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While not discussing the acquisition of Versace, Prada Group CEO Andrea Guerra highlighted untapped potential for both Prada and Miu Miu, whose sales rose 60 percent in the first quarter of 2025.

MILAN — While reporting a 13 percent increase in revenues for Prada Group in the first quarter of the year, Andrea Guerra characterized the industry overall as being “in a reshuffle mode that is not close to being finished. I think it will take another 12 months, probably, to see something different.”

For this reason, the group’s chief executive officer believes “this is a period where we can win market share with a great performance, because we have stability on one side, and we are full of creativity on the other side. So I think that stability nowadays is a very positive signal.”

Addressing analysts during a conference call on Wednesday, Guerra said that “normally, the first three, four months of the year are the most delicate ones from a psychological point of view.” He admitted he was pleased with group revenues that rose to 1.34 billion euros compared with 1.19 billion euros in the first quarter last year, but he was cautious about “a market that is not easy.”

He defined 2025 “a very peculiar and very complicated year. We are finding our own ways, and we will continue to fight. We will continue to remain in a positive environment for both brands. But for sure, the last almost 24 months have not been easy, and recently, I would say that maybe we have reached the lowest plateau. We continue nurturing creativity, motivating our people to keep on with this positive double-digit growth.”

The Prada brand’s retail sales were relatively flat at 827 million euros compared with 826 million euros last year, characterized as “a resilient performance against the highest quarterly comps of 2024,” which are expected to ease slightly in the second half of the year, said chief financial officer Andrea Bonini.

Miu Miu‘s sales climbed 60 percent at constant exchange rates to 377 million euros, growing across categories and regions.

Asked to comment on potential overlaps and synergies, Guerra said “we are managing the two brands totally independently. Between all brands in the universe, there are some overlaps, obviously. By growing, Miu Miu has gained market share on everyone in the market. Some brands more, some brands less. And I would say that Prada has been one of the less. Having said so, consumers are free to do whatever they want. We are constantly nurturing brand by brand and inside the brand their consumer segments by their sub-consumer segments. And we are not [having] any thoughts on cross-branding, on overlapping or anything like that. That will never be the case.”

Responding to another question about the two brands, now that the balance between them has changed, the executive said Miu Miu “still is learning a lot from Prada. And there are so many things we can do with Miu Miu because Prada is there.”

Analysts did not ask any question about Versace, the third major brand that is expected to join the group, which also comprises the smaller Church’s and Car Shoe labels.

On April 10, Prada said it is acquiring Versace from Capri Holdings for 1.25 billion euros, with the closing expected in the second half of 2025 upon regulatory approvals.

As for the first-quarter results, group retail sales rose 13 percent to 1.21 billion euros, driven by like-for-like, full-price sales.

Wholesale revenues were up 7 percent to 96 million euros and royalties grew 15 percent to 29 million euros.

While not taking part in the conference call, Patrizio Bertelli, group chairman and executive director, said in a statement that, “We are pleased with another quarter of solid performance. In an increasingly turbulent and uncertain landscape, we continued to execute with confidence and discipline, leveraging creativity and the strength of our organization.”

Agility and flexibility are key in this environment, but “at the same time, we believe it is essential to continue to invest with a long-term mindset, preserving and developing craftsmanship and know-how, supporting our partners and strengthening our infrastructure,” he concluded.

Guerra said Prada’s resilience lay in “a well-balanced product category mix,” and cited the opening in the quarter of the brand’s first stand-alone dining space in Asia at Rong Zhai, its restored historical mansion and art space in downtown Shanghai. “A kind of melting pot of architecture and gastronomic offer between Milan and Shanghai,” the project was conceived by renowned arthouse director Wong Kar Wai. There also was the opening of a Prada Caffè in Singapore.

The Prada brand “continues on its journey of cultural innovation and after a very long temporary gastronomic offer in Harrods,” Guerra said. Rong Zhai, he continued, “is a cultural landmark and it has become the brand’s epicenter in China, with a section dedicated to Fondazione Prada, a section dedicated to the ultimate experience of our clients, and a section in the garden dedicated to the gastronomic experience. I think that this is a big step forward and allows everybody to touch our intentions, our objective, our ambition, to constantly carve society culture with our actions.”

