Italian luxury goods maker Prada predicted a return to sales and profit growth next year, partly helped by improved sales trends in China, after posting a 25 percent drop in first-half underlying earnings and net profit. The group, which has been hard hit by the global luxury spending slump, said in a statement it saw 2016 as "a turning point from where the group will return to growth."
"We expect growth to come back after this year," Prada Chairman Carlo Mazzi told Reuters in an interview. Later in a call with analysts, Mazzi said the group expected both sales and profit growth to return in 2017.
Last time Prada's sales rose on a like-for-like basis, excluding currency effects and a boost from new stores, was in 2014.
The Prada group, which makes the bulk of its sales from the Prada brand, but also owns the Miu Miu, Church's and Car Shoe labels, said spending in mainland China had improved in August thanks to government measures that helped repatriate spending home.
Since April, China has been raising fees on packages ordered from abroad and cracking down on smugglers who carry in suitcases full of luxury goods, in an effort to encourage shopping at home and squeeze a grey market that enables shoppers to avoid paying taxes.
In its fiscal first half, Prada suffered particularly in greater China where retail revenue fell 24 percent and in its home market Italy where it dived 21 percent.