Prada sees slowing sales growth in third quarter
Prada, like other luxury groups, is finding sales growth hard to maintain given rising economic uncertainty
Milan – Prada saw its sales growth decelerate during the third quarter but the Italian luxury group said Tuesday sales for the year were still solidly higher thanks to strong performances in Asia and Europe, its top markets.
Nine-month sales revenue came in at 3.34 billion euros ($3.54 billion), an increase of 12 percent when exchange rate effects are neutralised. However that is a drop from the 17 percent increase it reported in first half sales.
The company did not provide a full set of third quarter figures, but said sales grew by 10 percent year-on-year during the period.
“In the third quarter, Prada remained on a sound growth trajectory, driven by solid full price like-for-like sales,” chief executive Andrea Guerra said in a statement.
The slowdown varied considerably across regions.
Retail sales in the Asia Pacific region, Prada’s largest, were up by 21 percent in the first nine months of the year, but the gain dropped to 13 percent for just the third quarter.
For Europe, the drop was from 17 to 6 percent sales growth at constant exchange rates.
North America went from -1 to -2 percent.
Japan slid from 49 to 42 percent sales growth.
Prada’s youth-oriented label, Miu Miu, maintained its growth rate of nearly 50 percent in the third quarter, but the Prada label saw growth drop from 13 percent over the nine month period to 5 percent in the third quarter.
The ready to wear segment still showed strong growth of 25 percent in the third quarter, but leather goods stagnated with 1 percent growth.
Luxury groups have recently seen growth slow, in part due to China’s weak economy.
Luxury sector leader LVMH saw its overall sales growth stall in the third quarter.
Hermes managed a 7.3 percent rise in overall sales growth last quarter, but they fell in Asia.