The Chinese cluster remains volatile and back to a single-digit decline against double-digit growth in the fourth quarter and, while offshore spend amounts to 30 percent of the total, it’s still positive and Chinese tourists are “more visible in Europe,” Guerra said.

Speaking about the U.S., he said Prada “can continue to be stable. Every week, every day is a different story, with [ongoing] changes in the region. I think that we have been opening a kind of new era for Prada in the U.S., and this is what we’re trying to do. It’s not easy to comment on today, to be honest, not easy at all and I think the second quarter is still complicated for Prada.”

Prada unveiled a menswear store on New York’s Fifth Avenue, reflecting continuous investments in North America, Guerra said.

At Miu Miu, leather goods remained the fastest-growing category, supported by the spring 2025 campaign celebrating the brand’s signature Matelassé line. Among the highlights of the quarter, the group mentioned the launch of Miu Miu Gymnasium sport-inspired pop-ups and the unveiling of the Miu Miu Custom Studio project. This, said Guerra, “is another step forward in Miu Miu to be part of a larger and stronger community,” helping to interact with it and delivering unique products. The reaction has been very positive “and we are very happy about it,” he enthused.

Responding to a question, Guerra was wary of talking about leather goods icons at Miu Miu. “It’s very complicated. I think that there are some spectacular, successful lines, which I hope will become icons in time. So we are nurturing them, we are cultivating them. We’re working on them,” he said, citing the Wander and the Arcadie models, among others. “We’re doing our best in that I think that we are recapturing our fair market share in leather goods with Miu Miu.”

Guerra said the refurbishing and reopening of the brand’s SoHo store was met with “great success,” and that the company is “heavily working” to expand the brand in the 2026-28 period in North America. ”The perception and request is very high, and we see it online every day.”

In February, Silvia Onofri joined Miu Miu from Napapijri, under the VF Corp. umbrella, as its new CEO.

Group sales in Asia-Pacific increased 10 percent to 438 million euros, despite a challenging comparison base and broadly unchanged market conditions in the region.

Guerra enthused about the new Miu Miu store that just opened at SKP in Wuhan, the brand’s largest in China so far, which had “an unbelievably strong first week.” The outlook is “very positive about the long term future of the region.”

Second-half figures in China are expected to be better because comps are easier, he said, although the Chinese cluster continues to be “volatile.” He added that he hoped “some of the governmental policies will modify a little bit the consumer mood and allow people to spend a little bit more money and save less, but I don’t see today any kind of change. Let’s see.”

Europe was up 13 percent to 334 million euros, lifted by both domestic and tourist spending.

Sales in the Americas rose 11 percent to 201 million euros, despite increased volatility during the period, and boosted by local demand. “We think the impact of a weaker dollar and recent uncertainty may be more visible going forward,” Guerra said.

Asian sourcing is extremely low and, when asked about potential price increases in the States in light of U.S. President Donald Trump’s tariffs, the “maintenance type of increases [of around 2 to 4 percent] would be enough to compensate. But the point is, the impact that matters the most, and it’s harder to quantify, is the one on consumer confidence in the mid- to long-term, on the U.S. economy,” Guerra said. “By June, we will understand what happens with tariffs and what we need to do. We will have to do certain things on pricing, for sure, but I do not know exactly the amount today.”

Japan continued to grow and sales in the region were up 19 percent to 172 million euros, although the increase showed progressive moderation and is expected to continue, said Bonini, “as we saw extraordinary growth over the first half of 2024 driven by local consumption, but also very, very significant touristic flows.”

The Middle East ended the quarter as the best-performing region, with retail sales up 31 percent to 70 million euros.

Thomas Chauvet at Citi said “all stars still seem aligned for Prada.”

The analyst underscored the group was “the fastest-growing luxury company this quarter,” beating a consensus of a 12 percent increase. However, “it was a mixed bag between Miu Miu and Prada” as the former’s growth normalization is not clearly visible yet, while Prada brand’s deceleration in the quarter “was a bit worse-than-feared,” against the toughest comparative of 2024, up 7 percent and up 4 percent in the fourth quarter.

