Prada Half Year Profit Rises, But Misses Projections

Prada Milan—Prada today reported its first half profit rose 7.6% as sales in China helped boost the bottom line. However, the profit was lowered than analysts had projected.

For the six months ended July 31, the parent of Prada and Miu Miu reported a net profit of 308 million euros (about $411 million) compared with a profit of 286.4 million euros a year earlier. Analysts’ average estimate though was for 321.3 million euros.

Earnings before interest, taxes, depreciation and amortization rose 17% to 551.1 million euros, widening as a percentage of sales as Prada adjusted its product mix and increased prices.

Net sales in the first half slowed to a third of the rate they were in the same quarter last year, but were still up 11.6% to 1.73 billion euros.

Prada, which has 491 directly-operated stores, plans to add another 80 this year. Comparable store sales rose 7% and are expected to continue that same growth in the second half.

On a conference call with analysts, Donatello Galli, chief financial officer, blamed the earnings miss on the euro’s strength against the dollar and yen.

“The currency’s appreciation against the yen and the dollar may be possibly not fully considered in some of the forecasts that we have seen coming from the market at the moment,” Galli said.

August figures were “fairly good” despite some slowdown in some parts of Europe and the Middle East as the situation in Syria hurts tourist business, Galli said.

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com

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