Italian luxury fashion brand Prada SpA reported a bigger-than-expected 44% drop in third-quarter profit in Hong Kong as the city’s pro-democracy protests weighed on Asian sales and leather goods revenue declined. Prada’s net income plummeted to $92 million in the three months through October and sales dropped 5.6% to $984 million.
According to the company, the trends have significantly deteriorated in the region. Prada expects profit margins to remain under pressure in the second half, while annual sales may remain unchanged. The company plans to take measures to boost efficiency in the short term.
The Hong Kong protests led to a drop in consumption as some luxury goods makers shuttered stores. Weak spending by tourists in Europe also weighed on demand, and leather goods sales fell 11% at constant currency rates.