Yoox Net-a-Porter Shares Plunge as Growth Slows in U.S., China

  • Revenue growth this year seen at lower end of forecast range
  • Third-quarter sales rise 18%, missing average analyst estimate

Yoox Net-a-Porter SpA’s shares plunged the most in more than 16 months after the online luxury retailer reported slowing sales growth in the U.S. and China that will lead to sales at the lower end of the company’s forecast range this year.

Yoox Net-a-Porter slid 7.7 percent to 30.01 euros at 10:25 a.m. in Milan after dropping as much as 13 percent, the biggest intraday loss since June 2016. Organic net revenue growth this year will be at the lower end of the 17 percent to 20 percent forecast range “in light of the results achieved to date and the foreseeable performance of November and December,” the Milan-based company said in a statement Wednesday after European markets closed.

Business slowed markedly in the U.S. and China, analyst Marco Baccaglio of Kepler Cheuvreux said in a report. He cut his rating on the stock to hold from buy, saying that after the shares surged this year, they already reflect most of the growth that the company has forecast through 2020.

“While we are confident about the 2020 plan, this is now partly factored in,” Baccaglio wrote. “We feel that upside is now mostly tied to potential new partnerships, which YNAP did not rule out.”

Third-quarter net revenue rose 18 percent on an organic basis to 481.8 million euros ($558.6 million). Analysts had predicted 485 million euros, according to forecasts compiled by Bloomberg Data.

“This solid organic growth was nicely balanced across our in-season, off-season and online flagship stores business lines,” Chief Executive Officer Federico Marchetti said in a statement.

North American sales rose 10 percent at constant exchange rates in the quarter, a slowdown from 18 percent growth in the year-ago quarter. Similarly, in Asia Pacific, revenue climbed 14 percent, down from 37 percent a year earlier.

Yoox Net-a-Porter expects higher adjusted earnings before interest, taxes, depreciation and amortization for 2017 and a net revenue margin “broadly” in line with the previous year.

The global market for luxury e-commerce rose 13 percent in 2016, according to Bain & Co., which forecasts it will remain the fastest-growing channel for high-end products through 2020.

Before Thursday, shares in Yoox Net-a-Porter had risen 51 percent from their mid-March low amid rebounding demand for luxury products.

The company, which sells products including $700 Balenciaga sneakers and $25,000 Chopard watches in addition to operating e-commerce platforms on behalf of high-end brands, this week launched a private-label brand for its Mr. Porter division. Prices for the menswear brand, called Mr. P, range from $75 to $1,120.

    Before it's here, it's on the Bloomberg Terminal.