China’s slowdown has claimed another corporate scalp, with shares of Italian fashion house Prada SpA sliding the most since January after a pullback in the world’s biggest consumer market contributed to an unexpected drop in annual profit.
The Hong Kong-listed luxury group attributed a slump in Asia mostly to Chinese tourists pulling back spending in Hong Kong and Macau because of the weakness in the yuan. Other luxury brands including Gucci have seen the impact of softer buying by Chinese tourists offset by increased spending on the mainland, but Prada failed to get a similar boost from Chinese spending at home, said Citigroup analysts led by Thomas Chauvet.
Prada’s operating profit declined 10 percent to 323.8 million euros ($366 million), falling short of the 378 million euros predicted by analysts. Prada shares slumped as much as 9.2 percent in early Hong Kong trading Monday, the biggest intraday drop since Jan. 14. The stock has lost about 36 percent over the past year.