Jul 29, 2021
Prada sees sales growth in second half after strong recovery in H1
Jul 29, 2021
Italian fashion group Prada sees sales rising further in the second half of the year after revenues beat market expectations in the first six months, extending a recovery from the worst of the COVID-19 crisis.
The Milan-based, Hong Kong-listed luxury group said on Thursday total revenues jumped by 66% at constant exchange rates to total 1.5 billion euros ($1.78 billion), a touch under their first half 2019 pre-pandemic levels, but above 1.43 billion euros sales expected by analysts 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, adding the group will hold a capital markets day in the autumn.
The global health emergency last year interrupted two years of sales recovery at Prada, the result of a revamp plan focused on boosting e-commerce and sticking to full-price sales.
Like the rest of the luxury sector, the group started to see the first signs of a rebound last summer after the key Chinese market eased anti-contagion restrictions.
The industry is now steaming ahead as lockdowns have been relaxed around the world, with several key players well above their 2019 revenue levels.
Sales from Prada's store network totalled 1.281 billion euros, 8% above their level in the first six months in 2019, even through a sixth of shops were still closed during that period. There was a "strong acceleration" in the second quarter, the company said.
Both Asia and the Americas exceeded pre-pandemic levels, while revenues in Europe - where shops remained closed for longer - were still 29% lower than two years ago.
"Once stores re-opened, (sales) partially recovered", Prada said, adding robust demand from local customers partially offset the lack of tourists in the region.
E-commerce grew by 100% or more compared with a year earlier. Online sales now accounts for 7% of retail revenues.
A policy of full-price sales together with strict cost controls led to earnings before interest and taxes (EBIT) turning positive at 166 million euros, compared with a coronavirus-driven loss of 196 million euros last year.
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.
© Thomson Reuters 2021 All rights reserved.