Prada Swings to Profit, Reports Strong Growth in First Half of 2021

·2 min read

MILAN – A strong performance in its retail business, a triple-digit percentage growth in its online channel, and solid gains in Asia-Pacific and U.S. markets helped Prada SpA return to the black in the first half of the year.

In the six months ended June 30, the Italian luxury group reported a net profit of 97 million euros. This compares with a loss of 180 million euros in the same period last year.

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Revenues amounted to 1.5 billion euros, up 60 percent compared with 938 million euros in the first half of 2020.

“The commitment to our brands and stronger ties with our customers have delivered robust growth in sales across markets and product categories,” said chief executive officer Patrizio Bertelli. “We improved gross margin as well as the group’s profitability, despite the uncertain environment. The sales momentum will stay strong in the second half of the year. Our brands have plenty of potential and we will unlock it over the medium term. I look forward to updating the market on this and other topics at a Capital Markets Day that will take place in the autumn.”

Operating profit amounted to 166 million euros, compared with an operating loss of 83 million euros in the same period last year. In the first half of 2019, operating profit totalled 150 million euros.

The company on Thursday said that full-price sales had driven profitability, as did a disciplined management of operating costs, resulting in an operating profit above pre-pandemic levels.

During the first half of 2021, an average of around 17 percent of stores were closed, but retail sales climbed 60 percent to 1.28 billion euros compared with the first half of 2020. At constant exchange rates and compared with the first half of 2019, they were up 8 percent, showing a strong acceleration in the second quarter. The latter showed a double-digit growth compared with the second quarter of 2019.

The online channel now accounts for 7 percent of retail sales.

Wholesale revenues decreased 37 percent to 196 million euros compared with the first half of 2019, in line with the group’s selective approach to the channel.

Capital expenditures amounted to 75 million euros, compared with 49 million euros last year.

The net financial position stood at a negative 102 million euros, improving from a negative 311 million euros at the end of December last year.

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