MILAN (Reuters) -Third-quarter net revenues for Prada rose 17.7% at constant exchange rates, driven by double-digit retail sales growth in Asia and Europe and the doubling of sales at the smaller Miu Miu brand, the Italian luxury group said on Wednesday.
Sales in the Asia Pacific region, in the spotlight as investors are concerned about the slowdown in Chinese demand for luxury goods, rose 12% in the third quarter despite the more challenging environment.
Chief Executive Andrea Guerra struck a cautious tone on prospects in China despite the robust regional sales.
“China is more complicated today and not necessarily improving in the near future,” he told analysts in a post-results conference call.
The main brand Prada reported a 1.7% increase in retail sales in the three-month period, slowing down compared to the previous quarter.
“For sure, China has been the main detractor,” Guerra said.
The sales growth at Miu Miu exceeded the group’s expectations, the Prada CEO told analysts, and the brand now contributes one quarter of the group’s total retail sales.
Miu Miu’s CEO Benedetta Petruzzo left the label in September to join Christian Dior Couture. A new chief executive for the brand is expected to be appointed in one to three months.
“We progressed through the year with another quarter of high-quality, like-for-like growth, supporting our positive trajectory in both revenue and margins,” the Prada CEO said in the results statement. Nine-months revenues reached 3.8 billion euros.
The luxury sector is suffering a slowdown.
Earlier this month Kering reported that its revenues fell 16% on an organic basis and luxury bellwether LVMH missed expectations, flagging a drop in Chinese consumer confidence.
Some blamed the sharp increase in prices for the slowdown in luxury goods demand. Prada’s CEO explained that the group sees scope to push up the prices for some of its products.
“I think that we are well positioned on entry prices, but we have yet quite a substantial territory (to go) in extending the price range upwards,” he said.
(Reporting by Elisa Anzolin, editing by Keith Weir and Alvise ArmelliniEditing by Keith Weir)
