world which becomes a little bit easier in terms of comps, while another part of the world remains pretty challenging. For any of our brands, going from 5 to 10, I think that that would be a solid performance going forward. In terms of space, I would say that the +6 is with the like for like, 0 - 1. Thank you. My second question would be on Prada, which obviously has seen an impressive re-acceleration in the second quarter. Can you give us any more KPIs of what has really driven this re-acceleration? I know you said full price sales are really strong. Do you expect this to continue, and are there any regions where the brand is resonating particularly well? If we go back, it's a long story. We knew that we had to catch up in U.S. We are catching up. I think we are growing, and we are really doing what we have to do. I think that is yet a long journey. In China, for sure, again, we needed to go back to our fair share, and I think that we are trying to achieve it, but still, it's a long journey. In Europe, most probably it's where we had grown the fastest in the last four or five years, and this year in some cities, we are not performing as we would love. I think the industry is not far away from what we have achieved. Japan remains one of our places of the world where Prada is loved, and as soon as there is an opportunity with local clients, we are taking it, and we will always take it home. Thank you. Then my last quick question would just be, it was hopeful if you could update us on the group's latest thoughts regarding potentially a dual listing with Milan. Nothing to say. Nothing to add. Next question, please. We are now going to proceed with our next question. The question come from the line of Daria Nasledysheva from Bank of America. Please ask your question. Hi. This is Daria from Bank of America, thank you for taking my questions. I have three, if I can go one by one. For Versace, you have already closed 10 stores, if I'm correct, since the end of last year. How many stores are you planning to close, rationalize over the next 12 months? If you could provide any color on that. Hi, I'm Lorenzo. I'm taking the question. Yes. There is a rationalization of the network, so we will have closure and openings. I think in the next year we'll see more downtrend around other 10, and also looking for better location. You think from 2028 when there is more clearness on the market of Pieter collection, we will look at, again, looking at the better location. Let's say we will have another slightly smaller network next year, from 2028, we will look at opportunities of better location. Perfect. Thank you very much. If I can ask on profitability, you have kindly helped us frame the FX impact on EBIT margin in the first half. Could you please provide any indication for the second half and respectively the full year? How are we thinking about FX? Hi. I'm Andrea Bonini. I'm not going to be specific because I think that FX has proven volatile and rather unpredictable, considering also the evolution of geopolitics and so on. I would say we would expect in the second half, less of a headwind, in terms of both revenue obviously, also from a profitability point of view, not going to be more specific than that. Thank you so much. My last one, if I can try. Could you please share any color on trading so far in July, particularly for Prada brand, how should we be thinking about the second half revenue progression, also considering a more challenging comparison base, not just for yourself but for the industry as well? If you could share some thoughts on the outlook. Thank you. First of all, we have seen last week of June and a couple of weeks of July, which were soft. Then we went back to a good rhythm. It looked like a little bit our January. It is very complicated, I have to tell you, to answer in a proper manner to your question. There are so many things happening. I do not know. As I said at the beginning of the year, we have to prove that Prada can have a solid growth throughout quarters, throughout the years. We are doing everything we can to achieve that. That is it. Let us see how the world goes. We all thought that what happened in Middle East and Iran was finished. Then restarted all at once. Let us see what happens in October. Let us see what happens in Israel. It is very complicated. I do not want to make it too macro. At the end, everything is influencing everything. The market, which is less readable today is China. It is much dependent on events, on activities, on holidays, on moments of tourism. That is the less readable market today. As I said, it is the market where Prada has the biggest opportunity in market share gaining. Thanks a lot. Next question, please. We are now going to proceed with our next question. The question comes from the line of Chiara Battistini, JPMorgan. Please ask your question. Thank you very much. Good afternoon, everyone. My first question, going back on the gross margin, please. I'm guessing that excluding the Versace consolidation gross margin might have been up. Am I right, first of all? Second, also considering the channel mix, I guess was negative, given the strength of wholesale. Can you talk about the underlying drivers of the gross margin on an organic basis, please? Thank you. Hi, Chiara. Andrea Bonini. You're right, slightly up, excluding the impact of Versace. I would say that from an underlying point of view, pretty much unchanged, various effects, as you say, compensating each other. Also, we talked before, you mentioned wholesale, but if I have to make an example with