Following expectation beating revenues for the first six months of the current year, Italian fashion group Prada forecast continued growth in sales for the he second half of the year as the luxury brand continued to recover from the hit to its business because of the Covid-19 pandemic.
There was a 66 per cent jump in the revenues of the company at constant exchange rates to total 1.5 billion euros ($1.78 billion), said the Milan based, Hong Kong listed luxury group on Thursday. That number was just shy of the revenues reported by the company for its first half of 2019 before the pandemic hit. However, the number was also well above the market expectations of 1.43 billion euros sales according to a consensus by Refinitiv.
“The sales momentum will stay strong in the second half of the year”, Chief Executive Officer Patrizio Bertelli said and added that a capital markets day in the autumn will be held by the company.
Two years of sales recovery at Prada was interrupted in 2020 by the global health emergency as the company had revamped its business strategy to focus on boosting e-commerce and sticking to full-price sales.
In line with the experience of the rest of the luxury industry, the group had started to witness the initial signs of a recovery last summer after pandemic related restrictions were eased in China – the group’s critical market.
There is significant growth in the industry at present as countries around the world have relaxed lockdowns and a number of luxury brands reporting revenue performance well above the 2019 pre-pandemic levels.
The company reported an 8 per cent surge in sales from Prada’s store network for the first six months of the current year, at 1.281 billion euros, compared to the same period of 2019 even though about one sixth of its stores remained closed during the period.
The group said that there was a “strong acceleration” in the second quarter.
Business of the company in both Asia and the Americas surpassed pre-pandemic levels while its sale revenues in the European market were still lower by 29 per cent compared to the same period two years ago because many stores of the company remained closed for longer periods.
“Once stores re-opened, (sales) partially recovered”, Prada said, adding robust demand from local customers partially offset the lack of tourists in the region.
The company also reported at least 100 per cent growth in e-commerce revenues compared to the same period a year ago. About 7 per cent of its total retail revenue is now accounted for by online channels.
The company reported positive earnings before interest and taxes (EBIT) at 166 million euros, because of a policy of full-price sales along with strict cost controls, compared to a loss of 196 million euros for the same period a year ago because of the Covid-19 pandemic, the company said.
This compared with an analysts consensus of 143 million euros and with and with a 150-million euro operating profit in the first half of 2019
(Adapted from Investing.com)