Prada'S Three Quarter Performance Deteriorated Sharply And Net Profit Plummeted.

In the three quarter of October 31st, the Prada SpA group achieved 800 million 700 thousand euros in revenue, down 5.6% from 848 million euros in the same period last year, mainly due to the weak demand of flagship brand Prada Prada's leather products in Europe and the Asia Pacific region.

In the first half of fiscal year, though the growth slowed down, there was a 1.3% increase in group income.

During the period, Prada Prada brand sales fell 7.5% to 651 million 800 thousand euros compared to the same period. On the contrary, Miu Miu showed a positive trend, achieving 4.8% growth, and Church's also increased 4.2%.

The main source of income of the group's leather products sales fell 9.1%, or 3.9% faster than the first half of the year.

Clothing sales also decreased by 3.4% while shoe sales increased by 3.5%.

By region, the four largest markets in which revenues account for the heaviest sales are all down compared with the same period last year. The largest market in the Asia Pacific region dropped by 6.8% to 284 million euros compared with the same period last year. In October, Hongkong's "occupy the middle" movement had a heavy blow to sales, and sales in the Greater China region dropped 9%, and the rate of decline after the exchange rate had dropped to 12%. The group pointed out that the area showed a significant deterioration in October.

And Italy's domestic market recorded a decline of 7.6% and 10.8% respectively, while the Americas fell 1%.

Only Japan and the Middle East recorded growth of 4.7% and 1.6% respectively.

The group said

The trend is bleak (especially leather goods), plus sales expenditure increased by 12.5% year on year, and the three quarter profit targets are under enormous pressure.

Gross profit margin fell 280 basis points to 72.3% from 75.4% in the same period last year.

The profit before the depreciation and amortization of EBITDA is 188 million 800 thousand euros, which is 30% lower than that of 269 million 900 thousand euro last year, which also led to a sharp decrease of EBITDA profit margins by 820 basis points to 23.6%.

Net profit fell to 74 million 473 thousand euros from 132 million 600 thousand euros in the same period last year, far below the market forecast of 108 million 600 thousand euros, a decline of 43.9%, and profit margins also declined from 9.3% in the same period last year to 9.3%.

SpA Prada said in its earnings report that based on the "severe international economic environment, the luxury market is also being adjusted, and its magnitude and nature are not yet clear". The group is only "confident about long-term growth", which means that the Group expects to continue downward trend in the near future.

In the past half a year, Credit Suisse Group AG Credit Suisse, which has repeatedly lowered the target price of Prada SpA SpA, also expects that the group's revenue decline will last for at least three quarters.

In the first nine months of October 31st, the income of Prada SpA Prada group fell by 0.9% to 2 billion 552 million euros, excluding the slight increase in the exchange rate. The retail sales dropped 0.5% to 2 billion 171 million 700 thousand euros, excluding the exchange rate increase by 1.3%. However, the growth was basically driven by a net increase of 64 new stores during the period.

EBITDA was 681 million 700 thousand euros, 17% less than last year's 821 million euros, and EBITDA profit margin decreased from 31.9% to 26.7%.

Net profit was 319 million 300 thousand euros, down 27.6% from 440 million 900 thousand euros in the same period last year.

Prada SpA Prada closed at HK $47.25 on Friday, down 1.56% throughout the day.

The stock has fallen to 32.4% in 2014 and 3.2% in the Hang Seng Index.