Capri Holdings Limited Experiences Business Growth in 2020

February 05, 2020, LONDON – John D. Idol, the Company’s Chairman and Chief Executive Officer, said, “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.”

Mr. Idol continued, “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. Given our current visibility, we now anticipate annual revenue of approximately $5.65 billion and adjusted earnings per share of $4.45 to $4.50. This estimate could materially change if the severity of the situation in China worsens.”

Third Quarter Fiscal 2020 Results

Financial Results and non-GAAP Reconciliation

The Company’s results are reported in this press release in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and on an adjusted, non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information is provided at the end of this press release.

Overview of Capri Holdings Third Quarter Fiscal 2020 Results:

• Total revenue of $1.571 billion increased 9.2% compared to last year. On a constant currency basis, total revenue increased 9.6%.
• Gross profit was $932 million and gross margin was 59.3%, compared to $873 million and 60.7% in the prior year. Adjusted gross profit was $934 million and adjusted gross margin was 59.5%, compared to $874 million and 60.8% in the prior year.
• Income from operations was $205 million and operating margin was 13.0% compared to $290 million and 20.2% in the prior year. Adjusted income from operations was $264 million and operating margin was 16.8%, compared to $316 million and 22.0% in the prior year.
• Net income was $210 million, or $1.38 per diluted share compared to $200 million, or $1.33 per diluted share in the prior year. Adjusted net income was $253 million, or $1.66 per diluted share, compared to $265 million or $1.76 per diluted share in the prior year.
• Net inventory at December 28, 2019 was $960 million, a 25% increase compared to the prior year, primarily reflecting incremental Versace inventory. Michael Kors inventory declined 2% compared to the prior year.

Versace Third Quarter Fiscal 2020 Results:

• Versace revenue was $195 million and comparable store sales increased in the mid single digits on a constant currency basis compared to stand-alone results from the prior year. Versace continued to deliver double digit comparable store sales growth in the Americas and EMEA.
• Versace operating loss was $12 million and operating margin was (6.2)%. Adjusted operating loss was $10 million and adjusted operating margin was (5.1)%.

Jimmy Choo Third Quarter Fiscal 2020 Results:

• Jimmy Choo revenue of $165 million increased 1.9% compared to the prior year on both a reported and constant currency basis. On a constant currency basis, comparable store sales were flat. Comparable store sales increased in the Americas and EMEA.
• Jimmy Choo operating income was $9 million and operating margin was 5.5%, compared to operating income of $15 million and operating margin of 9.3% in the prior year. In the prior year, adjusted operating income was $16 million and adjusted operating margin was 9.9%.

Michael Kors Third Quarter Fiscal 2020 Results:

• Michael Kors revenue of $1.211 billion decreased 5.1% compared to the prior year. On a constant currency basis, total revenue decreased 4.7%. On a constant currency basis, comparable store sales decreased in the low single digits.
• Michael Kors operating income was $288 million and operating margin was 23.8%, compared to $320 million and 25.1% in the prior year.

Share Repurchase Program

During the third quarter, the Company repurchased approximately 2.7 million of the Company’s ordinary shares for approximately $100 million in open market transactions. As of December 28, 2019 the remaining availability under the Company’s share repurchase program was $400 million.

Capri Holdings Limited has adopted numerous trends during 2019 to expand its business. You can also consider offering customization with fashion design software for your products as more and more people are looking to customize products according to their choice. 

Source: Business Newswire