Prada (1913 HK): Issues to consider
Without making any recommendation about the company’s securities, we suggest that anyone interested in Prada might want to ask the following questions:
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- Prada is talking about a return to growth but is cutting sales staff?
- Prada says the inventory increase is due to new shops, yet its lease commitments, i.e. shop rental space, has fallen.
- Inventory days appear to have risen because of reduced inventory write-downs. Does this make sense when sales have declined?
- Large dividends have cut the companies cash balances and leave the company with the lowest sales/net debt and lease obligations ratio. Is this wise?
- Prada is now the most expensive luxury goods brand. Does this make sense when they are struggling to grow and their margins are amongst the lowest of their peers?
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Important
This note is written with the sole purpose of highlighting some issues we think are important.
It is not a recommendation to BUY or SELL any of the securities mentioned and should not be taken as such.
Readers should form their own opinions about the company and seek appropriate advice.
Please read the Bucephalus disclaimer.
This note is written with the sole purpose of highlighting some issues we think are important.
It is not a recommendation to BUY or SELL any of the securities mentioned and should not be taken as such.
Readers should form their own opinions about the company and seek appropriate advice.
Please read the Bucephalus disclaimer.