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Prada with massive drop in net income

Dec 10, 2014 Italy
Prada with massive drop in net income
The Italy-based group has announced the financial results for the nine month's period, characterized by declines in revenue and net income
Patrizio Bertelli, Chief Executive Officer of Prada Spa, commented: “2014 is proving to be a more challenging year than expected. On top of the ongoing difficult international economic environment, the luxury goods market is undergoing a certain readjustment, the extent of which is not yet entirely clear. We are confident in the medium-term growth prospects of the market, but also aware of its increasing level of complexity”.
 
Prada's consolidated net revenue for the nine months’ period ended in October 31st amounted to 2 552 million euros, broadly in line with 2013's performance (-0.9% at current exchange rates, +0.5% at constant exchange rates).

Wholesale channel sales have decreased by 3.7% (-4.2% at constant exchange rates) to stand at 351.5 million euros and retail sales totaled 2 171.7 million euros (-0.5% at current exchange rates, +1.3% at constant exchange rates). As at October 31st, the retail network included 580 DOS, of which 40 opened during the current financial year.

The Asia Pacific area registered decreases in sales (4.3% at current exchange rates and 2.8% at constant exchange rates) mainly impacted by the Hong Kong market; however the largest market in the area in sales terms, China, has recorded a positive trend. In Europe, revenue has fallen by 1.8% at both current and constant exchange rate, suffering the negative impact of a fall in the volume of tourism and the lack of economic recovery.

The Americas market has grown thanks to domestic demand and has recorded revenue increases of +6% at current exchange rates and +8.8% at constant exchange rates. Also, the Japanese market recorded a positive trend and achieved strong growth in the period under review (+8% at current exchange rates and +15.3% at constant exchange rates). The Middle East also achieved revenue growth in the nine months period (+9.8% at current exchange rates and +11.7% at constant exchange rates).

At current exchange rates, the Prada brand recorded a small 1.5% decrease in sales whereas the brand’s sales at constant exchange rates were broadly in line with 2013 (+0.3%). Miu Miu continued to grow with a +6.1% increase at constant exchange rates (+3.9% at current exchange rates). Except in Europe, the brand continues to record good rates of growth on all markets. Church’s has also performed well with +11.1% sales growth at constant exchange rates (+13.3% at current exchange rates), as has Car Shoe retail network,with +7.5% growth at constant exchange rates (+7.6% at current exchange rates).

Prada's net profit for the period reached 319.3 million euros or 12.5% of consolidated net revenues, a 27.6% decline from the 440.9 million euros registered in similar period last year.

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