After the endorsement of Cai Xukun, the PradaSpA (1913.HK) Prada, which has suffered from the biggest customer group--controversy in China, has deteriorated, including the luxury Dacoz goods market, and the Greater China and Asia-Pacific markets have also experienced a recession, only through the 77 million euro tax. The income of the item, the interim net profit recorded a significant increase in the book.
In the first half of June, Prada Group's Asia Pacific market sales recorded a 4.0% decline, from 519.6 million euros to 498.6 million euros, accounting for 32.2%. The rival Gucci Gucci and Louis Vuitton Louis Vuitton are the strongest markets, and the Prada Group continues to lose its share and competitiveness.
The Italian group's 6.4% fixed exchange rate decline in the Asia-Pacific market in the first half of the year was incomparable with Gucci's 16.3% organic growth and a comparable growth of 29% in the retail channel Asia-Pacific market, while LVMHMo?tHennessyLouisVuittonSE (MC.PA) Lu Wei Xuan Group Asia Pacific The market also recorded an organic increase of 18% in the first half of the year.
Salvatore FerragamoSpA (SFER.MI) Ferragamo, Burberry Group PLC (BRBY.L), and Hermès International SCA (HRMS.PA) Hermès International Group have achieved strong double-digit growth in the Chinese market, while Prada Group said that the first half of the year The Group's Greater China market sales fixed exchange rate calculation recorded a 5.1% decline, the euro calculated sales fell 2.3% to 336.6 million euros.
The Italian group attributed the downturn performance of Greater China to recent social events and exchange rate fluctuations, which brought down the Hong Kong market and said that it was alleviated by the favorable trend in mainland China and the support of local advertising initiatives.
However, in addition to Gucci, other strong and soft-selling peers said that the Hong Kong market has no impact on performance.
While competitors praised the strong double-digit performance of the mainland market, Prada Group said in the statement that China has a positive performance, while the Group's core leather goods sales in the Asia-Pacific and Middle East markets are sluggish, offsetting the European, American and Japanese markets. Increase.
In June of this year, Prada exposed an advertisement video played by Chinese social media “flow star” Cai Xukun on social media, and then held a menswear show in Shanghai. The market is worried that the new marketing strategy of the Italian group may further weaken its profitability.
According to the mid-year report, the advertising and promotion costs of the Prada Group increased by 8.8% to 101.5 million euros in the first half of the year, and the advertising promotion rate increased by 40 basis points to 6.5% year-on-year, both of which contracted from the whole year of 2018.
Data show that in 2018, the Prada Group's advertising rate increased by 60 basis points to 6.6%, advertising and public relations expenses rose 12.2% to 207.3 million euros.
In reviewing the interim results, Group CEO Patrizio Bertelli said that the company strategically stopped seasonal price cuts and rationally reorganized the wholesale channels, while all products in the full-price series and all major markets performed positively, indicating that this is the right choice. He also said that the price increase will strengthen the relationship with customers and improve the value of products.
In the statement, Patrizio Bertelli turned aversion to e-commerce a few years ago and praised digital innovation as the key to competition in a changing market. The company is committed to promoting the development of digital technology to improve decision-making efficiency.
Before the release of the China Daily, Prada had already met the unanimous sing of Wall Street, with Citigroup, Goldman Sachs and Lyon all giving Italian companies a “sell” rating, with Lyon’s target price as low as HK$17. The main concern of the organization is that the Italian group's reorganization of wholesale channels affects sales and profit margins, and marketing expenses may increase due to the promotion of the Chinese market.
After the EBIT core operating profit margin hit a new low of 10.3% in 2018, in the first half of 2019, the Pratt Group EBIT margin fell further to 9.6%, a drop of 170 basis points year-on-year and EBIT fell 13.2%. 150.5 billion euros, compared with 173.4 million euros in the same period in 2018.
Before the release of the interim results on Thursday, the market was very concerned about Prada's release. As an industry representative who has lost for five consecutive years, it is an important supplement for investors to make industry forecasts based on the already released Lu Wei Xuan and KeringSA (KER.PA) performance. .
On Monday, NoAgency analyst Tang Xiaotang released a forecast in the FlashFashion public account that the “Prada’s core earnings data will continue to decline” in the first half of the year.
On Thursday evening, in the briefing that NoAgency released to customers, Tang Xiaotang said that his fear of marketing expenses surged better than expected, indicating that the Italian group is still trying to control costs, and even some of its peers even up to 20% of marketing expenses growth. Compared with less than 9%, the growth rate is more restrained.
The Italian company is the only large luxury goods group that failed to follow the rise of luxury goods that began in the second half of 2016, but continues to decline. The company’s profits have been falling for five consecutive years, while income has fallen for four years, in 2018. There is a rebound.
Tang Xiaotang said that the current situation is very embarrassing for Prada. The rise in the luxury goods industry came to an end in the first half of 2019, and competitors were more aggressive than the Italian group, which was very passive for Prada, which needed to control costs. The analyst is even worried that if the luxury goods industry enters a new round of recession, Prada may be placed on the sale desk.
As of the end of June, the Prada Group's revenue rose 2.27% to 1,570.1 million euros, better than the market's expected 1.55 billion euros, of which sales revenue increased by 2.37% to 1.5464 billion euros, compared with 1.5106 billion euros in the same period of 2018. During the period, the fixed exchange rate of the Group's retail business revenue fell by 3.1%, the euro's calculation fell slightly by 0.4% to 1,231.9 million euros, and the wholesale income rose by 14.9% to 314.6 million euros. The fixed exchange rate increased by 13.7%.
In fixed exchange rate calculations, Prada, MiuMiu and Church’s rose by 1.4%, down 8.4% and 2.7% respectively; apparel, footwear and leather goods revenue rose by 5.3%, down 1.8% and 1.5% respectively.
Benefiting from the PatentBox tax incentives, Prada's net profit rose 55.7% to 154.9 million euros in the first half of the year, gross margin fell slightly by 30 basis points to 71.7%, and EBITDA margin fell 150 basis points to 31.2%.
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