Capri Q3 revenues up but warns of 100 million dollar hit from coronavirus

Michael Kors owner Capri Holdings has warned that the coronavirus outbreak in China, which has already prompted the closure of 150 of its 220 stores in the region, could result in a 100 million dollar hit to its revenue.

The company, which owns brands Michael Kors, Versace, and Jimmy Choo, made the announcement while releasing its results for the third quarter ending 28 December. Total revenue at the company grew 9.2 percent year-on-year to 1.57 billion US dollars in that period, while its net income was 210 million US dollars, or 1.38 US dollars per diluted share, compared to 200 million US dollars, or 1.33 US dollars per diluted share in the prior year.

Breaking it down by brand, revenue at Michael Kors decreased 5.1 percent in the period to 1.211 billion US dollars. Versace, which the group acquired at the end of 2018, reported revenue of 195 million dollars, with comparable store sales increasing in the mid-single digits on a constant currency basis compared to stand-alone results from the prior year. At Jimmy Choo, revenue increased 1.9 percent to 165 million US dollars.

Luxury brands feel impact of coronavirus outbreak

John D. Idol, the company’s chairman and CEO, said in a statement: “For the third quarter, we were pleased to deliver revenue and earnings per share above our expectations. Our revenue increase reflected the addition of Versace and growth from Jimmy Choo, while Michael Kors revenue was better than anticipated.

“The strategic initiatives for our recent acquisitions, Versace and Jimmy Choo, continue to gain traction, and we believe we are on the right path to position Michael Kors for future growth. Longer-term, as we continue to execute against our strategies, we are confident in our ability to deliver multiple years of revenue and earnings growth.

“We are in the midst of a dynamic global health emergency related to the coronavirus. Our thoughts and prayers go out to the people of China, including our own employees located in this region, as well as all of those affected by the virus globally. We hope for a speedy and positive resolution to this crisis. The situation in China and the measures being taken to protect the population are having a material impact on our business.”

The company now expects total revenue of approximately 1.3 billion US dollars for the fourth quarter and 5.65 billion US dollars for the full fiscal year.

Photo credit: Michael Kors, Facebook