the opposite sign, we talked before about the performance of Prada being better in full price rather than in outlet. There's various factors. The underlying is pretty much unchanged, then there are some accounting effects and others that helped a bit, but it's slightly up. Great. Thank you. The second question on South Korea, unless I missed it, I don't think you've commented on the performance there. I was wondering if you could give us an update on your performance during the quarter, both with locals and with tourists, please. Very positive. Another bright note in terms of performance and split. I can tell you local better and stronger, traveler slightly subdued. Okay. Thank you. Finally, maybe anything you can share on your next projects on stores for Prada and Miu Miu in H2 and possibly any glimpse into next year, please. Thank you. On store openings. I think that we have a huge milestone coming for Prada, which is September, where we are opening this multi-floor, cultural, artistic, fashion, art, retail, food experience over six or seven floors in Galleria in Milano, mid-September. I think that this will become the epicenter of the epicenters. This will become the place where to host all our friends of the world, all our clients of the world, to allow anyone to really enter into a world which is not just fashion, but it's narrative, it's cultural, it's a place where you can really understand Prada 360 degrees from our roots to where we are today, and to where we will try to be soon. I think that this is the biggest, largest, huge milestone we have. That's great. Thank you. Next question, please. We will now take our next question. The question comes from the line of Thomas Chauvet from Citi. Please ask your question. Good afternoon. Thank you. I have three, please. The first one on the Prada brand, Andrea, you said China was the most difficult market to apprehend. You kindly provided, Andrea Bonini, the performance by nationality, the biggest growth improvement sequentially came from the Chinese cohort. Can you explain perhaps what is happening for the Prada brand in China with the Chinese consumer? Why is it resonating so well now in a very difficult market? I'll say it again. I think in the most humble manner, we're doing our homework. We are underrepresented in China. The team is doing an unbelievable job. I think that we are managing our stores differently. We are managing our relationship with our clients differently. We are today attracting new clients to the brand. Prada Rong Zhai, our Chinese epicenter, is working 360 degrees from the Art Foundation to our marvelous cafe, Mishang, to our apartment for our top clients. We are offering a 360-degrees experience to our clients. It's a tough environment. It's a very tough environment, I have to tell you. Thank you, Andrea. Secondly, on the Middle East, which deteriorated a little bit quarter-on-quarter, can you perhaps comment on what you saw in June and July in the region, particularly with locals? It deteriorated because, Thomas, it's the impact of having three months of impact, right? Rather than one month in Q1. In terms of underlying trends, it was actually improving. At some point, I think we were seeing local demand being back at last year level and therefore proving very resilient. The past few weeks, again, a bit more volatile, sequentially, since the start of the conflict, we've seen an improvement in terms of local demand. Okay. Thanks, Andrea. That was my question, what was the sort of exit rate? You're close to flat in June or July? It was at some point. We've had weeks where it was close and then some other weeks where we're still seeing a negative number, but it was more in the call it -10, -20, rather than -40, -50, as at the beginning of the conflict. Okay. Thank you. Just finally on Versace, just trying to get a bit more color on the numbers. Thanks for the disclosure already, but could you comment perhaps on the Versace performance in H1, particularly in retail? Are you still comfortable with an EBIT loss for the year? I think you had said in line with last year at around EUR 80 million-EUR 90 million. If my calculation is correct, I think the loss was EUR 90 million already in the first half. Were there any restructuring charges in H1, or maybe they'll be in H2 beyond the impact of the 10 store closures that you did? I'll start from this last point. No, we're very far from the EUR -90. Happy on the back of this call with the team, of course, they can help you sort of figure it out where the misunderstanding is, but it's way less than half than that in the first half. Therefore, yes, it's very much in line with our expectation, as we said at the beginning of the year, to keep it in the two digits on EBIT. Look on top line it was also in line with our expectations, if you remember that we provided also some indication of what the contraction, because we do expect a contraction on top line at the end of the year might be. It is tracking that way. I would leave it at that. One point, sorry, I want to clarify because I may have misunderstood Chiara's question earlier, because when I answered about the split of local traveler, it was with reference to the nationality, because I was following up on my previous answer. If the question was related to Korea and not Koreans- Clearly, local are positive, but traveler spending in Korea is also in way much stronger than local. Hopefully that clarifies if there was a misunderstanding. Thomas, sorry, back to you if you've got anything else. Thank you. Thanks, Andrea. I'll follow up