MILAN, March 15 (Class Editori) — Mainly supported by the Asian market, which accounts for more than a third of sales, the Prada Group confirms its medium-term growth targets after a "very promising" start to the year and 2021 profits above expectations. During a conference call with analysts, the top management of the Milan-based group, led by Patrizio Bertelli and Miuccia Prada, stated that the months of January and February boasted a very strong performance in the wake of a brilliantly closed fiscal year, with total sales amounting to 3.36 billion euros, up by 41% year-on-year and by 8% compared to 2019.
The last fiscal year was supported by full-price sales, local consumption and retail revenues of 2.93 billion euros, a double-digit growth on both 2020 (+40%) and 2019 (+15%). A decisive contribution was the performance in the second half of the year, which ended with a strong acceleration of 16% on 2019, with +24% in the fourth quarter alone.
Geographically, the Asia Pacific region was the fastest and recovered the most from 2019 values, especially in China, which is on its way to becoming the most important market. Across the region, sales grew by 29% on 2020 and 30% on 2019, with sales amounting to 1.19 billion euros.
The "outstanding" demand in the main markets recorded +56% on 2019 in China, +90% in Korea and +61% in Taiwan. Japan, on the other hand, has not yet recovered, influenced by the prolonged restrictive measures due to the pandemic, where sales stood at 297 million euros, +16% on 2020 and -17% on 2019.
Sales in Europe totalled 749 million euros, a 35% recovery on 2020 but still 11% below 2019’s figure. Revenue generated in America, amounting to 572 million euros, showed strong performance throughout the year, with a +103% on 2020 and +69% on 2019.
The Middle East achieved 121 million euros in revenues, increasing by 62% on 2020 and by 43% on 2019. On the other hand, the management did not comment on the Eastern European market. "We are monitoring the situation in Russia, all our activities stopped and products were withdrawn from stores," the CFO, Alessandra Cozzani, stated. "The impact of the Russian market on our turnover is not significant, accounting for 1.5-2%, so we do not expect a dramatic impact".
Online sales recorded an important growth as well, quintupling the volumes in two years and reporting a +61% on 2020. The impact of e-commerce on total retail revenues is now 7%. Wholesale, on the other hand, has recovered 41% over last year but it is still at -29% compared to 2019, in line with the Group's selective policy and channel rationalization strategy.
"The first months of 2022 were very promising for the Prada Group. The long-term strategy continues, based on the distinctive identity of our brands Prada, Miu Miu and Church's, product quality, industrial know-how, focus on direct distribution and sustainability," the CEO, Patrizio Bertelli, stated. "We took decisive action to address the needs of a constantly evolving luxury market, although it is still difficult to assess the war in Ukraine’s impact on the global economy".
Gross margin improved dramatically, reaching 75.7% for the year and 76.8% in the last six months, while operating profit rose to 489 million euros, accounting for 14.5% of annual revenues and 17.4% in the last six months. "At the beginning of 2021, COVID-19's impact was still strong, then the market recovered in the second half of the year. We confirm a gross margin of 78% for 2022," the CFO, Alessandra Cozzani, stated.
Net income amounted to 294 million euros, equal to 8.8% of revenues, with operating cash flow at 751 million euros and capex at 216 million euros. Finally, Lorenzo Bertelli, Head of Corporate Social Responsibility of the Group, recalled the progress achieved in the field of ESG and, when questioned again by analysts about a possible interest in YNAP, replied: "I cannot comment right now. Things are moving, but I cannot add anything else, especially in view of the current situation, which suggests caution".
(Source:Class Editori)
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