Prada said on June 5 its performance in the three months to April 30 had been hit by unfavourable exchange rates, declining wholesale deliveries and a tough comparison with the previous year.

Sales fell 0.6% to €777.7 million ($1.06 billion), below analysts’ forecasts of around €813 million according to Thomson Reuters data. At constant exchange rates, sales rose 3.8%.

The group, known globally for its high-end fashion brand founded as a leather goods company by designer and co-chief executive Miuccia Prada’s family in 1913.

In April, Prada said it expected sales to grow 9% this year, with an operating profit margin in line with 2013 and like-for-like sales growth of at least 3%. Chief Executive Patrizio Bertelli said then that the group would focus on Prada-branded menswear, the Prada retail network, growth of the Miu Miu and Church’s brands, boosting like-for-like sales and investing in communication.

The Prada brand, which mainly sells leather goods and makes over 80% of sales for the group, limped up 0.3% in the quarter.

Sales growth slowed across the board for luxury groups in 2013 as once red-hot demand in China cooled, but Prada’s French peer Louis Vuitton, owned by LVMH enjoyed comparable sales growth of 9% in the first quarter of this year.

Louis Vuitton, along with Prada’s compatriot Gucci, have been offering more expensive leather handbags and fewer logo-embossed canvas bags in a bid to move upmarket. However, Prada’s sales from high-margin leather goods excluding shoes slumped 4% in the first quarter.

Prada’s sales fell 2.6% in Asia Pacific, where it makes 40% of its income, and 4% in Europe, its second biggest market with a 20% share.

LVMH, on the other hand, said in April that Louis Vuitton’s sales to Chinese and European customers had improved in the first quarter.

Prada shares closed 1% lower on the day.

Source: Reuters