Prada SpA reported that its full-year sales trailed estimates as fewer Chinese shoppers splurged on luxury products. The Milan-based design house reported that revenue fell 1 percent to 3.55 billion euros ($4 billion) in the 12 months through January 2015. Analysts predicted 3.57 billion euros, according to the median analyst estimate compiled by Bloomberg. While companies from LVMH Moet Hennessy Louis Vuitton SA to Hermes International SCA have also been weighed down by slowing demand, Prada didn’t react fast enough to changes in consumer behavior, particularly around price, according to RBC Capital Markets analysts. Profit margins will remain under pressure in the second half, Prada said in December as it announced plans to open fewer stores in fiscal 2016 and to introduce more bags priced between 1,000 euros and 1,200 euros.
“We believe in the long-term appeal of the Prada brand, but we think that it is still too early to buy the stock,” RBC analyst Rogerio Fujimori said before the numbers were published. Prada shares were unchanged at HK$42.60 at the close of Hong Kong trading on Feb. 18, the last day that the local stock market was open before the Lunar New Year holidays. The slowdown in sales has gained pace since nine-month results, when net revenues dropped 0.9 percent.