At Bernstein, Luca Solca said the Prada brand’s flat organic growth in the first quarter suggested that “much of this weakness can be blamed on a pull-back in local spending by Chinese nationals.”

Solca believes other nationalities “are at risk of deteriorating further” in the second quarter given the macroeconomic uncertainty and U.S. tariffs “weighing on consumer feel-good and hence luxury spending.” With a scenario that is deteriorating, “slowing growth at Prada and eventually Miu Miu increases the risk of operating deleverage, just as management picks up Versace in the second half, which will be another source of margin dilution.”

Meta has updated the privacy policy for its AI glasses, Ray-Ban Meta, giving the tech giant more power over what data it can store and use to train its AI models.

The company emailed Ray-Ban Meta owners on Tuesday with a notice that AI features will now be enabled on the glasses by default, according to The Verge. This means Meta’s AI will analyze photos and videos taken with the glasses while certain AI features are switched on. Meta will also store customers’ voice recordings to improve its products, without an option to opt out.

To be clear, Ray-Ban Meta glasses are not constantly recording and storing everything around the wearer. The device only stores speech that the user says after the “Hey Meta” wake word.

Meta’s privacy notice on voice services for wearables says that voice transcripts and recordings can be stored for “up to one year to help improve Meta’s products.” If a customer doesn’t want Meta to train its AI on their voice, they will have to manually delete each recording from the Ray-Ban Meta companion app.

The change in terms is along the lines of Amazon’s recent policy change affecting Echo users. As of last month, Amazon will run all Echo commands through the cloud, removing the more privacy-friendly option to process voice data locally.

Companies like Meta and Amazon are eager to hoard these heaps of voice recordings because they are useful training data for their generative AI products. With a wider range of audio recordings, Meta’s AI can possibly do a better job at processing different accents, dialects, and patterns of speech.

But improving its AI comes at the expense of user privacy. A user may not understand that if they use their Ray-Ban Meta glasses out of the box to photograph a loved one, that person’s face may find its way into Meta’s training data, for example. The AI models behind these products require obscene amounts of content, and it benefits companies to train their AI on the data that their users are already producing.

Meta’s hoarding of user data is not new. Already, the company trains its Llama AI models on public posts that American users share on Facebook and Instagram.

Tesla Board Opened Search for a CEO to Succeed Elon Musk

With profits and stock price sinking, board members told Musk he needed to spend more time at company

About a month ago, with Tesla’s TSLA -3.38%decrease; red down pointing triangle stock sinking and some investors irritated about Elon Musk’s White House focus, Tesla’s board got serious about looking for Musk’s successor.

Board members reached out to several executive search firms to work on a formal process for finding Tesla’s next chief executive, according to people familiar with the discussions.

Tensions had been mounting at the company. Sales and profits were deteriorating rapidly. Musk was spending much of his time in Washington.

Around that time, Tesla’s board met with Musk for an update. Board members told him he needed to spend more time on Tesla, according to people familiar with the meeting. And he needed to say so publicly.

Musk didn’t push back.

Tesla has been on a losing streak in the months since Musk, its visionary chief executive, began spending much of his time helping President Trump slash federal spending. Last week, after the company said its first-quarter profit had plunged 71%, Musk told investors he would soon pivot back to his job at Tesla.

“Starting next month,” he said on a conference call about earnings, “I’ll be allocating far more of my time to Tesla.”

The board narrowed its focus to a major search firm, according to the people familiar with the discussions. The current status of the succession planning couldn’t be determined. It is also unclear if Musk, himself a Tesla board member, was aware of the effort, or if his pledge to spend more time at Tesla has affected succession planning. Musk didn’t respond to requests for comment.

During a cabinet meeting on Wednesday, Trump thanked Musk for his government work. “You know you’re invited to stay as long as you want,” Trump said. “I guess he wants to get back home to his cars.”

Any change at the top would mark a major moment for Tesla: Musk has run the electric-vehicle maker for nearly 20 years, though he stepped aside as board chairman in 2018. Musk has been deeply involved in all of his businesses, even those in which other executives handle day-to-day management.

The eight-person Tesla board has been looking to add an independent director, according to people familiar with the process. Some directors, including Tesla co-founder JB Straubel, have been meeting with major investors to reassure them the company is in good hands.

