Prada Confident Amid Rising Economic Risks as Net Doubles
The stock jumped 7.9 percent to HK$49.05 at the close of Hong Kong trading, the biggest gain since May 22. The city’s benchmark Hang Seng Index declined 0.94 percent.
Net income at the maker of $2,950 perforated patent-leather handbags rose to 121.7 million euros ($152 million) in the three months ended April 30, from 57.7 million euros a year earlier, the Milan-based company said yesterday. Revenue climbed 48 percent to 686.7 million euros.
Europe’s sovereign-debt crisis and slowing economic growth in China have so far failed to reduce demand for high-end goods. Prada joins Paris-based LVMH Moet Hennessy Louis Vuitton SA (MC) in posting higher revenue, with the world’s largest maker of luxury products saying in April that sales growth was accelerating.
“Prada delivered a set of goods results despite uncertain macro conditions, demonstrating brand strength and the resilience of handbags,” Candy Huang, an analyst at Barclays Plc in Hong Kong, wrote in a note to clients. Barclays raised its 12-month price estimate to HK$65 from HK$60 and maintained an “overweight” rating after the earnings announcement.
Prada’s revenue increased in all regions during the quarter, including 34 percent in the Americas and 54 percent in each of Greater China and Italy. Sales climbed 57 percent in Europe and 47 percent in the Asia-Pacific region. Leather goods was Prada’s best-performing category.
Retail sales climbed 49 percent on a reported basis and 19 percent at stores open at least a year, excluding currency swings.
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