Prada Group’s nine-month revenue advanced 9 percent at constant exchange rates as continued strong growth at Miu Miu overwhelmed a small decline at the Italian fashion house’s namesake brand.
Sales for the nine months ended Sept. 30 rose to €4.07 billion ($4.72 billion) from €3.83 billion in the same period last year, the company reported on Thursday. Prada, which trades on the Hong Kong stock exchange, doesn’t release consolidated third-quarter revenue figures, but did say the third quarter was its 19th straight quarter of sales growth.
The results were largely in line with analysts’ estimates.
Revenue at the Prada brand fell 0.8 percent in the third quarter, an improvement on the 1.9 percent drop in the first six months of the year. Miu Miu’s revenue advanced 29 percent in the third quarter, a slow-down on recent quarters, but a continuation of a four-year run of positive results.
Amid a two-year luxury downturn, Prada has consistently outperformed most of its peers, which have suffered more from a steep downturn in the Chinese market. More recently, the industry has begun to give timid signs of an upturn, with bellwether LVMH reporting a smaller-than-expected third-quarter revenue decline at its fashion and leather goods business and a 1 percent rise in consolidated revenue last week.
Going forward, much depends on how fast China’s sizable luxury market recovers.
“Chinese consumers are suffering from the drop in the real estate market and it will take time for them to feel in the mood to spend again,” Luca Solca, Bernstein’s managing director for luxury goods, said at a conference on Thursday. “If they digest the new reality of the value of the real estate market they can bring a lot of money to the fashion industry.”
For now, uncertainty continues to swirl around the global economy and the fashion industry. Many economists say it is still too early to draw definitive conclusions on what effect US tariffs will have on consumer sentiment. In particular, it remains unclear how the trade tussle between the US and China will play out.
“Despite a still challenging environment, we remain confident in our trajectory,” Prada chief executive Andrea Guerra said in a statement.
Prada’s group retail revenue, which accounts for 90 percent of the total, advanced in all of the company’s five geographic regions. Retail revenue in Asia Pacific excluding Japan, the largest region, rose 10 percent. Revenue in Europe advanced 6 percent and 15 percent in the Americas.
The results will be the last that Prada reports before closing its €1.25 billion acquisition of Versace, which is expected by the end of the month. The purchase is the biggest in the company’s more than century of history and will add a completely new look to the group.
Chief marketing officer Lorenzo Bertelli has highlighted the lack of aesthetic overlap as part of the strategic rationale for the deal, saying it will help the group diversify its customer base rather than add another label that will compete for the same customers.