Musk’s detour into government came at a difficult time for his biggest company. Sales of Tesla’s electric cars fell in 2024, the first annual decline in more than a decade. The company slashed prices, which ate into profit margins. Its high-profile Cybertruck, derided for its strange looks, became the butt of jokes by late-night comics.

Musk’s close ties to Trump tarnished Tesla’s brand for some consumers. Making matters worse, the president’s tariffs have complicated Tesla’s business in China, one of its biggest car markets, and a U.S. supply chain that relies heavily on vendors in Mexico and Canada.

Musk’s proximity to the president proved no help on that front. He told investors last week he would “continue to advocate for lower tariffs rather than higher tariffs, but that’s all I can do.” The decision, he said, was the president’s.

After Trump’s victory last year, Tesla’s shares surged at first, reflecting optimism that Musk’s close ties to the president would yield benefits for his businesses. Tesla’s market value hit a record high of $1.5 trillion in December. Since then, it has fallen to about $900 billion.

Early last year, after some two decades of running Tesla, Musk confided to someone close to him, in late night texts, that he was frustrated to still be working nonstop at the company, especially after a Delaware judge had struck down his multibillion-dollar pay package.

Last spring, he told that person that he no longer wanted to be CEO of Tesla, but that he was worried that no one could replace him atop the company and sell the vision that Tesla isn’t just an automaker, but the future of robotics and automation as well.

Musk has complained both in public and private that despite owning roughly 13% of the company, he has been working without pay for the last seven years. The Tesla board recently formed a special compensation committee to address CEO compensation.

Musk has enormous demands on his time. Tesla is only one of five businesses he oversees. At Tesla alone, more than 20 executives report directly to him, according to an internal document. Since the election, he has spent most of his time in Washington, with weekends at Trump’s Mar-a-Lago resort in Florida. When he met with Tesla employees and board members, he often did so remotely.

Some Tesla employees said that the first time they had heard from Musk in months was at an all-hands meeting in March, streamed to all X users, where he tried to reassure employees and persuade them not to sell their shares.

“If you read the news, it feels like Armageddon,” he told them. “I can’t walk past a TV without seeing a Tesla on fire,” he said, referring to vandalism at Tesla showrooms and charging stations. “There are times when there are rocky moments, a little bit of stormy weather, but I’m here to tell you the future is bright and exciting. What I’m saying is—hang on to your stock.”

Executive focus

Musk spent more than $250 million on Trump’s re-election effort. He took the stage with Trump at rallies and even spent a chunk of time in Pennsylvania after identifying it as a state that Trump couldn’t afford to lose. On election night, he was in the ballroom at Mar-a-Lago.

The next morning, Nov. 6, he flew out of Palm Beach to attend a Tesla board meeting in Austin. Soon, he was back in Mar-a-Lago sitting in on meetings with world leaders and helping to vet candidates for cabinet positions.

Musk was given the job of running the Department of Government Efficiency, which eventually was staffed with government outsiders that included investors and employees from his companies. His status as a “special government employee” enables him to work at the White House for 130 days each year without filing the financial-disclosure forms required for regular employees.

As Musk drew closer to Trump, who has criticized EV mandates and vowed to reinvigorate the oil and gas industries, some employees sought assurances from management that Musk still supported Tesla’s mission to fight climate change and support sustainable-energy infrastructure.

Late last November, Tesla executive Mike Snyder tried to reassure his team that Musk’s political tilt wouldn’t distract him from the business. “It’s obviously been a turbulent and emotional season, I acknowledge that,” he said, according to a recording of the meeting reviewed by The Wall Street Journal. “I’d rather have Elon next to Trump than an enemy of Trump.”

Snyder, whose team works on energy storage and solar power, told his team that Musk continued to answer texts. “People concerned that Elon is not engaged or interested, I can assure you that’s not true,” he said.

By early this year, it was clear to some inside the company that Musk’s political foray was becoming a business liability. Tesla was losing brand appeal in markets such as California and Germany, and drivers had begun putting bumper stickers on their Teslas distancing themselves from Musk’s politics. Tesla also was losing ground in China to homegrown rivals such as BYD.

