Prada net profit drops 28% in 'challenging' market conditions

Italian luxury group Prada said Friday its nine-month profit dropped by 27.6 percent to 319.3 million euros ($394.9 million) due to challenging market conditions but expressed confidence in the medium-term outlook for the sector.
Sales at the group which also includes brands Miu Miu, Church's shoes and Car Shoe dipped 0.9 percent to 2.55 billion euros in the nine months to the end of October in its non-standard reporting year.
Prada said the period was "characterised also by unfavourable exchange rates trend for most of the nine months period and spoilt by some still enduring geo-political issues" in an earnings statement.
Chief executive Patrizio Bertelli said 2014 turned out to be more challenging than expected.
"On top of the ongoing difficult international economic environment, the luxury goods market is undergoing a certain readjustment, the extent and nature of which is not yet entirely clear," said Bertelli.
However he expressed confidence in the medium-term growth outlook, which combined with the company's efforts to increase efficiency and the performance of its stores should help ensure Prada achieves satisfactory levels of profitability.
All of its products lines saw increased sales in the nine months save for leather goods.
While the Asia-Pacific region had been a major source of growth for luxury companies until recently, Prada's sales there dipped by 3.1 percent, reflecting the political unrest in Hong Kong.
Sales in Europe except Italy slumped by 4.9 percent.
Japan registered strong 10.3 percent sales growth.
By brand, sales of Prada goods slipped 1.5 percent, while Miu Miu recorded a 1.5 percent gain. Church's shoes saw sales climb 7.1 percent, while those of Car shoe fell 16.6 percent.