The Prada Group reported strong FY23 growth at an investors’ call today, with revenues growing by 17 percent (at constant exchange rates), mostly in line with analyst expectations. Adjusted EBIT growth was 26 percent, generating a 22.5 percent margin.
Growth was exceptionally strong for Miu Miu, which comprises 15 percent of group revenues, with revenues growing by 58 percent for the FY after a searing 82 percent growth rate in Q4. Prada, comprising 83 percent of revenues, also reported solid growth of 12 percent for the FY, while Church’s was down 13 percent for the year.
This rate of growth puts Prada Group near the median of major luxury brands this earnings season as the group trailed the top performers such as Hermès, Zegna, and Brunello Cucinelli and their 20+ percent rates of growth. Still, it was above industry giant LVMH’s roughly 9 percent growth rate.
One of the differentiators of the good from the great performers for FY23 was the evenness of sales performance across geographies. Weaker performers have struggled in the Americas and Europe and saw growth driven principally in Asia, while top performers continued to report pandemic-era-like bullish growth rates in all regions. Prada joins the good in this sense, with sales growth especially strong in Asia ex Japan (24 percent) and Japan (44 percent), while growth in Europe was good but not great (14 percent), and sales in the Americas were about zero.
Prada’s share price has outperformed the broader FSW High Frequency Luxury Monitor All Luxury index this year (see chart below). There may not be too much more room to grow with a P/E of 25.4x, which is on par with LVMH (26.0x) and Zegna (29.4x) but well below the astronomical levels of Brunello Cucinelli (66.3x) and Hermès (51.8x).