Italian luxury group Prada has started the year off on a strong note, with a 22% increase in sales in the first quarter, reaching a total of 1.065 billion euros. Several factors contributed to this impressive growth, including heightened brand visibility, particularly for its Miu Miu brand, a surge in retail sales, and significant expansion in the Asia-Pacific region, specifically in China.

Prada, which also owns Car Shoe and Church’s, is thrilled with the success of its flagship brands, Prada and Miu Miu. Prada, designed by Miuccia Prada in collaboration with Raf Simons, continued to enhance its desirability through its autumn-winter 2023/24 shows and various initiatives, such as the launch of the Eternal Gold jewelry collection and in-store activities. The brand’s retail sales increased by 21% at constant exchange rates.

Under the leadership of Miuccia Prada, Miu Miu experienced a notable boost in retail sales, with a remarkable 42% rise at constant exchange rates. This achievement can be attributed to the success of its fashion show in Paris, as well as the exceptional performance following the second launch of New Balance sneakers for Miu Miu and an expanded range of leather goods, accompanied by the introduction of the new Pocket bag.

Direct distribution now accounts for the majority of Prada Group’s revenue, with a turnover of 953 million euros in the first quarter, marking a 22% increase compared to the 14% growth recorded in the fourth quarter of 2022. This growth is mainly due to the development of year-on-year like-for-like sales. Retail sales for leather goods increased by 14%, ready-to-wear by 38%, and shoes by 20%. As a result, the group intends to prioritize the retail channel and improve productivity in its stores throughout the year. The company plans to invest in its brands, sales network, and overall structure.

Meanwhile, revenues from the wholesale channel saw a modest 9% increase, amounting to 91 million euros. However, royalties received by the group surged by an impressive 52% from 14 million euros in the first quarter of 2022 to 21 million euros a year later.

Prada’s CEO, Andrea Guerra, expressed satisfaction with the positive start to the year, particularly highlighting the significant recovery in sales in the Asia-Pacific region, driven by China. He emphasized the strong growth across all product categories and geographical areas. Chairman and executive director, Patrizio Bertelli, echoed this sentiment, expressing confidence in the company’s future.

In terms of regional breakdown, Asia-Pacific remains Prada’s primary market, with retail sales totaling 360 million euros, a 22% increase. This growth can be attributed to the recovery in China following the easing of anti-Covid measures and increased sales towards the end of the quarter. Japan also saw a significant increase in retail sales, reaching 113 million euros, representing a 44% rise. This growth is attributed to investments in the retail network, as well as increased demand from both domestic and international tourists.

In Europe, Prada continued its upward trajectory, with retail sales amounting to 259 million euros, a 26% increase compared to the first quarter of 2022. This growth was driven by strong demand from local customers and a resurgence in tourist activity. In the Americas, retail sales increased by 10% (5% at constant exchange rates) to reach 158 million euros, while the Middle East experienced a 30% increase, with retail sales totaling 39 million euros.

Overall, Prada’s first quarter performance has been more than satisfactory and aligns with the quarterly results of other luxury powerhouses like LVMH and Hermès. This signals a positive outlook for the group, which aims to surpass 4.5 billion euros by the end of 2023.

Links:
Prada Official Website
LVMH Official Website