Prada Profit Falls Less Than Expected as Cost Cuts Balance Asia
PARIS, France — Prada SpA reported first-half profit that beat analysts’ estimates as efforts to contain costs helped mitigate declining sales in Asia. Net income fell 23 percent to 188.6 million euros ($213 million) in the six months through July, Milan-based Prada said Tuesday in a statement. Analysts predicted 175.4 million euros, according to the median of six estimates compiled by Bloomberg. Too many new stores and not enough new products have hurt Prada as demand for luxury goods slows in greater China following a clampdown on extravagance. In a bid to reignite sales and reverse a slump in its share price, the company introduced the Inside bag in July, with prices starting at about 2,000 euros. Prada has also slowed this year’s expansion, pledging to open about half the number of stores it did last year. “The global economic environment is still volatile and recent instability in Asia has not helped ease the situation,” Prada said.
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