Americas +15%, Middle East −22%: Prada grew anyway

Revenue at Italian luxury group Prada rose 3% at constant exchange rates in the first quarter, excluding Versace’s contribution, with double-digit sales growth in the Americas offsetting weakness in Europe and the Middle East.

Group revenue totalled €1.4 billion in the January-March period, broadly in line with an analysts’ consensus compiled by Visible Alpha. CEO Andrea Guerra said sales accelerated in particular in March and continued to rise in April, excluding the impact of the Middle East crisis.

Versace, which Prada acquired last year and is in the process of integrating and re-launching, contributed €143 million to quarterly revenue. The group said the brand, which recently hired Pieter Mulier as its new creative director, performed in line with expectations.

Miu Miu, the smaller label that drove the group’s revenue growth last year, slowed its pace, with sales up 2.4% in the quarter.

“The group delivered another quarter of growth in a disrupted environment and against the most challenging comparison base of the year,” Guerra said, adding that the group aims to deliver above-market growth.

By region the picture diverged sharply. Retail sales grew 15% organically in the Americas, supported by strong local demand, and were up 5% in Asia Pacific, driven by China and South Korea. Europe was down 6% due to weaker spending by travellers and a modest decline in local demand, though management said it had recently seen “encouraging signs in terms of travel spending.”

Middle East sales dropped 22% due to the Iran war. The conflict also affected other regions, as tourists from the Middle East and Asia found it harder to travel.