Prada shares plummet after disappointing first-half performance
Hong Kong-listed luxury giant has been grappling with declining fortunes since 2015. CLSA downgrades to ‘sell’. Shares end the day down nearly 14pc
Shares in luxury Italian fashion house Prada lost nearly 14 per cent of their value on Monday after the Hong Kong-listed company was downgraded from “underperform” to “sell” by brokerage and investment firm CLSA, as the luxury giant reported disappointing first half sales.
Its price dropped to HK$24.05 (US$3.09) from last Friday’s HK$28 close.
“While we believe Prada is still a one of the top fashion labels in the world, the company has been unable to ride the luxury [sector’s] recovery,” said analysts from CLSA.
“The investments required to capture fast-changing digital-savvy consumers further weighed on the company’s results.”
CLSA called the first half of the Italian maker of luxury handbags and shoes “very disappointing”, adjusting its target price from HK$28.5 to HK$22.
Milan-based Prada has been grappling with declining sales since 2015, when net profit fell by 27 per cent to €330.9 million (US$377 million), to be followed a year later by a 16 per cent fall to €278.3 million.