Sales down 40% in the half-year, yet Prada still believes in a square 2020

Sales down 40% in the half-year, yet Prada still believes in a square 2020

A square 2020 is still feasible. In the first six months of the year, Prada revenues slumped by 40% at fixed rates of exchange, therefore leading to a 180-million-euro net loss. Yet China and online sales are already picking up. That is why the luxury group still believes they will be able to reach, at the end of the year, a square operating margin. They will manage to achieve this goal as long as sales, in the second half-year period, are, at least, as rewarding as last year, in the same period.

A square 2020

“In the first six months of 2020 our business growth has been suffering from a temporary disruption – commented Patrizio Bertelli, Chief Executive Officer of Prada Group –. While progressively handling the pandemic, and its impact, we are confident our growth will gradually enjoy a recovery by the end of the year: by that time, our sales network will be running again at full speed. Positive business trends, recently observed in all markets, along with our sound patrimonial and financial standing, make us optimistic, for the time being, about the future”.

The business trend in the half-year period

At the end of the first half-year period, Prada revenues amounted to 938 million euros. Retail sales have dropped by 32%, whereas wholesale slumped by 71% (both at fixed rates of exchange). According to Smart estimates consensus, provided by Refinitiv, financial analysts were expecting, on average, overall revenues to decrease by around 35% and a 130-million-euro negative EBIT (compared to 196 million euros actually reached). As emphasized by the group, e-commerce channel sales have been increasing in triple figures “both during and after lockdown”.

In the first six months of the year, online sales have been rising by 150%, while in June and July they went up by 300%. China has been further driving earnings: +11% in April, +35% in May and +54% in June. “Not to mention +66% in July”, remarked Chief Financial Officer Alessandra Cozzarini (Reuters source).

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