The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
HONG KONG, China — Prada shares fell more than 8 percent on Thursday morning after the Italian luxury fashion group reported full-year earnings that missed analyst estimates and forecast sales to rise by single-digit percentages this year.
Prada reported a profit of 627.8 million euros for the year ended January 31, up just 0.3 percent from the year before and short of the 673.6 million euros expected by analysts. Prada's fourth-quarter profit dropped 13 percent year-on-year amid a broader slowdown in the luxury sector as once voracious demand in China cooled.
Thursday's share drop is the biggest percentage drop in the shares since October 3, 2011.
The shares were down 8.5 percent at HK$56.50 at 0208 GMT.
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By Donny Kwok and Clare Baldwin; Editor Gopakumar Warrier
Copyright (2014) Thomson Reuters. Click for restrictions
With consumers tightening their belts in China, the battle between global fast fashion brands and local high street giants has intensified.
Investors are bracing for a steep slowdown in luxury sales when luxury companies report their first quarter results, reflecting lacklustre Chinese demand.
The French beauty giant’s two latest deals are part of a wider M&A push by global players to capture a larger slice of the China market, targeting buzzy high-end brands that offer products with distinctive Chinese elements.
Post-Covid spend by US tourists in Europe has surged past 2019 levels. Chinese travellers, by contrast, have largely favoured domestic and regional destinations like Hong Kong, Singapore and Japan.