PARIS, Dec 23 — Prada SpA dropped the most in six months in Hong Kong after the company said it may fall short of analysts’ forecast for fiscal-year revenue following unfavorable currency moves and slowing Europe and Asia demand.

Prada fell as much as 5 per cent to HK$68 (RM28.83), headed for the biggest loss since June 24. It has dropped 8 per cent this year, compared with the 1 per cent gain in the benchmark Hang Seng Index.

The Milan-based company said on December 20 third-quarter net income rose 8.6 per cent to €132.6 million (RMRM596.9 million), lagging an average estimate of €153 million from eight analysts compiled by Bloomberg.

“Consensus at the moment is challenging,” Chief Financial Officer Donatello Galli said, without specifying a figure, during the December 20 conference call. Before the earnings announcement, analysts were predicting that sales in the year through January would rise to €3.71 billion from €3.3 billion, according to the average of 32 estimates compiled by Bloomberg.

Prada, whose products include US$2,950 (about RM9706) leather handbags, joins European luxury-goods makers including LVMH Moet Hennessy Louis Vuitton SA and Gucci owner Kering SA in reporting slowing revenue growth as Chinese demand wanes and the euro strengthens against currencies including the Japanese yen. Fewer Chinese consumers are shopping in Europe, preferring instead to go to the US, while domestic consumption remains under pressure in Italy and Spain, Chief Executive Officer Patrizio Bertelli said on the call.

“Unfavorable exchange rates and softening consumption patterns in some regions could weigh on results, and thus will require increasing attention by the management in order to ensure profitability and continue the retail expansion,” Prada said in a statement.

Sales network

Prada had 516 stores at the end of October. The company plans to open about 80 more a year through 2015, Investor Relations Director Alessandra Cozzani said on the call. Prada got 86 per cent of sales from its own stores in the nine months through October.

Profit was affected by a higher-than-expected tax rate, Prada said. The company, which is in talks with Italian tax authorities on how to interpret legislation related to foreign holdings, said in a separate statement that its holding company will repatriate non-Italian activities.

Revenue for the three months ended October rose 7.1 per cent to €848 million, also trailing predictions. Sales advanced 13 per cent, excluding currency shifts, Prada said.

Margins are likely to be stable the coming year, as efforts to widen earnings as a proportion of sales “may eventually jeopardize our commercial penetration,” Bertelli said. — Bloomberg