Prada SpA officially reported its results for the third quarter of the current fiscal year, as the decline in its profit over the period was larger than initially expected.
According to the companys statement, Pradas net profit over the third three months through October sharply declined from €132.6 million posted in the same period a year earlier to €74.5 million ($92 million). In comparison, analysts have projected a third-quarter profit of €108.6 million. Prada also revealed that its sales during the same period fell 5.6% to reach €801 million.
The fashion house posted an assessment of its near-term prospects in its statement, cited by the Financial Times: “On top of the ongoing difficult international economic environment, the luxury goods market is undergoing a certain readjustment, the extent and nature of which is not yet entirely clear. We are confident that the market has a positive medium-term growth outlook, but also aware of the increased level of competition.”
The Italian company, which is listed on the Hong-Kong exchange explained that it has been hurt by the protests in the region, as the latter led to a drop in consumption. Prada also said it expects its profit margins to remain under pressure during the second half of the financial year. The company expects a little change in its annual sales. About 10% of the fashion houses total sales are currently generated in Hong Kong.
Prada also stated its concerns related to the global economic weakness and geopolitical turbulence and their influence on its activities.
As reported by Reuters, Karim Salamatian, a research analyst at Credit Suisse, wrote in a note at the end of November 2014: “We expect at least three more quarters of weak top-line trends, declining margins and negative EPS (earnings per share) growth for Prada, so we recommend investors use recent share price strength as a selling opportunity.”
Prada SpA was down 1.56% to close at HK$47.25 per share today in Hong Kong, marking a one-year decrease of 35.19%. The company is valued at HK$122.82 billion.
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