Prada to Pursue Retail Expansion After Profit Misses Estimates

Prada F/W 2014 Campaign | Source: Prada

HONG KONG, China — Prada SpA, an Italian maker of $720-euro laced Derby shoes, said it will continue to open stores and promote its brands while monitoring economic conditions after reporting profit that missed estimates.

First-half net income advanced 7.6 percent to 308.2 million euros ($412 million) in the six months through July, the Milan- based company said today in a statement. Analysts predicted 321.4 million euros, based on the average of five estimates compiled by Bloomberg.

Prada’s first-half revenue growth slowed to a third of the rate in the same period last year as demand for luxury goods cooled in China, the world’s second-largest economy. The company, which is seeking to grow without making acquisitions, said in June it is confident of high single-digit percentage growth in same-store sales this year.

“The challenging environment determined by a still weak general economic situation and the added international tensions of the recent weeks, will – nevertheless – require a close attention to efficiency of operations and execution of strategy in order to be able to respond to possible sudden change of conditions,” Prada said.

Six-month sales gained 12 percent to 1.73 billion euros, Prada reported last month. Earnings before interest, taxes, depreciation and amortization advanced 17 percent to 551.1 million euros, the company said today.

By Andrew Roberts; Editors: Celeste Perri, Thomas Mulier, Robert Valpuesta