Prada: FY13 results below expectations, prospective growth rates should be closer to peers

BUY, Fair Value HKD80 vs. HKD87 (+30%)

News published on April Thursday 3, 2014
Share on

Prada unveiled FY13 results which missed estimates, with an EBIT margin declining by 80bps to 26.2% whilst investors were expecting 27%. This difference comes from Miu Miu and the dramatic inflation in the group’s opex costs related to retail expansion (+79 DOS in 2013) and we expect this headwind to continue in FY14 and partially in FY15 as DOS openings will remain a major catalyst for Prada and Miu Miu, as highlighted in the group’s three-year plan presented yesterday at the Investors Day. Following the lower-than-expected FY13 results and the 2014-16 guidance, we are revising down our FY14-15 estimates by 6% on average, leading to our new FV our HKD80. Despite lower growth rate assumptions, they remain among the “best-in-class” within the luxury industry. Buy reiterated.

Full report available to subscribers
Please contact   

The Essentials

Everything you need to know about investment banking dedicated to growth
Stay Informed
Get our news
Join our Team
Bryan, Garnier & Co is always looking for talent in all our divisions, at all levels
Explore our opportunities