Prada Falls Most in 17 Months as Revenue Growth Slows in Asia
Prada dropped as much as 5.4 percent, headed for the biggest decline since Sept. 11 in 2012, in Hong Kong trading. The stock fell 4.8 percent to HK$60.60 as of the midday break, compared with a 0.3 percent decline in the benchmark Hang Seng Index.
Sales climbed 9 percent to 3.59 billion euros ($4.9 billion) in the 12 months through January, missing the 3.64 billion-euro average estimate of 29 analysts compiled by Bloomberg. Luxury companies including Cie. Financiere Richemont SA, Tod’s SpA and Mulberry Group Plc have reported weaker-than-estimated sales as demand softens and the euro strengthens against currencies including the Japanese yen.
The results imply sales growth of 5 percent in the fourth quarter, “the weakest quarter of the year, mainly due to further adverse forex impact and the sustained weakness of the wholesale arm,” Phoebe Wong, an analyst at Bocom International, wrote in a report today. Wong expects net income for the fiscal year to fall 1 percent.
Excluding currency shifts, sales rose 13 percent last year, Prada said in its statement yesterday. Revenue on that basis rose 14 percent in the first nine months, the company said in December.
Revenue climbed 11 percent in America and rose 5 percent in Europe amid the “difficult economic environment” and a stronger euro, the company said.
China’s anti-graft campaign led to more cautious spending by Chinese tourists in Europe and expanding outbound travelers to destinations such as the U.S. were one of the attributing factors for the softening demand in Europe, Wong wrote.
Prada said it tentatively plans to report full-year results on April 2.
To contact the editor responsible for this story: Stephanie Wong at email@example.com