PARIS • Prada reported the lowest full-year profit since its 2011 initial public offering, though it said it is confident of a turnaround as the maker of Miu Miu apparel sees signs of revival after a slump in Asian luxury demand.
Net income fell 16 per cent to €278.3 million (S$413.2 million) in the year until January, the group said on Wednesday.
While that missed the average analyst estimate of €294.7 million, Prada said, it has seen better indications in both Asia and Europe, in keeping with peers such as LVMH.
The maker of Car Shoe footwear was hit harder than most by a downturn in demand across Asia, where it gets about half its revenue.
Recent indicators have been better. Sales returned to growth in January, an initial sign that Prada is on the mend. The company raised its dividend to 12 euro cents a share, which it said is a sign of confidence in future growth.
"We believe that Prada is at trough Ebit margin and see new and appealing products in store for the consumer," Mr Luca Solca, an analyst at Exane BNP Paribas, said by e-mail. Profit missed estimates partly because of a higher tax rate, he said.
AT A GLANCE
NET INCOME: €278.3 million (S$413.2 million), down 16%
DIVIDEND: 12 euro cents a share
SHARE PRICE: HK$33.70
The Hong Kong-listed stock dropped as much as 2.2 per cent yesterday, closing at HK$33.70. That trimmed gains to about 30 per cent this year, compared with the Hang Seng Index's increase of about 10 per cent.
A decline in sales slowed to 6 per cent at constant exchange rates in the second half from 13 per cent in the first six months, Prada said.
The company saw a "strong rebound" in mainland China, which had double-digit sales growth in the fourth quarter. There were also signs of recovery in Europe, with the UK showing double-digit growth in the second half, as the drop in the value of sterling drew in foreign tourists.
Chief executive Patrizio Bertelli said: "2016 marks a turning point, as we are now firmly on the pathway to sustainable growth."
The company has said it hopes to speed up recovery by boosting e-commerce, particularly in footwear, and by reaching out to clients more aggressively on social media. It has also introduced more entry- priced accessories to hook a broader range of consumers.
"Coming up with fresh ideasin quick turnaround times has always been our speciality," Mr Bertelli said.
The company is open to possible acquisitions, though it has no active plans, he said.