Prada witnesses marginal decline in annual net revenues

Wednesday, 27 May 2015

REPORT Consolidated net revenues at Prada for the period ended January 31, 2015, totaled 3,551.7 million euros (3,875.9 million dollars), slightly down on 2013. Wholesale channel sales decreased 3.4 percent or below 4.7 percent at constant exchange rates. The decline was owing to its performance

in the European and American markets. Meanwhile, strong sales growth was achieved by the network of franchise stores in Asia Pacific (DFS), which benefited from an increasing flow of Chinese consumers.

Commenting on the performance, Patrizio Bertelli, Chief Executive Officer of Prada, said, “As already highlighted, the financial year 2014 represented a year of transition for the Prada Group on its journey of growth. Operating profit slowed down temporarily after the group preferred to take a medium/long-term view with the continuation of its investment program.”

As of January 31, 2015, the group’s retail network consisted of 594 directly operated stores). Sales in this channel totaled 2,980.9 million euros (3,253 million dollars), broadly in line with 2013 at both current and constant exchange rates, but with significant variation from one geographical area to another. The growth recorded in Japan, the Americas and the Middle East was impacted by a fall in sales in the Far East, where market conditions gradually deteriorated in the second half.

In Europe, sales decreased by 1.1percent compared to prior year due to the reduced flow of tourists and continuing weakness in domestic demand. However, the trend did improve in the final quarter of the year. In the fourth quarter, the American market confirmed the good performance and for the entire fiscal year, it recorded over 7.7 percent increase at current exchange rates and over 7.2 percent at constant exchange rates, owing to strong domestic demand. Asia Pacific recorded a 5.5 percent drop in sales at current exchange rates and below 6.5 percent at constant exchange rates. The sales contraction in this area was mainly due to the weak performance of Hong Kong and Macau in the second half of the year.

The Japanese market continues to grow and performed well again in the fourth quarter. Sales growth for 2014 as a whole was over 7.7 percent at current exchange rates or above 13.3 percent at constant exchange rates). In the Middle East, sales grew by a 9.9 percent at current exchange rates and 8.5 percent at constant exchange rates despite a fall in the number of Russian tourists.

In 2014, the Prada brand, which now accounts for 83 percent of consolidated net revenues, recorded a 1.7 percent decrease in sales at current exchange rates and below 1.5 percent at constant exchange rates. Men’s collections achieved growth in all geographical area. Miu Miu achieved 4 percent revenue growth at current exchange rates and over 4.4 percent at constant exchange rates. Except in Europe, the brand recorded good rates of growth in all markets, including the Far East. Church’s also performed well with over 14.8 percent revenue growth at current exchange rates and 12 percent at constant exchange rates, as did Car Shoe with 12.2 percent growth at current exchange rates and over 11 percent at constant exchange rates.

The Board of Directors have approved a dividend of 0.11 euros (0.12 dollars) per share.

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