The Business Performance of the Prada Group in FY 2022 and Q1 2023.
25 July, 2023
Table of contents
The Prada SPA have seen an excellent performance in the financial year of 2022 and a solid start in the first quarter of 2023. The brand earned net revenue of €4.2 billion in 2022, accounting for a 23% hike year-over-year and €1,065 million, with a 22% increase year-over-year comparison, in the first quarter of 2023.
In 2022, the customer desirability for Prada and Miu Miu was high. According to the Lyst Index list, in the fourth quarter of 2022, the brands Prada and Miu Miu were ranked first and fourth respectively, indicating that the Prada S.p.A was the only company to have its two major brands within the top five. Additionally, Lyst named Miu Miu the “Brand of the Year.” Both brands witnessed favourable product releases, efficient talent strategies, and active event formats, contributing to audience growth and heightened brand awareness.
Similarly, the brands, along with high customer desirability, earned immense brand momentum in the first quarter of 2023. Prada is continuing to rule over its brand traction succeeded by the FW23 Men’s and Women’s shows. The brand made several profitable activations, including retail events to display the Eternal Gold fine jewellery collection. There were some introductions in Leather goods, such as the “Moon” bag and the development of lines like “Galleria” and “Re-Nylon.” The brand also opened a Prada Caffè at Harrods, London. Prada looped the K-Pop band ENHYPEN as its latest global brand ambassadors.
Due to the success of the FW23 fashion show, the launch of the Miu Miu SS23 campaign with Kendall Jenner and Emma Corrin, and the second drop of “New Balance for Miu Miu” sneakers, Miu Miu’s awareness and brand momentum increased.
While comparing the fiscal years 2021 and 2022, the net revenue has a 21% increase, with a 24% increase in revenue sales, a 2% decrease in wholesale sales, and a 55% increase in royalties.
The net revenue has enhanced by 22% from Q1 of 2022 to Q1 of 2023, with a 23% rise in retail sales, a 9% rise in wholesale sales, and a 52% rise in royalties.
By the end of 2022, retail sales were up 24% from the year before, billing €3.7 billion. Online sales’ double-digit growth is driven by investments in the channel, especially in the omnichannel experience. The penetration remains in a stable state at 7%.
At the same time, Prada and Miu Miu saw strong growth with both average price and full-price volumes. Miu Miu had a 20% revenue growth and an acute acceleration in H2, with its well-received product launches, fashion events, and shows. Whereas, Prada had a revenue increase of 25% with a sustained brand momentum.
In Q1 2023, retail sales witnessed growth of 23% year-over-year because of the full price and like-for-like sales. The growth is enhanced by 14% in Q4 2022. The group got an optimistic addition from both full-price and average-price volumes. While comparing Q4 of 2022, the retail sales of Prada advanced by 21% and Miu Miu boosted to +42% in Q1 of 2023.
In 2022, the group faced immense strength from all the product categories and their gross profit accounted for 78.8% of the revenues. The group is undergoing crucial governance changes as a progressive step. There was a balanced growth in the categories: Leather Goods (increased by 18%), Ready To Wear (increased by 27%) and Footwear (increased by 29%).
In the first quarter of 2023, there is a double-digit rise in all the product categories. The overall Leather Goods increased by 14% in a continuous exchange rate, guided by the latest and most popular brands. The Ready-to-Wear category stayed at a faster growth pace of 38%. Whereas the Footwear department rose by 20% with its constant success rate in lifestyle and formal collections.
Due to multiple lockdowns in China in 2022, the Asia-Pacific region faced a decline of 2% year-over-year. However, as a result of a strong performance in South Korea and South-East Asia, the sales moderately grew in H2, getting a 3% hike. There was a sharp increase of 63% in revenue in Europe, accounted for by domestic sales and rising tourism. America had a growth of 22% with its ongoing tourist flow and healthy comparative. Japan increased by 31% and the Middle East by 23%.
Retail sales went up by 22% in Asia-Pacific. China regained its stability and there is solid growth in Southeast Asia. Europe sustained growth of 28% due to local sales and tourism. America has increased by 5%. Japan saw a 55% rise, with the Group’s investment in retail channels, stable domestic demands, and tourism growth. The Middle East has a solid rise of 15%.
Cover Image: Woman with Prada Galleria Bag, courtesy Prada Official Website