Prada’s 2017 results show ‘encouraging trends’ in leather goods

Published:  13 March, 2018

At constant currency, total revenues for the luxury Italian brand dropped -3.6% to €2.49 billion in full 2017.

Prada says there were “clear signs of positive impacts showing in second part of the year”, as the Italian Group returned to sales growth (+1% at constant FX). The leather goods segment is said to have progressively recovered volumes as a wider product offer covered all strategic price ranges. EBITDA for the Group totalled €588 million, that is, 19.2% of revenues (20% in 2016), while EBIT stood at €360 million in the period, representing 11.8% of revenues (12.8% in 2016). Net Income amounted to €249m; 8.1% of revenues (8.2% in 2016).

“The Group’s investment in the store portfolio, in boosting global brand visibility and in the enriched product offer, is enhanced by a fast-growing digital presence. We have successfully improved our leather goods offer with increased newness at all price points, supporting full price sales”, said Patrizio Bertelli, CEO, Prada, adding that the brand has returned to growth across its key geographies. Footwear saw a contraction, although less so in the second part of the year, thanks to the success of new sneaker collections, according to the Group.

In the Asia Pacific, the Group recorded a strong performance in Greater China, +8% sales growth at constant FX. In the U.S., sales were down -4% at constant exchange rates compared to the previous year, but the market is reported to have registered a clear recovery in the latter part of the year, confirmed also into the first months of 2018. Europe saw a significant improvement with revenues broadly in line with 2016, and Japan (-11% at constant FX in 2017) was weak in the first part of the year but showed an improvement in the final months highlighting stronger local demand and tourist flows. As for the Middle East, it recorded a better second part of the year; overall performance for the year was down -9% at constant FX.

Shares in Prada jumped +14% on March 12 as the Group announced a return in sales growth in China and continued growth in 2018.

comments powered by Disqus