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Prada SpA’s sales rose less than expected in the first half of the year on weaker demand for the Italian fashion group’s eponymous brand, a sign the luxury industry is still struggling to shake off a downturn.
Net revenue for the group rose 9 percent at constant currencies, the Hong Kong-listed company said Wednesday, slightly below analyst estimates. Sales at the Prada brand slid 2 percent against a “challenging” and “somewhat unprecedented” backdrop, the company said, while Miu Miu’s growth decelerated in the second quarter.
Like its peers, Prada has grappled with weaker consumer confidence in key markets, exacerbated by fears president Donald Trump’s tariffs would trigger inflation. Its shares have dropped about 22 percent this year, and chairman Patrizio Bertelli said he expects economic turbulence to continue in the short term.
“The 2 percent decline in Prada brand sales underlines the challenges brands are encountering in sustaining demand amid a more price-sensitive and cautious consumer environment,” RSM UK analyst Robyn Duffy said in a statement.
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Still, there have been signs of improvement in the sector. LVMH Moët Hennessy Louis Vuitton SE’s shares bounced back last week as some investors started to call the bottom of the slump. Hermès reported a 9 percent rise in sales on Wednesday.
“I could be tempted to say that we’ve seen the worst, but we need to prove it,” chief executive officer Andrea Guerra said on a call. The group said it aims to deliver above-market growth.
It agreed to buy Versace earlier this year for about €1.25 billion ($1.4 billion), the biggest purchase in Prada’s 112-year history, adding a different look to its portfolio that is expected to help it compete with bigger rivals. The deal is due to complete in the second half, according to the statement.
Guerra has also taken temporary charge of the Prada brand after the division’s CEO, Gianfranco D’Attis, left last month.
Prada said retail sales at Miu Miu, which is particularly popular with younger customers, rose 49 percent in the first half. The pace slowed during the period, though, with a 40 percent rise in the second quarter coming below analyst estimates.
Overall group sales rose the most in the Middle East and the Americas, while growth in Asia Pacific, Japan and Europe was less than analysts expected.
By Katie Linsell, Tommaso Ebhardt
