Sharp drop in net income for Capri Holdings

Worldwide
Published:  08 November, 2019

The fashion holding Group has posted a 47% drop in net income for the second quarter of its fiscal 2020 ended September 28, 2019, compared with the same period in the previous year.

Total revenue for Capri Holdings totalled US$1.442 billion (+15.1%) in the second quarter of its fiscal year 2020. Gross profit was US$874 million in the period and gross margin was 60.6%, compared with US$763 million and 60.9% in the prior year. Second-quarter income from operations was US$75 million and operating margin was 5.2% compared with US$190 million and 15.2% in the prior year. Group net income totalled US$73 million, or US$0.47 per diluted share, down from US$138 million, or US$0.91 per diluted share in the prior year.

Versace’s revenue was US$228 million in the quarter, with comparable store sales remaining flat on a constant currency basis compared to stand-alone results from the prior year. The label is said to have continued to deliver double digit comparable sales growth in the Americas and EMEA, but experienced declines in Asia, primarily attributed to the protests in Hong Kong and consumer reaction in China to an incorrectly labelled product. Jimmy Choo’s revenue totalled US$125 million, up 7.8% year-on-year, while Michael Kors revenue declined 4.2% to US$1.089 billion.

John D. Idol, Chairman and CEO, Capri Holdings, said that for full year fiscal 2020, the Group remains focussed on executing on its strategic growth initiatives and reiterates its guidance for revenue of approximately US$5.8 billion and adjusted earnings per share of approximately US$4.95. “From a longer-term perspective, we are encouraged with the progress we are making developing our global fashion luxury group. The integration of Versace is going smoothly, and Jimmy Choo continues to advance its strategic initiatives. Additionally, the Michael Kors brand repositioning efforts are resonating with customers”, said Idol. “With continued focus on execution and investment to support our growth plans, we are confident that Capri Holdings remains on track to grow revenue to US$8 billion dollars over time and deliver multiple years of earnings growth."

Versace Virtus in soft nappa leather