Prada Sales Climb 29% on Europe’s Higher Luxury DemandAndrew Roberts and Vinicy Chan
Prada SpA, the Italian maker of $2,200 cobalt blue totes, reported a 29 percent increase in full-year sales, led by demand in Europe and Asia.
Revenue climbed to 3.3 billion euros ($4.4 billion) in the 12 months through January, the Milan-based company said yesterday in a statement. The average of 28 analysts’ estimates compiled by Bloomberg was 3.31 billion euros. Excluding currency swings, sales advanced 23 percent.
Fourth-quarter sales rose 14 percent, excluding currency moves, even as the company limited markdowns, Prada said. That compares with a 12 percent gain at Gucci owner PPR SA and 19 percent at Hermes International SCA in the last three months of 2012. Prada said in December it was confident of positive full-year results as shoppers spent more on higher-priced goods and Asian tourists helped buoy demand in Europe.
“The strength of our brands, our ability to interpret and anticipate market trends and our global retail network continue to form the basis for our long-term growth strategy,” Prada Chief Executive Officer Patrizio Bertelli said in the statement.
Still, sales growth at stores open at least a year slowed to 14 percent from the 19 percent it reported in August. That met the company’s forecast of a percentage increase in the mid-teens. It didn’t provide data on fourth-quarter comparable, or same-store sales, which strip out the effect of newly opened outlets.
Prada fell as much as 1.9 percent in Hong Kong trading before changing hands at HK$72.40, down by 0.3 percent, as of 11:33 a.m. local time. Trading volume at the time was more than double the five-day average. The stock has lost 2.4 percent this year after more than doubling in 2012.
Comparable sales probably slowed to the “mid- to high-single digit rate” in the fourth quarter Candy Huang, a Hong Kong-based analyst at Barclays Plc wrote in a research note today. She has an overweight rating on the stock.
It would be the first time Prada would have had same-store sales growth of less than 10 percent since listing in 2011, Huang said. “Investors may question its growth potential going into 2013.”
Full-year sales climbed 19 percent in Italy, 33 percent in the rest of Europe and 23 percent in the Asia-Pacific region, excluding currency swings, Prada said. Sales gained 15 percent in the Americas and 8 percent in Japan on the same basis.
Growth was driven mainly by the Prada and Miu Miu brands, which expanded 33 percent and 16 percent respectively, the company said.
Sales in Prada’s own stores climbed 29 percent, while wholesale revenue grew 6 percent, excluding currency swings, even as the number of third-party outlets fell, the company said. Retail sales now account for 82 percent of total revenue, it said. Prada operated 461 stores directly at the end of January.
Prada said it tentatively plans to report full-year results on April 5.