Eliah Gilfenbaum, a Tesla executive in California, told his team that it was getting more challenging to hire and retain talent, according to one person who was present. He told them Tesla would be better off if Musk resigned. That was unlikely to happen, he told them, and employees needed to reconcile the boss’s politics with the company’s mission. He advised them to try to compartmentalize and just keep going.

After two newspapers reported on Gilfenbaum’s remarks, Gilfenbaum was forced out of Tesla, the person said. Tesla hasn’t commented on the matter.

Growth problem

Tesla executives have said the company is in a transition period. Its popular Model 3 car and Model Y crossover drove a first wave of growth. Now it is pivoting to artificial intelligence and robotics, heralded by new vehicles like its Cybercab, a gold two-seater sedan with no steering wheel or pedals, and by Optimus, a humanoid robot central to Musk’s vision for the company. Musk has posited that robotics could transform Tesla into a $30 trillion company, many times its current valuation.

Meanwhile, though, its core EV business is faltering, and its newest vehicle, the Cybertruck, hasn’t provided much of a boost. Musk pitched the Cybertruck, unveiled in 2019, as a futuristic, bulletproof alternative to old school pickups like Ford’s F150. The first versions to reach customers, in late 2023, were priced around $100,000—2½ times the price Musk first announced.

The truck has faced eight recalls, including on safety hardware such as the accelerator pedal and windshield wipers. In its first full year of sales, Tesla sold just 39,000 Cybertrucks in the U.S., according to Cox Automotive estimates—a fraction of the 250,000 in annual sales Musk said was the goal.

While many investors held out hope that Tesla would release a new, low-cost model to invigorate sales in 2025, the company instead has focused on refreshing its existing lineup and lowering prices by changing out expensive parts like the material used on its seats.

In March, it unveiled a refresh of the Model Y, its bestselling car. In April, Tesla released a less expensive version of the Cybertruck, priced at $69,990.

Musk and his lieutenants have redoubled their efforts to convince investors that Tesla’s long-planned autonomous vehicles are just around the corner. Tesla plans to open up its ride-hailing app to the public by the end of June, enabling customers in Austin, Texas, to take unsupervised robotaxi rides in Model Ys. That would put the company in competition with existing robotaxi services like Alphabet’s Waymo and Amazon’s Zoox.

In February, Tesla’s finance chief Vaibhav Taneja warned some investors that Tesla would have a “rough quarter.”

In recent meetings with investors, board members told them that despite Musk’s government work, he was involved in Tesla meetings remotely. One board member told people that sometimes Musk wasn’t as well prepared and that he needed to be briefed more about what is happening with Tesla. The board members continued to say they believed Musk’s proximity to Trump and the White House would benefit the company over the long term.

Last week’s dismal earnings report showed quarterly revenue had declined 9%, including a 20% drop in automotive revenue after sales fell in important markets such as California, China and Germany.

Musk told investors the blowback against Tesla stemmed from his work with DOGE. “The real reason for the protests, the actual reason, is that is those receiving the waste and fraud wish to continue receiving it,” he said. “That is the real thing that’s going on here, obviously.”

After announcing that he would spend less time in Washington and more time at Tesla, Musk defended the company’s performance and expressed optimism about its future. “We’re not on the ragged edge of death,” he said, “not even close.”

U.S. Army Plans Massive Increase in Its Use of Drones

The shift to more small unmanned aircraft is based on lessons from Ukraine battlefield

Key Points

What's This?

The U.S. Army plans to equip each combat division with around 1,000 drones, drawing from lessons in the Ukraine war.

The Army intends to shed outmoded equipment, and is halting procurement of Humvees.

The overhaul would cost $36 billion over five years, funded by cutting outdated systems, and requires congressional support.

HOHENFELS, Germany—The U.S. Army is embarking on its largest overhaul since the end of the Cold War, with plans to equip each of its combat divisions with around 1,000 drones and to shed outmoded weapons and other equipment.

The plan, the product of more than a year of experimentation at this huge training range in Bavaria and other U.S. bases, draws heavily on lessons from the war in Ukraine, where small unmanned aircraft used in large numbers have transformed the battlefield.

The Army’s 10 active-duty divisions would shift heavily into unmanned aircraft if the plan is carried out, using them for surveillance, to move supplies and to carry out attacks.