with the team. Yeah. You said the EBIT margin for the first half was in line with last year, excluding Versace. If you strip out the sales of Versace and you keep whatever 22.5% EBIT margin, you get an implied loss for Versace of about EUR 90 million. I must have missed something about what you define as organic EBIT margin, but I'll follow up offline. Okay, fine. Maybe it's FX related because as I said, there's two components. Yeah. As you say, I think probably makes sense to follow up later. Thank you. Thank you. Next question, please. We are now going to proceed with our next question. The question comes from the line of Charles Scotti from Kepler Cheuvreux. Please ask your question. Good afternoon. Thank you for taking my questions. Just a follow-up question on Versace. Could you please explain why the brand is weighing so heavily on the working capital? Do you see meaningful scope to improve Versace working capital over time? Thank you for the clarification on the loss at Versace in H1. Could you give us also an indication on the potential free cash flow burn also of the brand in the first half and the expected burn on a full year basis? What I would say is that, let's start with this, because also I think it will help addressing two points with one answer. The reality is, we don't actually see weighting that much in terms of cash flow absorption from working capital and from CapEx as well from Versace was very limited. Therefore, cash flow is not too far away from EBIT, what I can say. Indeed, for what is the rest, if you look at the organic working capital is also stable. Okay. Thank you. I have a follow-up question on Versace. Could you please also give us an indication of the timeline for Pieter Mulier's first fashion shows, and the expected cadence for the arrival of his collection in stores? More broadly, how many seasons or collections do you think it will take before the product assortment is fully refreshed under this new creative direction? This will help us better model the potential timing for the top line inflection. The first collection of Pieter will be La Vacanza, will be launched May next year. To have just his collection in all the store end of second half 2028. I would say every store is 2028. 2028. Okay. Thank you. Just one final question, if I may. More financial question rather than operational. When I look at Prada Group, you continue to deliver best in class growth and profitability. Yet the stock trades at one of the lowest valuation multiples in the sector. Does this disconnect make you consider launching a share buyback, for example, or another, I don't know, significant capital allocation initiative that could unlock some shareholder value? Particularly given that balance sheet remains very strong even after the Versace acquisition. What I would say is, answer a similar question before on that vein, if we had something to announce or to disclose, we would do it, at the moment, there is nothing to disclose. Okay, I understand. Thank you. Thank you. Last question, please. Yes, we are now going to proceed with one last question. The question come from the line of Chris Gao from CLSA. Please go ahead. Okay. Hi, management. Thanks for taking my question. I have two quick follow-ups. The first one is about the performance by cluster for Miu Miu brand. You talk about the performance by class of Prada core brand, we are very happy to see you've been getting very strong growth among Chinese cluster. I want to understand for Miu Miu, by cluster, do you see any difference versus what you see from Prada core brands trends like Chinese, Americans, Europeans? Anything to highlight here? Hi, Chris. Andrea Bonini. Plus and minuses compared to Prada, because also bear in mind that they reflect different journeys in the past years and different also presence in the different geographies, different contribution from the different geographies already. What I would say and sort of point out is we're seeing weaker trends with Chinese and Europeans, stronger trends with Japanese, I'll leave it at that. Thank you very much. This is very helpful. My second question is also regarding your store level investments. We're happy to see the very strong Chinese growth, we understand that during our channel check, we see both your same store sales in China and your enlarged, the renovated store performance are also very good. Right? Basically, we believe what you do in your store investment has helped a lot regarding the acceleration for Prada core brand. Basically, I just want to understand, in the midterm, could you please provide us some more color regarding how many more renovations or enlargement projects as a percentile of your total stores are in your plan? Because we do see it's helping the brand's performance. Thank you. I think this is a trend that we are having since some time, and I would consider nothing changes in the midterm. Most probably, we will cut some stores in China in the next couple of years, or in being second or third stores in some cities. I don't think that those second or third store are valuable anymore. Most probably we will continue to innovate, in some cases enlarging to host proper apartments. On the other side, most probably we're going to cut two or three stores a year for the next two, three years. Understand. Thank you very much. This concludes the question and answer session. I'll now hand back to you for closing remarks. Thank you. Thank you to all of you, and hope to see you soon. [Non-English content] This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.