Sunday, June 14, 2015

Prada profit drops 44% on back side of China sales slump

Prada suffered first-quarter profit that trailed analysts' estimates as the maker of $695 clogs and $860 wallets not been as successful to reverse slumping sales through China.

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Net income in the three months signifies of April fell to €58. sete million from €105. 3 several, the Milan- based group cited Friday in a statement, well just below analyst expectations for €85. only million.

Prada, which has scaled back again its retail expansion plan according to tough trading conditions, said may further cut its goal towards net shop openings this year with regard to 24-26 from 30 in a bet to shield margins. It is also outstanding more bags priced between €1, 000 and €1, 200 mainly because attempts to reignite demand in the midst of a clampdown on corruption and additionally extravagance in China.

The as well as of the euro helped the prime source of miu miu iPhone case handbags gain a 6. 5 per cent rise in first-quarter sales to €828 million. Fortunately revenues were down 5. give consideration to per cent when stripping out the supercharge from currencies. In particular, they decreased 17 percent in the Asia-Pacific space, the group's largest market, mainly because weak Chinese consumer spending very economic growth slows.

"Performance in this field has been affected mainly by the public conditions in Greater China, specifically in Hong Kong and Macau, where the move down in Chinese tourist numbers, until now seen in the second half of 2014, teaches no signs of abating, " Prada said in a statement.

The results undoubtedly are a "poor set of numbers, " Luca Solca, an analyst at Exane BNP Paribas, said. While the as well as of the euro boosted revenue, this masturbation sleeve also leading to "a major escalation in retail-related costs".

Chief financial representative Donatello Galli told an expert call he expected a recovery in China in the second half the year. But if current trends remained, previous "indications of flat margins [in the full-year] could be a minute challenging".

Weakness in the region that massive has been the luxury sector's growth cycle is a headache for other extensive brands too. Sales at Gucci's own shops in Asia-Pacific decreased 10 per cent in the first detail, the Italian brand's owner Kering said in April. – Reuters news agency / Bloomberg

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