Prada increased its footwear revenues by 36.0 percent to €134.7 million in the first quarter ended on April 30. The product's share of total group revenues slipped to 20.0 percent from 22.0 percent a year earlier as the leathergoods category grew faster.
Prada increased its top line by 47.9 percent to €686.7 million in the quarter. Growth reached 41.5 percent at constant currency rates. Sales were lifted by the expansion of the group's retail network and positive comparable store sales as well as a strong performance of the wholesale business, which benefited from delayed deliveries initially scheduled for the fourth quarter.
Leathergoods bolstered sales by 58.0 percent to €417.3 million, ready-to-wear was up by 30.0 percent to €113.8 million and other products rose by 43.0 percent to €7.5 million. Leathergoods sales were underpinned by purchases by tourists.
All main brands booked double-digit growth rates in sales. Revenues were up by 53.0 percent to €541.5 million for Prada, by 31.0 percent to €107.3 million for Miu Miu, by 19.0 percent to €16.3 million for Church's, and by 44.0 percent to 6.3 million for Car Shoe. Other collections fell by 12.0 percent to €1.8 million.
Group sales rose by a strong double-digit pace in all markets led by Europe, whose sales were lifted by tourists, who generate about 50.0 percent of the region's revenues.
Revenues grew by 54.0 percent to €110.1 million in Italy, by 57.0 percent to €148.0 million in the rest of Europe, by 34.0 percent to €86.5 million in the Americas, by 47.0 percent to €252.8 million in Asia-Pacific, by 39.0 percent to €70.7 million in Japan, and by 265.0 percent to €5.3 million in other countries. Sales in Greater China, which are included in the Asia-Pacific tally, rose by 54.0 percent to €161.6 million.
At group level, retail sales increased by 49.0 percent to €569.7 million lifted by comparable store sales and new openings. Same-store sales were up by 19.0 percent globally. They rose by 17.0 percent in Italy, by 31.0 percent in the rest of Europe, by 13.0 percent in the Americas, and by 22.0 percent in Asia-Pacific, driven by Greater China, up by 24.0 percent. Same-store sales rose by only 3.0 percent in Japan.
The company added 65 directly operated stores (DOS) year-on-year, bringing the total to 395 units. In the first quarter, it opened eight stores worldwide and closed one in Japan. One store opening was in Italy, four in the rest of Europe, two in the Americas and one in Asia. The number of Prada stores rose to 251 from 212 a year earlier, Miu Miu banners went to 95 from 77, Church's to 43 from 36 and Car Shoe to six from five. With the openings achieved at the beginning of the second quarter, the number of DOS reached 402.
Wholesale turnover rose by 42.0 percent to €103.6 million. About 2.5 percentage points of the increase was apparently generated by sales carried forward from the fourth quarter.
The group's gross margin narrowed to 72.3 percent from 73.5 percent due to higher costs and the product mix. However, the Ebitda margin rose to 29.1 percent from 24.3 percent a year earlier thanks to economies of scale. The Ebit margin increased to 24.0 percent from 17.3 percent and the net margin widened to 17.7 percent from 12.4 percent.
Capital expenditure reached €55.0 million, of which €37.0 million went toward the retail network and €10 million for the acquisition of industrial facilities. The company aims to open 80-85 stores in the current financial year. It has signed leases for about half the locations and is in talks for the rest.
Thanks to a strong cash flow, the cash pile rose to €122.4 million at the end of April from €15.8 million at the end of January.
Prada's chief executive, Patrizio Bertelli, said that he was extremely pleased about the quarterly results, especially as they were achieved in an uncertain and unpredictable business environment. The brokerage DBS Vickers Securities estimates that Prada's results will be supported by the increase in the number of DOS and higher tourist purchases thanks to the weaker euro. Financial analysts forecast the group's top line will exceed €3.1 billion in the full year. The bottom line is seen above €550 million and the cash pile should approach €240 million.