Prada Rises to Record as Profit Beats Estimates
The Milan, Italy-based company yesterday said it’s confident of “positive” full-year results after reporting a 57 percent gain in third-quarter profit. Earnings before interest and tax rose to 217.6 million euros ($284.5 million) in the three months ended Oct. 31, higher than the 184.3 million euro average of six analyst estimates compiled by Bloomberg.
“Another great performance,” Aaron Fischer, an analyst at CLSA Ltd. in Hong Kong, said in a note to clients.
Revenue advanced 33 percent to 791.9 million euros, also beating estimates. Prada expects full-year same-store sales to climb by a mid-teens percentage, Finance Director Donatello Galli said on a conference call. Chief Executive Officer Patrizio Bertelli forecast 15 percent growth in September.
Shoppers are spending more on higher-priced goods, while Asian tourists are helping buoy demand in Europe, Galli said.
“The group remains confident that the strategies and the actions in place will continue to bring positive results even in the present still challenging global economic environment,” the company, which operates the Prada, Miu Miu, Church’s and Car Shoe brands, said in a statement.
Third-quarter revenue growth was led by the Asia-Pacific region, which increased 21 percent excluding currency swings, and by leather goods, which climbed 38 percent on the same basis, Prada said. All other product categories achieved double- digit sales growth, while European same-store sales rose 32 percent as the company continued to attract travelers, it said.
Prada’s results show “solid outperformance” in the sector, said Peter Tang, a Hong Kong-based analyst at Mizuho Securities Asia.
“There continues to be a big shift in buyers from the East traveling to the West to shop. It is going to be the companies that capture this shift that will benefit most in this type of environment,” Tang said in a telephone interview today.
Sales of the Prada brand advanced 29 percent, excluding currency swings, and Miu Miu rose 9.8 percent, Prada said.
Nine-month net income, which surged 50 percent to 408.6 million euros, was curbed by a higher-than-expected tax charge as the Italian tax authority declined a request by Prada not to apply an exemption rule to its Dutch sub-holding company. Prada plans to appeal the decision, Galli said.
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