Prada sees a bright future for 2023 thanks to China's economy returning to normal following the easing of pandemic restrictions

Milan (AFP) - Italian luxury group Prada said Thursday its profits jumped in 2022 as strong sales in Europe and the United States offset declines in China, and that it expects its sales to outpace the market this year.

It follows a trend across the luxury goods sector that saw record sales and profits last year despite stifled global growth and disruptions in China due to draconian coronavirus-related travel restrictions.

Prada Group, which also includes brands Miu Miu and Church’s, said net profits soared 58 percent to 465 million euros ($492 million). That beat the analyst consensus established by financial data provider Factset by 10 million euros.

Revenues climbed 25 percent to 4.2 billion euros, also beating the analyst consensus.

But the company saw slight declines in China resulting from stores closures during lockdowns periods.

“We performed well across all product categories and geographies, more than offsetting weakness in China due to Covid-19,” said Prada executive director Patrizio Bertelli.

Sales spiked in Europe by 59 percent, driven by the recovery of international tourism from the second quarter, while the US market saw steady growth of 37 percent.

Looking ahead at 2023, “we expect revenue growth to remain solid and above market average,” said Andrea Guerra, the group’s new chief executive.

China’s scrapping of its last zero-Covid policies in January is being looked at as a growth opportunity for the sector this year.

“China has restarted to be an engine of growth, however, in this ever-changing scenario, we will remain vigilant and maintain a disciplined approach to costs and capital allocation,” Guerra said.

Having joined in January, Guerra will be at Prada’s helm until Lorenzo Bertelli, eldest son of former CEO Patrizio Bertelli and designer Miuccia Prada, transitions into the role.