Capri Sees Sales Declines, Net Losses in Fourth Quarter
Capri Holdings pushed past Wall Street’s fiscal fourth-quarter estimates, but still showed the marks of a difficult stretch for the company.
Impairment charges of $118 million pushed the company to fourth-quarter net losses of $34 million, or 28 cents a diluted share. This compared with earnings of $81 million, or 54 cents, a year earlier.
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Adjusted earnings per share slipped to 97 cents from $1.02 a year earlier, but came in 3 cents ahead of the 94 cents analyst expected, according to FactSet.
Revenues for the three months ended April 1 fell 10.5 percent to $1.34 billion for a 3 percent decrease on a constant currency basis. Despite the decline, net revenues came in $57 million ahead of the $1.28 billion analysts expected.
On a constant currency basis, Michael Kors’ revenues fell 2.2 percent to $910 million, while Versace declined 8.6 percent to $274 million in the quarter and Jimmy Choo gained 5.6 percent to $151 million.
John Idol, chairman and chief executive officer, warned late last year that shoppers were becoming more cautious — a trend that is now clearly impacting the broader luxury world.
Still, he pointed to continued signs of progress at the company’s brands.
“We achieved several milestones in fiscal 2023, including record revenue at Versace and Jimmy Choo as well as mid-single-digit revenue growth at Michael Kors,” Idol said. “Additionally, we generated strong free cash flow and returned $1.35 billion to shareholders. These results demonstrate the power of our business model, the strength of our luxury houses and the execution of our strategic initiatives.”
For the full year, Capri’s net revenues slipped 0.6 percent to $5.6 billion, a high-single-digit increase in constant currencies. For fiscal 2024, the company said net revenues would notch up to $5.7 billion.
“Beyond fiscal 2024, we remain confident in our ability to achieve our long-term goals over time due to the resilience of the luxury industry, the strength of our three powerful iconic brands and the talented group of employees executing our strategic initiatives,” Idol said.
Wall Street appeared to be on board for now and sent shares of the company up 3.6 percent to $41.01 in premarket trading.
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