Prada Half-Year Income Leaps 74% As China Sales Lift

Milan–Prada SpA reported Sunday that its fiscal first half income leaped 74% increase as demand on its leathergoods and other products, especially in greater China, boosted sales.

For the six months ended July 31, Prada posted net income of 179.53 million euros (about $244.92 million), up from 103.04 million euros in the year-ago period. Earnings per share for the half year increased to 0.071 euros from 0.041 euros in the previous-year period.

Net income from the company’s continuing operations for the half-year period increased to 181.20 million euros from 103.92 million euros in the same period last year.

Net revenues rose 21.1% to 1.13 billion euros from 936.49 million euros in the year-ago period.Of the total net revenues, retail net sales surged 33.4% to 835.37 million euros, reflecting the full contribution of the 27 store openings from the second half of 2010, contribution of the 26 new store openings in the first half of this fiscal year, and organic growth of 22%.

Asia Pacific Sales Rise 35%

Prada, which launched its IPO on the Hong Kong stock exchange in June, said the fund raised through its public offering was 206.6 million euros. One of the reasons the Italian-based company floating its offering in Hong Kong was due to the strategic importance of Greater China in its future.

And China proved to be the biggest contributor to a net sales increase of 35.4% to 368 million euros in the Asia Pacific region.  The company said the Asia Pacific net sales increase consisted of 31% organic growth and the addition of nine new stores since July 2010.

Net sales in Europe rose 22.4% to 250.66 million euros with net sales in Italy increasing 19.1% to 213.44 million euros.

By brand, net sales for its Prada brand rose 21.3% to 878.38 million euros, accounting for about 78.6% of total sales. Net sales for Miu Miu grew 24.9% to 198.87 million euros and net sales for Church’s brand increased 2.4% to 27 million euros. The company noted that sales of leathergoods grew by 35.3%.

Noting that the half year income beat its own forecast for 150.7 million, Carlo Mazzi, deputy chairman, said he is “quite confidant Prada will deliver good results in the future.” He added that the company had seen no downturn in order or pull back in spending from its consumers as a result of the economic uncertainty hitting Europe and the United States.

Prada’s closely watched net debt fell to 135.2 million euros, down from more than 408 million euros reported at the end of January as a result of a capital increase of more than 200 million euros. Mazzi said that with its strong free cash-flow generation, the company plans to continue reducing its debt.

 

 

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