China hurts Capri Holdings. The stock value plummeted, but Versace is the most resilient brand. The group cut forecasts for the year due to Covid in China, as the pandemic caused the demand for its products to get lower. Capri Holdings now expects to close the fiscal year in March 2023 with a revenue of 5.56 billion USD, down from the previously forecasted 5.7 billion. That being said, Versace continues to outperform Jimmy Choo and Michael Kors.
China hurts Capri Holdings
“Our overall performance during the third quarter was more challenging than expected”, commented John D. Idol, CEO of Capri Holdings, adding that he is satisfied with retail sales but disappointed with the performance of the wholesale channel. 3rd quarter revenue (October-December 2022) of the fiscal year 2023 was down 6% to 1.51 billion USD. Analysts estimated it as 1.53 billion (source Refinitiv IBES / Reuters). Net profits were 225 million, down from the 322 million of the previous year. This result caused Capri Holding’s stock to lose value as soon as it was published. During the first 9 months, sales reached 4.284 billion compared to the 4.162 of the previous period (+3%). Idol remains sure that the future is bright, both for the resilience shown by the luxury industry and for the strength of the group’s brands.
Versace is resilient
Versace’s revenue during the third quarter reached 249 million USD, down 0.8% on the previous year. But at constant rates, total revenue grew by 11.2%. Operating profits are also down from 32 to 24 million USD. In the first 9 months, overall revenue increased to 832 million against the 773 million of the previous year (7.6%). Capri holdings expects Versace to reach a revenue of 1.1 billion for the current year and of 1.25 billion for the following one.
Jimmy Choo and Michael Kors.
From October to December, Jimmy Choo’s sales decreased 5.6% (but operating profits increased), while Michael Kors’ sales were down 7.2%, with operating profits down from 335 to 251 million USD.