Capri Holdings posts drop in revenue and earnings

Capri Holdings Limited’s third quarter revenue decreased 6 percent on a reported basis and 0.5 percent in constant currency to 1.51 billion dollars.

Gross profit was 1.01 billion dollars and gross margin was 66.5 percent compared to 1.05 billion dollars and 65.1 percent in the prior year. Adjusted gross profit was 1 billion dollars and adjusted gross margin was 66.3 percent compared to 1.05 billion dollars and 65.1 percent in the prior year.

Net income for the quarter was 225 million dollars or 1.72 dollars per diluted share, compared to 322 million dollars or 2.11 dollars per diluted share, in the prior year. Adjusted net income was 240 million dollars or 1.84 dollars per diluted share, compared to 339 million dollars or 2.22 dollars per diluted share, in the prior year.

Commenting on the company’s performance, John D. Idol, chairman and chief executive officer of Capri Holdings, said: "Overall, our performance in the third quarter was more challenging than anticipated. However, many aspects of our business performed well, in particular we were pleased with the continued growth in our own retail channel across all three of our luxury houses. However, we were disappointed with the performance of our global wholesale business in the quarter which resulted in expense deleverage and a lower operating margin."

Highlights of Capri Holdings’ results across brands

Versace revenue of 249 million dollars decreased 0.8 percent compared to the prior year. On a constant currency basis, total revenue increased 11.2 percent, while operating income was 24 million dollars and operating margin was 9.6 percent compared to 32 million dollars and 12.7 percent in the prior year.

Jimmy Choo revenue of 168 million dollars decreased 5.6 percent compared to the prior year, while on a constant currency basis, total revenue increased 3.4 percent. Jimmy Choo operating income was 18 million dollars and operating margin was 10.7 percent compared to 16 million dollars and 9 percent in the prior year.

Michael Kors revenue of 1.095 billion dollars decreased 7.2 percent compared to the prior year and on a constant currency basis, total revenue decreased 3.6 percent. Michael Kors operating income was 251 million dollars and operating margin was 22.9 percent compared to 335 million dollars and 28.4 percent in the prior year.

Capri Holdings reveals forecasts for FY23 and FY24

For Capri Holdings, the company expects total revenue of approximately 5.56 billion dollars, modest gross margin expansion and diluted earnings per share of approximately 6.10 dollars for fiscal 2023.

For Versace, the company expects total revenue of approximately 1.1 billion dollars and operating margin of approximately 15 percent. For Jimmy Choo, total revenue is expected of approximately 610 million dollars and operating margin of approximately 4 percent. For Michael Kors, the company expects total revenue of approximately 3.83 billion dollars and operating margin of approximately 22 percent.

For the fourth quarter, for Capri Holdings, the company expects total revenue of approximately 1.275 billion dollars, operating margin of approximately 8.5 percent and diluted earnings per share of 90 cents to 95 cents.

For Versace, the company expects total revenue of approximately 280 million dollars and operating margin of approximately 10 percent. For Jimmy Choo, total revenue is expected of approximately 130 million dollars and operating margin of approximately negative 14 percent. For Michael Kors, the company expects total revenue of approximately 865 million dollars and operating margin of approximately 15 percent.

For fiscal 2024, for Capri Holdings, the company expects total revenue of approximately 5.8 billion dollars, modest gross margin expansion, operating margin of approximately 16.5 percent and diluted earnings per share of approximately 6.40 dollars.

For Versace, the company expects total revenue of approximately 1.25 billion dollars and operating margin in the mid-teens range, for Jimmy Choo, total revenue of approximately 650 million dollars and operating margin in the high-single-digit range and for Michael Kors, the company expects total revenue of approximately 3.9 billion dollars and operating margin in the low-20 percent range.