Capri Holdings’s revenues matched expectations in the last fiscal quarter. But margins are decreasing. In particular, the Hong Kong crisis and “consumers’ reaction in China to an incorrectly labeled product” weigh in heavily when talking about Versace.
Capri’s quarter
In the quarter ended September 28th last year, Capri Holdings recorded total revenues of 1.444 billion dollars: +15.1% at current exchange rates, +16.1% at constant exchange rates. Values in line with FactSet’s expectations. Operating margin was 75 million dollars (-60.5%). Net profit (unadjusted) fell by 47%, while the adjusted one by 7.8%. In the first half of the fiscal year, Capri Holdings grossed 2.788 billion dollars: +13.5% at current exchange rates.
Versace’s quarter
Versace has a turnover of 228 million dollars, with comparable sales stable at constant exchange rates. “Versace – says the statement released a few days ago – continued to record comparable double-digit sales growth in the Americas and EMEA area”. But it has recorded falls in Asia, linked to the situation in Hong Kong and the reaction of consumers in China to a product labeled incorrectly. Versace operating income was 9 million. For the third quarter (October-December 2019), the group expects comparable flat sales.
Jimmy Choo’s quarter
Jimmy Choo’s revenues reached 125 million dollars: +7.8% at current exchange rates, +9.5% at constant exchange rates. Sales of comparable stores fell “less than 5%”. Jimmy Choo’s operating loss was 10 million dollars. As for Versace, forecasts for the next quarter are for approximately flat similar sales.
Michael Kors’ quarter
Michael Kors’ revenues were 1.089 billion dollars: -4.2% at current exchange rates, -3.3% at constant exchange rates. Sales of comparable stores, however, have increased “to low single figures”, writes the US holding company.
Idol’s comment
“We were pleased to offer double-digit revenue growth – commented John D. Idol, president and CEO of Capri Holdings -, led by the addition of Versace and Jimmy Choo’s growth. Michael Kors ‘ revenues of were in line with our expectations. The brand returned to positive comparable store sales during the quarter”.
Annual forecasts
For the year 2020, Capri Holdings confirms forecasts. Revenue of approximately 5.8 billion dollars, adjusted earnings per share of approximately $4.95. “The integration of Versace is proceeding smoothly, and Jimmy Choo continues to pursue its strategic initiatives. Furthermore, the efforts to reposition Michael Kors had had positive responses from customers”, concluded Idol, who confirmed the future objective of reaching 8 billion dollars in annual sales.
Image from capriholdings.com
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