To glean the lessons from Ukraine’s war against Russia, U.S. officers have debriefed its military personnel and consulted contractors who have worked with Kyiv’s military about their innovative use of drones.

“We’ve got to learn how to use drones, how to fight with them, how to scale them, produce them, and employ them in our fights so we can see beyond line of sight,” said Col. Donald Neal, the commander of the U.S. 2nd Cavalry Regiment. “We’ve always had drones since I’ve been in the Army, but it has been very few.”

The effort to integrate drones was on full display in February when a brigade from the 10th Mountain Division battled against a mock opponent here. During the Cold War, the huge Hohenfels training range was used to prepare for armored warfare against a potential Soviet attack on Western Europe.

But in an updated scenario reflecting new combat tactics used in Ukraine, small drones buzzed in the gray winter skies controlled by soldiers and defense contractors in the muddy fields below.

The bitter cold caused ice to form on some of the aircraft’s rotor blades and sapped the batteries, a glitch that hadn’t arisen in earlier exercises in Hawaii and Louisiana. Soldiers rushed to recharge them as they sought to keep the unmanned aircraft aloft.

Ukrainian and Russian troops have clashed with artillery, armored vehicles, manned fighters and other conventional systems. But it is drones that have transformed the conflict because they are cheap, can attack in swarms to overwhelm defenses, and can send live video feeds to the rear that can make it difficult to hide on the battlefield, analysts said.

“Land warfare has transitioned to drone warfare. If you can be seen, you can be killed,” said Jack Keane, the retired general who served as vice chief of staff of the Army and observed the exercise here. “A soldier carrying a rocket-propelled grenade, a tank, command and control facilities, artillery position can all be taken out by drones very rapidly.”

Drones are just one capability the Army plans to field as the Army seeks to buttress its ability to deter Russia and China after decades of fighting insurgencies in the Middle East and Central Asia.

The service is also developing ways to better link soldiers on the battlefield, drawing on cellphones, tablets and internet technology, and is acquiring a new infantry squad vehicle. The Army plans to invest about $3 billion to develop better systems for shooting down enemy drones and is moving to build up its electronic warfare capabilities.

Altogether the overhaul would cost $36 billion over the next five years, officials said, which the Army would come up with by cutting some outmoded weapons and retiring other systems—steps that will require congressional support.

The “Army Transformation Initiative,” as the service’s blueprint is known, comes as Elon Musk’s Department of Government Efficiency has been seeking to slash spending and personnel across the government.

Gen. Randy George, the Army chief of staff, and Daniel Driscoll, the secretary of the Army, met with Vice President JD Vance recently to explain that the service had a plan to upgrade its capabilities while making offsetting cuts, a Pentagon official said. Defense Secretary Pete Hegseth endorsed the plan in a directive signed this week.

“We aren’t going to ask for more money,” George said in an interview. “What we want to do is spend the money that we have better.”

The Army is halting procurement of Humvees, its main utility vehicle for decades, and will no longer purchase its Joint Light Tactical Vehicle. It is also stopping procurement of the M10 light tank, which has proven heavier and less useful than planned when the program began a decade ago. It is also planning to retire some older Apache attack helicopters. A reduction in civilian personnel will also contribute to the savings.

Three brigades—the 3,000 to 5,000 soldier formations that make up divisions—have already been outfitted with some of the new unmanned systems, and the goal is to transform the rest of the active-duty force within two years, Driscoll said in an interview. A division typically has three brigades.

Army divisions that haven’t begun to incorporate the new technology typically have about a dozen long-range surveillance drones, which were first deployed more than a decade ago.

The Marines have done away with their tanks as part of a separate overhaul that calls for small missile-toting combat teams to hop from island to island in the Western Pacific to attack the Chinese fleet in a conflict.

The Army plan, which is intended to boost the service’s capabilities in Asia as well as Europe, still envisions acquiring new tanks, long-range missiles, tilt-rotor aircraft and other conventional systems.

The American industrial base will have to increase to produce the latest off-the-shelf technology that the Army wants. Last year, Ukraine built more than two million drones, often with Chinese components, U.S. officials say. But the U.S. military isn’t allowed to use parts from China.