ITALY: Prada books 75% jump in nine-month profit
By Petah Marian | 30 November 2011
- Nine-month net profit increased 75% to EUR273.2m
- Revenue up 25% to EUR1.73bn
- Retail sales grew 36%
Prada has reported a 75% jump in net profit in the first nine-months of the year as margins improved on the back of a shift towards retail, a better markdown strategy and improved scale and manufacturing efficiencies.
The Italian luxury brand yesterday (29 November) booked a net profit of EUR273.2m in the period to 31 October. Revenue rose 25% to EUR1.73bn, and was up 28% at constant exchange rates. EBITDA increased 47% to EUR486.5m.
Prada said it continued to see an “excellent” performance in its retail channel, with sales up 36% to EUR1.3bn, and up 23% on a like-for-like basis. The company said that while all of its brands contributed to the growth, Prada and Miu Miu registered revenue rises in excess of 25%.
The company said the Asia Pacific region was the “principle market”, with revenue reaching EUR579.7m, up 39% on the same period last year.
“Whilst we will continue to closely monitor markets' behaviour, we remain confident in the strength of our brands, as well as in the luxury market's potential," said CEO Patrizio Bertelli.
"We will continue to pursue our objective of long-term growth through our strategy focused on the geographic expansion of directly managed shops and the high quality of our products.”
Jon Copestake, retail industry analyst at the Economist Intelligence Unit (EIU) confirmed that amid the gloom of their home markets, “European luxury brands are pinning their hopes for growth squarely on Chinese shoulders”.
While he said that “so far they have not been disappointed”, he questioned whether this will continue into 2012.
“Prada joins a long list of luxury firms such as PPR, Burberry and LVMH in seeing Chinese growth more than compensating for weak eurozone sentiment. The question is whether this will continue into 2012,” he said. “If fears of a slowdown in growth are realised, luxury firms will be exposed.”
Sectors: Apparel, Finance, Retail
Companies: Prada, PPR, Burberry, LVMH
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