LONDON – Prada Group defied the slowdown in luxury, delivering double-digit profit and revenue gains in the first fiscal half against a difficult macro-economic backdrop, and despite ongoing investment into its brands.
In the six months to June 30, the owner of Prada, Miu Miu, Church’s, and Car Shoe posted a 26 percent uptick in net income, year-on-year, to 383 million euros. EBIT, or earnings before interest and taxes, climbed 17 percent to 575 million euros.
Revenues rose 14 percent to 2.55 billion euros at actual exchange rates. At constant exchange rates, revenues were up 17 percent in the six-month period.
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Retail sales climbed 15 percent to 2.26 billion euros at reported rates, and 18 percent at constant exchange. Retail sales at Miu Miu rose 93 percent, outstripping growth at Prada, designed by Miuccia Prada and Raf Simons, which was 6 percent in the six month period.
Although Miu Miu has been around since 1993, the brand has gained significant momentum in recent years, particularly in the Chinese market where the clothing is favored by socialites, and has cross-generational appeal.
The brand, which is designed and named after Miuccia Prada and offers up fresh, youthful, lighthearted collections, regularly tops the quarterly Lyst Index of hottest brands. Earlier this month, however, it was knocked off its number-one perch by Loewe.
Patrizio Bertelli, Prada Group chairman and executive director, called the first-half results “solid” and said they reflected the “disciplined execution” of the group’s strategy.
“We are satisfied with the above-market performance and high-quality, like-for-like growth trajectory that we have achieved in an increasingly uncertain market environment,” he said.
Bertelli added that the group, which is publicly listed in Hong Kong, was undaunted by the future. “The flexibility of our organization gives us confidence in the group’s ability to navigate the months ahead as we continue to invest across our business,” he said.
Andrea Guerra, group chief executive officer, said the company has delivered 14 consecutive quarters “of high-quality, like-for-like growth,” with a positive second quarter building on a solid start to fiscal 2024.
Still, he’s not resting on his laurels.
“In the current macroeconomic and geopolitical context, industry dynamics have become more challenging; this requires us to be agile and sharp on our product range, communication and overall positioning, to continue to drive client engagement and to progress in our journey towards retail excellence,” said Guerra.
“While being vigilant, we remain committed to our strategy and to our ambition to deliver solid, sustainable and above-market growth,” he added.
The group’s growth is in marked contrast to Prada’s peers, including Kering, LVMH Moët Hennessy Louis Vuitton and Burberry, all of which have suffered a slowdown in sales and profit growth in fiscal 2024, due largely to the slowdown in demand in Mainland China.
Prada Group performed well across all regions, including Asia Pacific, where revenue rose 12 percent in the six months.
The group noted that growth moderated in the second quarter against a backdrop of tougher comparisons “and increasing spending outside the area,” a reference to robust trading in Japan.
Almost all luxury groups are seeing sales soar in Japan, where wealthy Chinese tourists have been taking advantage of the weak currency.
Japan was the best–performing region for Prada, with sales climbing 55 percent “supported by healthy local demand and strong tourism flow,” the group said.
Sales in Europe were up 18 percent, supported by domestic and tourist spending. The Americas region grew by 7 percent, with the second quarter registering a “slight sequential improvement,” according to the company.
In the Middle East sales rose 20 percent, “despite persisting geopolitical tensions in the region,” Prada Group said.
