Image Continued To Reduce Points Prada Net Profit Fell 40% In The Three Quarter

In September of this year, if you buy a Prada bag for a year, the zipper is not bad, LOGO is not lost, no line is not fading, the quality bar is good, it can basically confirm that you bought a fake product. The famous fashion blogger micro-blog has been dubbed "advanced black" by netizens. This report on the Prada quality issue that has been constantly exposed has made the image of Prada high quality luxury brand continuously reduced.

In September, Prada Prada group exposed the executive director Miuccia Prada Bianchi and chief executive officer, executive director and major shareholder Patrizio Bertelli, and received the notice of the Ministry of justice of Italy to examine the accuracy of some past tax returns made by foreign companies in their personal names.

Although the Prada Prada group said in a statement, the two executives have nothing to do with the review of the group's affairs, but the incident has a bearing on the reputation of the group.

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.

The European and Italy domestic markets 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 that due to the dim sales trend (especially leather goods), plus sales expenses increased by 12.5% annually, the three quarter profit targets were 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%.

Prada SpA Prada said in its earnings report that the luxury market is also being adjusted based on the "severe international economic environment, 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.

Up to the first nine months of October 31st,

SpA Prada group's revenue fell by 0.9% to 2 billion 552 million euros a year, excluding the slight increase in the exchange rate effect of 0.5%.

Sales fell by 0.5% to 2 billion 171 million 700 thousand euros, excluding exchange rate increases of 1.3%, but growth was basically driven by a net increase of 64 new stores during the period.

The adjustment is another self help tactic of Prada Prada group.

It said it plans to increase its price at 1000-1200 euro entry level products and high-end products at 2500-2700 euros to complement wider consumer groups.

However, increasing entry level products is not considered to be self rescue, but is probably suicide.

Zhou Ting, President of the Institute of wealth and quality, said he did not favor the Prada Prada group's practice of adding entry-level luxury products. "Such self-help measures are more like" suicide ". Pulling down the price per unit means lowering the brand value. It may partially compensate for losses in the short term, but the core value of the brand is diluted, which is seriously damaging to the brand value.