Shares of Prada (HKG:1913) moved to the highest levels observed since 2015 as the company said it expects to return to being profitable despite plunging sales in the first half of the year.
Fundamental analysis: Strong recovery in H2
Prada, an Italian luxury fashion house, announced yesterday it has managed to return to profitability near the end of the last year. This is despite suffering immensely in the first half of the year amid the pandemic.
In a trading update, Prada said sales recovered fully to pre-pandemic levels. Earlier, Prada announced that its revenues plunged by 40%, resulting in a 196 million euros operating loss The full-year results are due in March.
“Despite being impacted by ongoing store closures averaging 9% of the network, [Prada] saw a progressive recovery in sales, culminating for the retail sales in a full recovery to 2019 levels in the month of December,” the company said in the statement.
The Italy-based company witnessed a strong recovery in one of its key markets in China, where sales rose 52%. Japan and Europe struggled to sustain its recovery while the U.S. and the Middle East also recorded strong sales.
“I am very satisfied with how we have faced the serious difficulties of the year just ended and how, despite the persistent uncertainty which will likely continue for the next months, we have managed to deliver positive results,” Patrizio Bertelli, Prada’s chief executive, said.
“Thanks to the generous commitment of all group staff, we were able to respond rapidly and consistently to market changes, which has been appreciated by all of our customers.”
Technical analysis: Multi-year highs
Prada stock price recorded a fantastic performance in the two final months of 2020 when it gained about 65%. This way, the buyers managed to clear the multi-year resistance located at 47.80, the level that is now acting as a support line during the pullback.
A sustainable trading activity above this zone would create a solid basis for a continued push higher. The buyers will eye the zone around 56.00 next.
The luxury fashion brand Prada said it managed to close the last year in the green after witnessing a full recovery in the second half of the year.
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